Despite widespread recovery tactics, where you live in America has a great deal of impact on what economic challenges you face. No country is immune from economic slumps, but higher than average state autonomy in America means economic growth varies by state. While one might expect to see California and New York on the list of most expensive states in America, shifting economic landscapes make several unexpected states more expensive as well. Complicated economic factors, as well as public officials struggling to meet the challenges of the future, makes these ten states the most expensive and most affordable in America.
Most Expensive States
1. Washington DC
Topping the list of expensive states in America is Washington DC. Unsurprisingly, the primary source of jobs in the area is the federal government and related services. Unfortunately, the region only created 6 000 jobs in the past year, which normally sees about 35 000 new jobs annually. Additionally, unemployment rose in the past year, growing to 6.2%. Though Washington DC is often described as recession proof, the region remains one of the poorest performing areas in the country since the 2008 financial crash. Moreover, Washington DC is one of the least equal urban areas in the developed world, with the top five percent earning an average of nearly $500 000 and the bottom ten percent earning only $10 000 annually. Finally, the region replaced a considerable number of medium and high wage positions with low wage ones, which not only pay less, but tend to be part time and include no benefits.
2. Hawaii
Hawaii has long been a state that relies on tourism to drive its economy. Another of the more expensive states in America, Hawaii has experienced slow recovery from recent financial troubles. The average state sees the private sector drive about 12% of the economy, but in Hawaii that figure is around 21%. This means anytime consumers stop spending (like in the financial crisis of 2008), Hawaii’s economy takes a bigger hit. Recently, Hawaii has diversified their economy, working to produce more agricultural products and widen the film and TV industry. A region with incredible natural beauty, Hawaii has always been plagued by high housing and living costs.
3. New York
While New York was among the first states to ease the unemployment rate after the 2008 financial collapse, it still remains one of the most expensive states in America. New York’s biggest challenge appears to be uneven growth across the state. Areas of New York that have been backed by state government enrichment projects show positive growth, but other areas seem to be declining rapidly. Battling aging infrastructure and starkly different growth rates, New York’s unemployment rate is again higher than the national average, sitting at 7.2%. Despite struggles however, some legislators are moving towards interest free options for small businesses, in an attempt to stimulate local growth.
4. New Jersey
Despite nearby states rebounding, New Jersey is also one of the most expensive states in America. New Jersey has a higher unemployment rate now than it did in 2001, and lacks the manufacturing resources that other states have tried to stimulate. Furthermore, other states have jumped on board controversial fracking production, stimulating the economy. New Jersey lacks the natural resources for fracking, even if the people were in agreement to start such a practice. Not only that, New Jersey offers few tax benefits for businesses, often leading businesses to plant down in nearby states instead. Finally, New Jersey also battles aging infrastructure, plus shrinking attendance at gambling facilities in Atlantic City. New Jersey’s waning investment and growth make this economy one of the slowest to recover in the country.
5. California
Not surprisingly, California is also one of the most expensive states in America. High housing costs in this state have long made it one of the pricier states, but population growth is another concern. Despite residents flooding other states, California’s high immigration rate continues to grow the population. While the state holds only 12% of the American population, nearly 30% of all welfare recipients are Californian. California is also the number one state for poverty, reportedly carrying $1.1 billion in debt. Expecting to grow to 45 to 50 million residents in the nest 20 years, California is in dire need of economic stimulation to absorb new residents. To add to these struggles, the state also fights constant droughts, with no real solution sought by public officials. California also recently raised tax rates for businesses, causing some to infer that California’s economic problems may be just beginning.
Least Expensive States
1. Mississippi
One of the less densely populated states, Mississippi is one of the least expensive states to live in. With low per capita income, the state’s housing costs remain correspondingly low as well, making the cost of living affordable. Mississippi previously relied mainly on cotton production to drive the economy. In the last fifteen years however, Mississippi has diversified agricultural and livestock industries, ensuring economic growth. Now focusing on producing rice, soybeans, chicken and catfish, Mississippi continues to pursue diversification to enrich its economy, a strategy which has been successful so far.
2. Arkansas
Like Mississippi, Arkansas is a more rural state, offering consumers low housing costs. Arkansas also boasts incredibly low costs for doing business, attracting six Fortune 500 companies to the state. Arkansas’ low cost of living is balanced by a lower household income than average, but still remains a top state for economic climate.
3. Alabama
Also a state that previously relied on cotton production, Alabama has switched focus to livestock and poultry production with considerable success. Cotton remains a crucial crop, but peanuts, vegetables and greenhouse plants have let the state diversify agricultural interests. Another state with low cost of living, Alabama also holds rich forest and hydroelectric resources, letting the state somewhat insulate itself from economic challenges.
4. Missouri
Missouri is a state that relies heavily on industry to drive the economy. Producing large amounts of transportation equipment, electrical equipment, metals, and machinery, the state is also a leading market for livestock and wheat. This state also holds important metal resources, making mining and chemical refinement contribute to a positive economy as well. Not only that, Missouri boasts over 100 000 farms, ranking second only to Texas in number of farms. Additionally, newer development around several lakes in the state is increasing tourism, making Missouri a strong economic state.
5. South Dakota
South Dakota, much like Arkansas and Mississippi, offers low cost housing for consumers, yet is consistently ranked in the top ten for best states to do business in America. A crucial factor in deciding where new jobs will land, low costs for businesses is the cornerstone of South Dakotas economic success. Slashing business related taxes in 2010 helped this state become more competitive to prospective employers, keeping the economy working for South Dakota citizens.
source:
http://www.lifehack.org/articles/money/the-10-most-and-least-expensive-states-america.html
