Report: Economic Freedom Up Slightly Across U.S.

Share on Facebook
Share on Twitter
Share on
LinkedIn
+

Massachusetts ranks 13th in North American index

BOSTON – Massachusetts ranks 13th out of all 50 states in this year’s Economic Freedom of North America report, released today by the Pioneer Institute in conjunction with Canada’s Fraser Institute.

“Massachusetts has real competitive advantages over other states – a top-rate education system, talent across financial services, consulting and important research and innovation sectors,” said Jim Stergios, executive director of Pioneer Institute. “But state government has also advanced policies that make Massachusetts an expensive place to live and work. We have a well-earned reputation for over-regulation and huge debt obligations that are a drag on the economy.  Several issues on the ballot in 2018, including additional tax increases and restrictions on labor freedoms, would only erode Massachusetts’ standing further.”

For the third year in a row, New Hampshire has the highest level of economic freedom among all U.S. states. It scored 8.3 out of 10 in this year’s report, which measures government spending, taxation and labor market restrictions using data from 2015, the most recent year of available comparable data.

“The freest economies operate with comparatively less government interference, relying more on personal choice and markets to decide what’s produced, how it’s produced and how much is produced. As government imposes restrictions on these choices, there’s less economic freedom and less opportunity for prosperity,” said Fred McMahon, the Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute and report co-author.

After New Hampshire, the freest states are Florida and Texas (tied for 2nd), South Dakota (4th) and Tennessee (5th). For the third year in a row, New York was ranked least free (50th), followed by California (49th), New Mexico and West Virginia (tied for 47th), and Hawaii and Mississippi (tied for 45th).

The report includes an additional all-government ranking, which adds federal government policy to the index and includes the 50 U.S. states, 32 Mexican states, and 10 Canadian provinces.

Since 2004, the average score for U.S. states in the all-government index has fallen from 8.20 to 7.78 out of 10 in 2015, driven largely by changes at the federal level.

In the most-free states, the average per capita income in 2015 was seven percent above the national average compared to roughly five percent below the national average in the least-free states.

“The link between economic freedom and prosperity is clear—people who live in states that support comparatively low taxation, limited government, and flexible labor markets have higher living standards and greater economic opportunity,” said Dean Stansel, economics professor at Southern Methodist University and co-author of the report.

The Economic Freedom of North America report, also co-authored by José Torra, the head of research at the Mexico City-based Caminos de la Libertad, is an offshoot of the Fraser Institute’s Economic Freedom of the World index, the result of over a quarter-century of work by more than 60 scholars, including three Nobel laureates.

See the full report at fraserinstitute.org and fraserinstitute.org/economic-freedom.

About the Economic Freedom Index

Economic Freedom of North America (EFNA) measures the degree to which the policies and institutions of states/provinces support economic freedom. This year’s publication ranks 92 provincial/state governments in Canada, the United States and Mexico. The report also updates data in earlier reports in instances where data has been revised.

For more information on the EFNA Network, datasets and previous Economic Freedom of North America reports, visit www.fraserinstitute.org/economic-freedom. And you can ‘Like’ the Economic Freedom Network on Facebook at facebook.com/EconomicFreedomNetwork.

###

Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government.

Related Research

Pioneer Report Underscores Wide Disparities in Economic Performance between Industry Sectors in Massachusetts

Service-based industries have significantly outperformed manufacturing and other traditional blue-collar economic sectors in Massachusetts since 2008, according to a new report from Pioneer Institute that draws on data from the MassEconomix web tool. In “Broad Industry Sector Trends in Massachusetts, 1998-2018,” two decades of data show fluctuating employment changes across the state, as well as changes in firm size and the types of firms disproportionately headquartered in the Commonwealth.

Study: Economic Recovery from COVID Will Require Short-Term Relief, Long-Term Reforms

As the initial economic recovery from the COVID-19 pandemic has slowed, a new study from Pioneer Institute finds that governments must continue to provide short-term relief to stabilize small businesses as they simultaneously consider longer-term reforms to hasten and bolster recovery – all while facing a need to shore up public sector revenues.

New Study Offers Guide to Recovery in MA Retail, Accommodation and Tourism, and Restaurant Sectors

A new guide to economic recovery in the retail and hospitality industries published by Pioneer Institute calls for the federal and state governments to consider consumption-based refundable tax credits for brick and mortar businesses; the federal government to conduct a detailed study of the costs and benefits of suspending employer-side payroll taxes; businesses to pay special attention to developing and marketing their cleanliness, hygiene and contactless procedures; and third-party customer review sites to include comments about the implementation of COVID safety measures to provide options and reassurance to safety-minded consumers

Pioneer Institute Study Calls for Streamlining State Sales Tax Revenue Collection

At a time when state tax revenues are plummeting, a plan to modernize sales tax collection could get money into state coffers more quickly, according to a new policy brief published by Pioneer Institute.

Study: Safely Reopening Office Buildings Will Require Planning, Innovation

/
Safely bringing employees back into workplaces presents a significant challenge for employers located in office buildings, particularly when it comes to elevator operations and building entry and exit.  To address the challenge, managers must develop plans to control the flow of workers, according to a new study published by Pioneer Institute.

Holyoke Soldiers’ Home Study Targets Inadequate Nursing Home Staffing Standards

Standards enforced at the federal and state levels are insufficient to address chronic staffing issues reported by staff and residents’ families at the Holyoke Soldiers’ Home, making that facility particularly vulnerable to the COVID-19 pandemic, according to new Pioneer Institute research.

Time to follow the science, not fear

Over the past two months, we have all learned a great deal about COVID-19 and the efficacy of - and the new challenges created by - our policy responses. Pioneer Institute believes it is time to shift to a more thoughtful, science-based footing in our approach to COVID-19 policymaking. The following are principles for state and local public officials to consider as we move forward.

Where in Massachusetts is being hit hardest by unemployment due to COVID-19?

Pioneer’s new tool, called “COVID Unemployment Tracker,” provides an interactive look at how economic shutdowns in response to the COVID-19 pandemic are affecting jobs and lives across the state of Massachusetts.

Report Finds “Reopening Day” in the Commonwealth Will Likely Include Phasing in Businesses and Contact Tracing

New study compares the reopening of three European countries – Austria, Denmark, and Germany – to highlight approaches that could inform the Commonwealth’s reopening strategy.