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The 10 States With the Best Economies in America

Not all states have experienced the same kind of economic pain since the Great Recession began.
 
 
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The best local economy in the United States, by far, is the DC metropolitan area. Average incomes in the region top $150,000, more than triple the national average. The reason for Washington's affluence (or parts of Washington's affluence – the Capitol also has abundant poverty) is clear: while the rest of the economy is facing a crisis in demand as a result of high unemployment and stagnant wages in the private sector, the Capitol, in classic Keynesian style, is making up for it with plenty of public spending, which has skyrocketed since 9/11 – defense and homeland security contractors, and other firms providing goods and services to the government are flush.

It's the same model that got us out of the Great Depression, but in this age of austerity, Washington isn't spreading enough public dollars around to help those of us living in the 50 states. Even so, not all states have seen the same kind of economic pain since the Great Recession began. Here are 10 that are doing pretty well, with relatively low unemployment, fewer homes in foreclosure, decent wages and a large share of their populations enjoying health insurance. It's not a comprehensive analysis of the thousands of economic metrics one might examine, but it does provide a handy snapshot of some of the states that are weathering the storm fairly well.

1. North Dakota

North Dakota's economy is led by agriculture – it provides much of the sugar beets, seed oils and grains that the United States produces. That brings in about $1 billion in federal ag subsidies each year. It also has energy – it's the second largest producer of lignite coal in the country, and also has about 3.6 billion barrels of recoverable oil – according to the most conservative estimates.

North Dakota also has its own bank – the only state-owned bank in the country. It helped the state avoid getting burned by shady mortgage-backed securities as many others were, and it invests long-term in North Dakota's growth.

    July unemployment rate: 3.3 percent (Nationwide: 9.1 percent)

    Per capita income (2010): $46,468 (Nationwide: $42,449)

    Jobs added in past year: 19,000

    Poverty rate (2008): 7.9 percent (Nationwide: 9.7 percent)

    Foreclosure rate (3rd quarter 2010): 0.95 percent (Nationwide: 4.29 percent)

    Share of the population uninsured (2008-2009): 11 percent (Nationwide: 17 percent)

    State budget gap (2010): Nada

2. Nebraska

Best known for its agricultural sector, Nebraska has a pretty diverse economy, with manufacturing, telecommunications and insurance all contributing to its relatively good outlook. It has the second lowest unemployment rate in the country, and is a cheap place to live.

    July unemployment rate: 4.1 percent

    Per capita income (2010): $43,625

    Jobs added in past year: 13,400

    Poverty rate (2008): 6.8 percent

    Foreclosure rate (3rd quarter 2010): 1.61 percent

    Share of the population uninsured (2008-2009): 12 percent

    State budget gap (2010): $305 million

3. Alaska

Obviously, energy dominates the Alaskan economy, with seafood exports coming in second followed by tourism. The government is a major employer in the state, and military bases are an important part of the economies of Anchorage and Fairbanks. Alaska, home of rugged individualists who hate government, also receives massive amounts of federal subsidies. It has a lot of people without health insurance, and an unemployment rate that, while well below the national average is also the highest on this list, but incomes are high and it's in pretty good shape otherwise.

    July unemployment rate: 7.7 percent

    Per capita income (2010): $63,424

    Poverty rate (2008): 5.7 percent

    Foreclosure rate (3rd quarter 2010): 1.12 percent

    Share of the population uninsured (2008-2009): 19 percent

    State budget gap (2010): $1.3 billion

4. Iowa

Most people who don't live there probably think of Iowa as an agricultural state, with miles and miles of corn and soybeans lining razor-straight highways. But that's totally untrue. Agriculture and forestry make up less than 4 percent of Iowa's economic output. Manufacturing represents 22 percent – almost double the national share. Ten percent of its economy is driven by government services, and it has a lot of health-care and financial services. Iowans have slightly lower incomes than the rest of the country, but the cost of living is among the least expensive in the nation.

    July unemployment rate: 7.3 percent

    Per capita income (2010): $41,908

    Jobs added in past year: 18,300

    Poverty rate (2008): 5.7 percent

    Foreclosure rate (3rd quarter 2010): 2.74 percent

    Share of the population uninsured (2008-2009): 10 percent

    State budget gap (2010): $1.3 billion

5. South Dakota

While agriculture remains an important part of the state's economic mix (it's the sixth largest producer of ethanol), the service sector – insurance, health care, finance -- dominates South Dakota's economy. Government spending accounts for about 10 percent of its economic output – Ellsworth Airforce Base is the second largest employer in the state – and tourism also contributes to South Dakota's relatively decent economy. (Everyone goes to Mount Rushmore, but for my money the Black Hills are a must-see attraction.)

    July unemployment rate: 4.7 percent

    Per capita income (2010): $44,550

    Poverty rate (2008): 8.2 percent

    Foreclosure rate (3rd quarter 2010): 1.52 percent

    Share of the population uninsured (2008-2009): 13 percent

    State budget gap (2010): $48 million

6. Wyoming

Wyoming used to be cattle country – agriculture traditionally drove the state's economy – but that has changed. Mining and tourism now dominate the state's economy. The two sectors make up about a third of the Equality State's economic output. And Wyoming, with Yellowstone and the Grand Tetons, stands out from the rest of the U.S., as 50 percent of its land-mass is owned by the federal government.

    July unemployment rate: 5.8 percent

    Per capita income (2010): $61,049

    Jobs added in past year: 6,300

    Poverty rate (2008): 5.7 percent

    Foreclosure rate (3rd quarter 2010): 1.45 percent

    Share of the population uninsured (2008-2009): 10 percent

    State budget gap (2010): $32 million

7. Virginia

As we've noted, DC is booming in large part because of government contracting, and a big part of the DC metropolitan area lies in Virginia – it's the leading state for defense contract dollars per capita, which provide the state with about 900,000 jobs. It's second only to California in the number of defense department employees in the state. Virginia also has the highest concentration of technology workers in the U.S. Agriculture, while less prominent than in years past, still plays a major role in the state's economy.

    July unemployment rate: 6.1 percent

    Per capita income (2010): $47,570

    Poverty rate (2008): 7.3 percent

    Foreclosure rate (3rd quarter 2010): 1.8 percent

    Share of the population uninsured (2008-2009): 13 percent

    State budget gap (2010): $3.6 billion

8. New Hampshire

New Hampshire has a diverse economy that rests heavily on manufacturing and tourism, the leading sector. It has the highest rate of foreclosures of the states listed here and per capita incomes just a hair beneath the national average, but otherwise enjoys relatively low unemployment, little poverty and relatively few uninsured citizens.

July unemployment rate: 5.2 percent

    Per capita income (2010): $41,464

    Jobs added in past year: 9,600

    Poverty rate (2008): 5.0 percent

    Foreclosure rate (3rd quarter 2010): 2.45 percent

    Share of the population uninsured (2008-2009): 10 percent

    State budget gap (2010): $32 million

9. Oklahoma

People think oil fields, but it's the natural gas that provides a huge part of Oklahoma's relative prosperity – it's the second largest producer in the nation. It also makes airplanes and electronics and is the fifth largest wheat producer in the country. It has the highest levels of poverty and lowest per capita incomes of the states featured here, but the cost of living is cheap and it's doing quite well in terms of the other metrics. Oklahoma's gross state product has grown rapidly since 2000.

    July unemployment rate: 5.5 percent

    Per capita income (2010): $35,578

    Jobs added in past year: 34,000

    Poverty rate (2008): 11.8 percent

    Foreclosure rate (3rd quarter 2010): 2.86 percent

    Share of the population uninsured (2008-2009): 16 percent

    State budget gap (2010): $1.6 billion

10. Hawaii

Hawaii's economy has been hit hard in the recession, but we're talking about states that have decent economies relative to the nation as a whole, and Hawaii still enjoys lower rates of poverty and unemployment, and pretty decent incomes.

    July unemployment rate: 6.1 percent

    Per capita income (2010): $43,615

    Jobs added in past year: 9,900

    Poverty rate (2008): 6.0 percent

    Foreclosure rate (3rd quarter 2010): 4.5 percent

    Share of the population uninsured (2008-2009): 8 percent

    State budget gap (2010): $1.2 billion

 
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