PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

STATE SPOTLIGHT: States Losing Population in 2019 Tend to Rank as Unfriendly for Business

By at 2 January, 2020, 2:38 pm

by Raymond J. Keating-

A variety of states, according to the latest release on state population changes from the U.S. Census Bureau, actually lost population in 2019, along with more than half of U.S. states seeing more people flee to other states than coming to their own state (i.e., suffering negative net domestic migration).

And guess what?

These states performing poorly in terms of population changes generally rank as costly and unpleasant places to startup, operate and invest in businesses.

As noted by the Census Bureau:

“The 10 states that lost population were New York (-76,790; -0.4%), Illinois (-51,250; -0.4%), West Virginia (-12,144; -0.7%), Louisiana (-10,896; -0.2%), Connecticut (-6,233; -0.2%), Mississippi (-4,871; -0.2%), Hawaii (-4,721; -0.3%), New Jersey (-3,835; 0.0%), Alaska (-3,594; -0.5%), and Vermont (-369  ; -0.1%).”

For good measure, “Twenty-seven states and the District of Columbia lost population through net domestic migration between 2018 and 2019, six of which had losses over 25,000, and three of which experienced losses greater than 100,000.

The top states with net domestic migration loss were California (-203,414), New York (-180,649), Illinois (-104,986), New Jersey (-48,946), Massachusetts (-30,274) and Louisiana (-26,045).”

Let’s see where these states landed on SBE Council’s “Small Business Policy Index 2019: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth,” which ranks the 50 states according to 62 different policy measures, including assorted tax, regulatory and government spending measures.

As for the worst states in terms of net domestic migration losses in 2019 vs. 2018, all six ranked in the lower half of the 50 states on the Index – with three coming in among the four worst states. Louisiana came in at 29, Massachusetts at 38, New Jersey was dead last at 50, Illinois registered 35th, New York came in at 47, and California was second worst at 49.

As for states losing population in 2019, 8 out of these 10 losers again ranked in the lower half of the Index – and five falling among the worst seven states.

Consider that Vermont registered 45th, New Jersey 50th, Hawaii 48th, Connecticut 44th, Louisiana 29th, West Virginia 31st, Illinois 35th, and New York 47th. The other two states losing population were Alaska (23rd on the Index) and Mississippi (17th).

SBE Council has long tracked changes in population among the states, including net domestic migration, and has found over the years that the states that impose heavy burdens on entrepreneurship, small business and investment – that is, the states that punish economic opportunity for all – are the states that largely suffer from people fleeing to other locales. No one should be surprised by this simple economic reality. After all, the most you tax and regulate something, the less of it you get.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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