Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.” Read more opinion LISTEN TO ARTICLE 6:01 SHARE THIS ARTICLE Share Tweet Post Email

Photographer: Justin Sullivan/Getty Images Photographer: Justin Sullivan/Getty Images

The geography of U.S. economic activity has gotten a lot of attention over the past few years, with journalists, think tanks and others getting increasingly creative in sorting out the differing trajectories of Republican-leaning areas versus Democratic-leaning areas, more-populous cities/metropolitan areas/counties versus less-populous ones, and rural versus urban.

There’s something to be said, though, for just looking at how state economies compare. While the growing economic and political disparities between nearby areas (the San Francisco Bay Area and the San Joaquin Valley in California, for example) are interesting and important, regional economic trends still matter — and it can be easier to see them by focusing on the state level.

So I looked at state economic performance in the 2010s by the change in four metrics: nonfarm payroll employment, employment-population ratio, per-capita personal income and poverty rate. Payroll employment, perhaps the most widely used yardstick of relative state performance, is measured here from December 2009 through October of this year.

Job Growth in the 2010s Utah led the way, and neighboring Wyoming came in dead last Source: U.S. Bureau of Labor Statistics

There’s a cluster of high-job-growth states in the West, and another, smaller one in the Southeast. Texas is, of course, big enough to be its own cluster. Meanwhile, the three states with the slowest job growth all have economies reliant on fossil-fuel extraction (oil in Alaska, coal in Wyoming and West Virginia) that haven’t really partaken in the shale oil and gas boom enabled over the past decade by fracking and horizontal drilling (although West Virginia has been starting to lately).

Employment growth tells a lot about the condition of a state’s job market, but it doesn’t tell everything, which is why the Bureau of Labor Statistics also measures the unemployment rate and the employment-population ratio. I generally prefer the latter because it counts people who’ve given up looking for jobs while the unemployment rate does not. The employment-population ratio is, however, affected by the age profile of a state’s population (it covers all civilians 16 and older, so retirees drive it down) and comes with substantial measurement error at the state level. So it’s not as reliable a gauge as state payroll data. It does have the nice property of accentuating comebacks — such as in several manufacturing-reliant states in the Midwest and South that had a dreadful 2000s and a much better 2010s.

Employment Rates in the 2010s Massachusetts and Michigan saw the biggest improvement Source: U.S. Bureau of Labor Statistics

Once again, Alaska and Wyoming brought up the rear. It was clearly not a great decade in either state.

Now let’s shift to incomes, as measured by the Bureau of Economic Analysis, the gross domestic product people. Per-capita personal income rose faster in California from 2009 to the second quarter of this year than anywhere else, with several other Western states also seeing big gains, and New York registering the biggest percentage increase outside the West.

Income Growth in the 2010s California led the way, and Mississippi came in last Source: U.S. Bureau of Economic Analysis

This doesn’t say anything about how the income is distributed, or what the cost of living is in each state. In California, those rising incomes have been accompanied by skyrocketing housing costs and a host of social ills. To get at least a partial handle on those issues I looked at poverty rates — the percentage of population below the poverty line determined by the Census Bureau — and how much they had changed from 2009 to 2018, the most recent year for which data are available.

Poverty Rates in the 2010s Colorado saw the biggest decline, and Alaska the biggest gains Source: U.S. Census Bureau

Mississippi saw a 2.2 percentage-point decline from 2009 to 2018, but it still had the highest poverty rate in the country at 19.7%. Among the other darker-blue squares in the above map, Arizona, the District of Columbia, Georgia, Michigan, North Carolina, South Carolina and Texas all still had poverty rates above the national rate of 13.1%, leaving just a few states in the Mountain West and Northwest with the happy combination of poverty rates that both fell two percentage points or more and were below the national average.

When I combined the state rankings on the four measures, Utah came out best, with Colorado, Idaho, Michigan, California, Arizona, South Carolina, Tennessee and Washington rounding out the next eight spots and Florida, Oregon and Texas tied for tenth. The Bloomberg Economic Evaluation of States economic health index, which combines employment growth and economic growth with data on housing markets, tax revenue and the performance of local corporations, shows Michigan making the biggest improvement since 2009 followed by Colorado, Washington, Idaho, Oregon, California, Utah, Nevada, Indiana and Ohio.

After the battering it went through, it’s great to see Michigan topping an economic best-of list, and there definitely are good things going on in other states. But it seems pretty clear that the West, in particular a swath of states fanning out from Colorado to the Pacific Ocean, has been the decade’s economic boom region. What do these states have in common? Tall mountains, for one thing — all have peaks of more than 10,000 feet. Alaska has even taller ones, though, and it had far and away the weakest state economic performance of the 2010s. So that’s probably not it, although beautiful scenery and outdoor activities clearly are among the attractions of Colorado, Utah, Idaho, et al.

Proximity and connection to California’s tech-industry-fueled economy might be a better explanation. As already noted, the state’s strong job growth and income growth have brought high housing costs and other quality-of-life issues. These have led millions of Californians to move to other states, with Texas, Arizona, Nevada, Oregon, Washington, Colorado, Idaho and Utah the top destinations, according to a 2018 California Legislative Analyst’s Office report. And while the migration flows to Texas, Arizona and Nevada have been skewed toward the bottom of the income spectrum, those to Oregon, Washington, Colorado, Idaho and Utah have not. California has been exporting affluence to some of its neighbors.

In the process it has also been exporting higher housing prices, traffic congestion and other not-so-great things. People in the Pacific Northwest have been worrying about “Californication” for decades now, and lately the grumbling about newcomers from Golden State has been spreading eastward. Economic good times don’t always make everybody happy.

— Graphics by Elaine He

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.