The Best States to Find a Job

Is your state a good place to work? This study explores the data to determine which states have strong economies for job seekers

Best State to Find Employment

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The unemployment rate is now at its lowest level since the 2008 Recession. Still, your chances of finding a job or developing a career can vary according to your location. In the same way, that the country's economy ebbs and flows, a state's economic standing can fluctuate. Cost of living, unemployment rates, and average salaries at state and even municipal levels all factor into the job market equation.

If you are looking for a new job, a place to start a business, or a brand new location to start a career, it may be helpful to look at the states with the highest job growth. It's also important to look at what influences the growth of jobs and what factors can help or hurt your state's employment rates.

Key Findings

If you are looking for a job, there are a number of factors that you can take into account to bolster your chances to find gainful employment. In this guide we'll look at a number of factors that contribute to a state's job availability and quality. We looked at the states with the lowest and highest unemployment rates, average salaries by state, and the cost of living in each state. Here are some of our most significant findings:

  • There are a variety of factors that affect unemployment, including corporate behavior, technological advances, and seasonal influences.
  • The population of a state correlates with unemployment rates in some cases but not all.
  • The cost of living and salary averages generally rise and fall together but some states had better than average ratios while others had worse.

In other words, a state's viability as a solid candidate in your hunt for a better job situation is more complex than just an unemployment number.

Employment by State

The average unemployment rate in the U.S. sits at 4.8%, according to the Bureau of Labor Statistics (BLS). The Bureau of Labor Statistics, a branch of the U.S. Department of Labor, collects statistics of the total number of unemployed people by surveying a sample group every month. They also break that information into categories.

The rate is calculated not by evaluating the total number of jobless people in each state, but rather by assessing how many people are out of work and seeking employment. If you are unwilling or unable to actively seek employment, you are not considered in this rate. In addition, those who work but don't receive an income - for example, if you help in your family's business but do not draw a salary - are also omitted for purposes of determining the unemployment rate.

The graph below shows how the top ten states with the highest number of unemployed workers compare to the U.S. average.

Top 10 States with the Highest Unemployment Rates

Conversely, the states with the lowest rates have unemployment numbers that are well under the national average.

Top 10 States with the Lowest Unemployment Rates

When enough workers are unemployed it can lead to a chain reaction that leads to more job loss.

What Contributes to Unemployment Rates?

Unemployment rates are collected as a way to gauge the country's overall economic health. When enough workers are unemployed it can lead to a chain reaction that leads to more job loss. Because unemployment means less buying power, fewer goods are produced which causes more retailers to cut jobs. This is why the failure of one industry affects the whole economy.

Patterns in Unemployment

It makes sense that you'd expect a state with a high population to have a higher unemployment rate right? The more people that are in an area, the more competition there is to find jobs. While there is some correlation between joblessness and population, it may only be one of many variables that contribute to unemployment.

If you look at each state's (plus the District of Columbia) unemployment rate versus the national average and compared that to population their population, 32 of the 51 followed a pattern you might expect. That is, states with higher than average populations had higher than average unemployment rates and states with lower populations had lower rates. However, 19 states didn't follow suit. For instance, Alaska, with only 738,432 residents, has a much lower than average population, yet it has an unemployment rate of 6.7%, which is above the national average. Conversely, states like Pennsylvania has a higher than average population and a lower than average unemployment rate.

There can be multiple causes of non-conforming unemployment rates vs. population, including the kinds of industries to which the state plays host and whether those industries have a higher demand for skilled or unskilled workers. Some states (like Alaska) rely heavily upon seasonal industries to maintain adequate employment levels.

State Unemployment and Population

There are a number of economic factors that have major impacts on the overall health of a state's economy, which can affect your ability to find a job in that state. Here are some factors that can change the unemployment rates in a state:

  • New legislation that requires new regulations or taxes a big industry. Sometimes even positive industry reforms can translate to fewer jobs in that industry. When the government causes a company to pay more, they will make up for that by letting go of employees or closing down branches and locations.
  • Consumer taste can sometimes be unpredictable. If a major industry in a given state starts to lose its consumer base, there may be fewer jobs overall.
  • Technological advances can put workers out of a job. If the advance is groundbreaking enough to affect a whole industry, it can affect unemployment rates.
  • Joblessness begets joblessness. As previously mentioned, when one industry starts to lose employees it can affect other industries as well. If the above factors cause enough people to lose their jobs, there are fewer consumers in your state, which can affect retail and manufacturing jobs as well.

Average Income vs. Cost of Living

Whether or not you can find a job isn't the only factor to take into account while deciding which state is the best for your job search. It's also important to consider which states offer the best job opportunities and how those careers will allow you to grow within the context of that state. In which states are you most likely to get paid more? Which states have a high cost of living?

Highest Average Income

Wealth in the U.S varies widely from state to state and city to city. The economic health of the state has a significant impact on the salaries that its citizens are paid. Although incomes vary widely based on industry averages, the area in which you live plays a role. For one thing, the country, your state, and possibly even your city have their own minimum wage laws. Though many states follow the federal standard of $7.25 per hour, some states have minimums in the $8, $9, and even $10 range. Washington D.C. tops the list at $11.50. D.C. also makes the top five states with the highest average income.

It's also important to note that high average incomes may be more an indication that the state attracts high incomes than a sign that the state has a healthy economy. For instance, Hawaii is number three on the list of highest incomes but it also has the highest cost of living. In fact, each of the top five states with the highest average incomes have a higher than average cost of living.

How Cost of Living Factors In

Cost of living refers to a number of expenses that contribute to the overall cost to live in an area.

A state's COLI is important to consider; even if there are jobs available at a decent wage, the cost of living may make it difficult to pay the bills.

The Cost of Living Index (or COLI) for a given region takes into account various routine expenses such as:

  • Food
  • Housing
  • Transportation
  • Utilities
  • Clothing and other personal items
  • Education
  • Health care
  • Child care
  • Entertainment.

A state's COLI is important to consider; even if there are jobs available at a decent wage, the cost of living may make it difficult to pay the bills. For instance, Hawaii has lower than average unemployment rates, meaning there are fewer Hawaiians out of work and looking for jobs than the national average. However, they have the highest COLI in the country. Here's how each state's cost of living compares to the 100 average:

Cost of Living Index by State (2015)

In general, each state's average salaries vs. its cost of living would seem to indicate that the COLI and the state's average pay go hand in hand. Similar to inflation, the more people make, the more things cost (or vice versa). However, there are a few states that have lower than average COLIs and higher than average salaries. This means that in states like Illinois, Iowa, Missouri, Texas and others, you are more likely to be paid a salary that more than meets your cost of living requirements.

There are a few states, however, that have negative COLI to income ratios. For instance, Florida has a lower than average salary at $46,140 and a slightly higher than average COLI at 100.5. This could mean that making ends meet is harder for Florida residents than for those in other states due to the discrepancy between pay and prices of goods and services.

If you live in a state with a low COLI comparative to wages, you will enjoy a greater amount of disposable income. You may, however, sacrifice some of the things that make more expensive areas exciting, such as abundant entertainment and shopping options.

As you can see, 35 of the 50 states (plus D.C.) were not included in either list, as they follow typical patterns. The average income is higher where it costs more to live and less in states with below-average living costs.

Which States Are the Best and Worst Overall?

To decide which states have the best environments for jobs and careers, we looked at how they measured up in each category combined. The ideal environment for working and looking for work is one where you are paid more, the cost of living is affordable, and jobs are available. By looking at average income, cost of living, and unemployment rates, we can see a general picture of the economic health of the state.

Methodology

In order to get this overview of a state's financial fitness in terms of job outlook, we ranked each state in all three categories and added their ranks together. For instance, Mississippi was ranked the number one state in cost of living but it came in at 51 in both average income and unemployment, giving it a combined score of 103. This total score brought Mississippi down to the number 45 position out of the 51 states and D.C.

If there were two states with the same score, unemployment was the tiebreaker by default. This is because in order to enjoy the income and cost of living averages of the state, you would obviously have to be able to find a job in that state.

Without further ado, here are the top ten states to find a job:

Top 10 Best States to Find a Job

RankStateAverage IncomeCOLIUnemployment
1Utah$63,38392.43.4%
2Nebraska$56,87092.33%
3North Dakota$60,730101.22.8%
4Iowa$57,810923.5%
5New Hampshire$73,397118.22.9%
6Virginia$66,15594.54.1%
7Idaho$53,43888.23.9%
8Minnesota$67,244101.53.7%
9Colorado$60,940101.93.2%
10Kansas$53,44490.94%

Utah - above average in every category - earned the top spot in our analysis with a rank of 15 in cost of living, 7 in unemployment and 10 in average income. We then used the same metrics to determine the ten lowest scoring states. West Virginia came in last with below average numbers in each category.

10 Worst States to Find a Job

RankStatesAverage IncomeCOLIUnemployment
51West Virginia$39,552103.76.3%
50New Mexico$46,686101.16.5%
49Nevada$49,875106.56.2%
48Louisiana$42,40693.45.9%
47New York$54,310135.64.9%
46South Carolina$44,92997.55.5%
45Mississippi$35,52183.56.7%
44Alaska$67,629133.56.6%
43District of Columbia$68,277146.86.5%
42California$60,487134.35.7%

The Best States to Find a Job - Final Considerations

More than seven million people move to a different state each year, according to data from the U.S. Census Bureau. Such a move is a major life change, however it might just make financial sense for you in the long run if you're in an area that doesn't offer sufficient career opportunities or has an excessive COLI.

If you do decide to seek employment in another location, be sure to check out the Best Travel Sites to find the most affordable options for visiting your state of choice. Moving is always a bit intimidating, but it can also be an adventure which turns into a positive and fresh new start. In the big picture, the most important thing is making the best choice for your financial health and job satisfaction.

For more of our in-depth data studies, take a look at the best states to retire in the US.

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