The personal finance website WalletHub just released its report on 2022’s Best and Worst State Economies.
The WalletHub methodology incorporates twenty-eight indicators across three broad categories of economic activity, economic health, and innovation potential. The weighted final score is then used to rank each state.
As seen before with metrics such as post-pandemic unemployment recovery, the American southwest is simultaneously composed of some of the best and some of the worst performing states in the country.
| Overall Rank | State | Total Score | Economic Activity | Economic Health | Innovation Potential |
|---|---|---|---|---|---|
| 2 | Utah | 71.33 | 2 | 1 | 10 |
| 3 | California | 70.3 | 1 | 31 | 3 |
| 6 | Colorado | 58.84 | 13 | 6 | 9 |
| 12 | Texas | 54.16 | 8 | 9 | 23 |
| 17 | Arizona | 50.64 | 17 | 19 | 20 |
| 26 | Nevada | 44.77 | 7 | 32 | 44 |
| 40 | New Mexico | 38.07 | 44 | 49 | 14 |
| 47 | Oklahoma | 31.32 | 50 | 38 | 40 |
Utah recently adopted a universal regulatory sandbox, public policy reform championed by the Libertas Institute, enabling innovation by removing unnecessary and bureaucratic regulatory red tape.
Similarly, Arizona passed legislation earlier this year mirroring the essence of Utah’s sandbox framework. House Bill 2731 saw overwhelming support, and was signed by Governor Doug Ducey on April 25th.
Conversely, states like New Mexico are artificially propping up industries like film and space with generous subsidies, removing the power of the free-market to pick its own winners and losers.
Last summer, New Mexico’s Spaceport America tenant Virgin Galactic made headlines when Sir Richard Branson finally made it to “orbit”. However, ongoing financial concerns cast doubt on whether Branson will ever be able to make the company commercially viable.
As Utah and Arizona take advantage of their new universal regulatory sandboxes, it will be telling if these states soar ahead in the coming years, leaving big government states like New Mexico in the proverbial dust.