Don't let it get away!
Help yourself with the Fool's FREE and easy new watchlist service today.
The Bureau of Labor Statistics recently released its report regarding October regional and state unemployment data, showing little change from the previous month. There were some significant changes in job numbers from state to state, however, something that occurs even when the national unemployment rate stays fairly constant. Unfortunately, some states, such as Nevada, Rhode Island, and Michigan, still have unemployment rates of 9% or higher, while other states tend to report unemployment figures well below the national average of 7.3%.
Three states in particular have shown real job-creating gusto, with each having consistently chipped away at its own unemployment rate over the past year until each now reports an unemployment rate of less than 5%.
How did they do it? Here are the profiles of each of these high-employment states, showing how each has leveraged its strengths in order to lift its populace out of the doldrums of the Great Recession.
The state of Hawaii has decreased its unemployment rate by a full percentage point in only one year -- from 5.4% in October 2012 to the current 4.4%. According to BLS, Hawaii's dominant employers consist of the government; trade, transportation and utilities; and the leisure and hospitality industry. The latter, not surprisingly, gets a huge lift from the state's tourism industry -- as well as by the high numbers of extremely wealthy people that call Hawaii home.
The state has not shied away from using its power of taxation to fill its coffers. Earlier this year, legislators decided to make permanent its temporary hotel room tax, the Transient Accommodation Tax, which was raised in 2007 from 7.25% to 9.25%. The TAT is imposed over and above the state's 4% General Excise Tax, levied on all transactions in Hawaii.
Hawaii also has a high number of millionaires in residence, and the state raised tax rates on its wealthiest residents a few years ago in order to raise more revenue.
This state's Department of Workforce Services recently noted that in addition to the state's low unemployment rate of 4.6%, Utah saw its nonfarm employment increase by 2.2% from October 2012. Just as importantly, the state has a labor force participation rate of 78% -- an amazing achievement, considering that the national rate is a paltry 62.8%, and declining. All 11 of the state's private sector industries showed an increase in available jobs compared to one year ago, with trade, transportation, and utilities leading the way.
A business-friendly climate has helped Utah thrive since the recession. Early this year, the state was honored as Forbes' Best State for Business for the third year in a row. The site praised Utah for its low corporate tax rate, young workforce, and predisposition to jettison pesky laws and regulations that businesses find onerous.
Minnesota's unemployment rate, at 4.8%, is the lowest it has been in six years -- thanks to growth in its manufacturing and health care industries. Over the past year, the state's economy has added more than 50,000 jobs, and a resurgence in factory hiring will likely push that number higher. Though the state's labor force participation rate has dropped to 70.1% from its 2007 level of 72.1%, the rate is still far above the national average.
Minnesota is also home to scores of publicly held companies -- like UnitedHealth Group, Target, and 3M Company -- which adds to the state's economic diversity.
Of course, not all states have the tourism potential of Hawaii, economic diversity of Minnesota, or the desire to court business interests to the extent that Utah does. But each state has its own particular strengths and resources to develop, and for those looking for a roadmap to do so, the success stories of these three states should provide plenty of direction.
Want to retire rich?
It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report, "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.