The States With the Top Job-Producing Climates Have Two Interesting Things In Common

Michael Hausam
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Posted: Feb 27, 2015 12:01 AM
The States With the Top Job-Producing Climates Have Two Interesting Things In Common

Gallup just completed an evaluation of the job-hiring environment across the country, and ranked all 50 states based upon several different key employment indicators. These included plans for expansion of their workforce, expected changes in business direction, and the potential for staff reductions.

These are the states at the top:

According to the details, the overwhelming contributing factor was energy production. Generally, states that encourage fracking and other oil-exploration techniques did very well. The boom in this industry has not only affected those companies that are directly involved, but it has also trickled down in the remainder of their local marketplaces as well.

Unmentioned in the survey’s evaluation are two other very interesting facts.

Firstly, the top 9 of these states are all very (or even extremely) Republican in their state and federal elective offices. Of these 9, only Iowa is without Republican control of their entire legislative government. All have Republican governors. Given the results of these states' historical and last November's elections, it would be very difficult to not directly connect political ideology and party affiliation with their economic performance. Elections have consequences and these states are enjoying those results.

Here's what the statewide political landscape looks like after last November's election:

Secondly, these top-performing states tend to have very low income tax rates as well. Texas, Washington, and South Dakota all have tax rates of zero. North Dakota has the lowest tax rate in the nation of 3.22% and Michigan has the third lowest. Only Wisconsin and Iowa have rates that exceed the national average. On the whole, the ability to keep more of what one earns tends to have positive effects, especially with regard to motiving income-earning and productivity-increasing behavior.

Here are the income tax rates for country:

By way of contrast, the worst performing state in the nation, Connecticut, has an above-average income tax rate and is dominated by the Democrat party. Furthermore, even though the state has no natural oil or gas deposits, they’ve outlawed fracking-related industry as well. This runs directly counter to those states that are booming.

Of course, party affiliation and tax rates may be mere anecdotal side notes to the successes these top job-potential states are enjoying. But probably not.