In this article, we will be taking a look at the 25 least developed states in the United States. To skip our detailed analysis of the country’s least developed states, you can go directly to see the 5 Least Developed States in the USA.
The United States of America is a highly developed mixed-market economy. The world’s largest economy by nominal GDP and the second-largest by purchasing power parity (PPP) behind China, the land of the free is extremely uneven when it comes to the distribution of resources. Having weathered some massive storms during the decades, the U.S. economy always seems to bounce back strong, with some prominent companies like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT) boasting market capitalizations that exceed that of many countries in the world. Thus, it seems very curious that a country with such massive wealth could not even rank amongst the top 10 in the United Nations Development Programme’s Human Development Index (HDI).
According to economists, there are four key factors that influence economic development and growth: human resources, physical capital, natural resources, and technology. Businesses are also known to contribute significantly to variations in state-by-state development. For instance, businesses that offer housing units, or businesses that provide state residents with retail options, like Target Corporation (NYSE:TGT), Walmart Inc (NYSE:WMT), and Kroger Co (NYSE:KR), can influence a state’s overall development. This applies to both large nations and individual states within those nations. In the case of less-developed states, even those with abundant natural resources, their progress tends to be hindered when they neglect to prioritize technological research and enhance the skills and education of their workforce.
Additionally, Measure of America defines development as the process of enlarging people’s freedoms and opportunities, thus improving their well-being. While these metrics do not measure every aspect of the multifaceted society in the United States, they capture outcomes that are essential to well-being and opportunity. In that regard, the prevailing economic conditions in the United States greatly impact people’s choices on where to live, as personal finances dwindle and inflation rates rise. Many Americans, particularly those with lower incomes, are feeling the burden of financial difficulties and contemplating moving to states with a lower cost of living. For those interested in finding affordable states to live in, 15 Cheapest States to Live In provides more information. On the other hand, individuals with higher incomes have greater capacity to manage their financial strains and may opt to reside in more costly states or cities due to factors like superior amenities, lifestyle options, or employment prospects.
States that are considered ‘least developed’ are low-income areas confronting severe structural impediments to sustainable development, and as such, possess low levels of human assets and are highly vulnerable to economic and environmental shocks. Such states are plagued with incidents of poverty, lower educational attainment, worse health outcomes, and shorter life expectancies compared to the wealthiest states. Additionally, some of these states have a high concentration of rural areas, which tend to have higher poverty rates compared to urban areas. Unsurprisingly, the nation’s poorest states also tend to rank lowest in quality of life metrics and are often regarded as the worst states to live in.
Our Methodology
According to the UNDP, the Human Development Index (HDI) is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable, and having a decent standard of living— thus acting as a geometric means of normalizing the indices for each of these three dimensions. For our list of the least developed states in the USA, we chose the 25 states with the lowest HDI score as of the year 2021, and ranked them in descending order.
Least Developed States in the USA
25. Pennsylvania
Human Development Index score: 0.923
Pennsylvania, officially the Commonwealth of Pennsylvania, is a state spanning the Mid-Atlantic, Northeastern, Appalachian, and Great Lakes regions of the United States. In 2021, the median household income in Pennsylvania amounted to $72,627. This is above the overall U.S. median household income of $70,784.
24. Kansas
Human Development Index score: 0.922
Known for its vast prairies, rolling hills, and natural beauty, Kansas is a landlocked state in the Midwestern United States. The largest industries by revenue in Kansas are Aircraft, Engine & Parts Manufacturing, Corn, Wheat & Soybean Wholesaling and Wireless Telecommunications Carriers, which generated $23.1 billion, $17.6 billion and $16.1 billion in 2022, respectively. Employment in the state has grown at an annualized rate of 1.7% over the five years to 2022.
23. Maine
Human Development Index score: 0.917
Maine, the Northeastern most U.S. state, is known for its rocky coastline, maritime history and nature areas like the granite and spruce islands of Acadia National Park. The Healthcare and Social Assistance, Retail Trade and Educational Services sectors contributed the most to employment in Maine in 2022, representing a combined 45.3% of state employment. Roughly 37.7% of the state’s population had a Bachelors or higher in 2022.
22. Montana
Human Development Index score: 0.916
Montana is a western state defined by its diverse terrain ranging from the Rocky Mountains to the Great Plains. In 2022, Montana’s GDP reached $49.3 billion, representing an increase of 1.4% from 2021. The state’s trailing five-year GDP growth ranks it 20th out of all 50 US states. Montana’s high school graduation rate came in at 86.4%, slightly above the national average of 85.3%.
21. Ohio
Human Development Index score: 0.914
Ohio is a state in the Midwestern United States. Of the fifty U.S. states, it is the 34th-largest by area. With a population of nearly 11.8 million, Ohio is the seventh-most populous and tenth-most densely populated state. In 2021, the median household income in Ohio amounted to $62,689, an increase from the previous year, when the median household income in the state amounted to $60,379.
20. Michigan
Human Development Index score: 0.913
Michigan is a state in the Great Lakes region of the upper Midwestern United States. With a population of nearly 10.12 million and an area of nearly 97,000 square miles, Michigan is the 10th-largest state by population, the 11th-largest by area, and the largest by area east of the Mississippi River. The state employed over 4.8 million people in 2022, ranking it 11th out of all 50 US states. Employment in Michigan has grown at an annualized rate of 2.0% over the five years to 2022, underperforming the national average of 3.7%.
19. Florida
Human Development Index score: 0.911
Florida is the southeasternmost U.S. state, with the Atlantic on one side and the Gulf of Mexico on the other. In 2022, Florida’s GDP reached $1 trillion, representing an increase of 2.5% from 2021. The state’s GDP has grown at an annualized rate of 2.2% over the five years to 2022. According to the United States Federal Reserve Florida’s unemployment rate was 2.5% in December 2022, above the national average of 3.4%.
18. Texas
Human Development Index score: 0.911
At 268,596 square miles, and with more than 30 million residents in 2022, Texas is the second-largest U.S. state by both area and population. The state’s employers added 650,100 nonfarm payroll jobs — a 5% jump — between December 2021 and December 2022 to combat unemployment. However, despite leading the nation with the most companies in the Fortune 500, 53 in total, Texas had a high rate of poverty among its residents, reaching 14.2% in 2022.
17. Arizona
Human Development Index score: 0.908
Arizona, a southwestern U.S. state, is best known for the Grand Canyon, the mile-deep chasm carved by the Colorado River. Also known as the “Copper State,” signifying its abundance in this mineral, Arizona’s top three sectors by total employment are Real Estate and Rental and Leasing, Manufacturing, Healthcare and Social Assistance, while the unemployment rate across the state in 2022 was 3.4%.
16. Idaho
Human Development Index score: 0.907
Idaho is a northwestern U.S. state known for mountainous landscapes, and vast swaths of protected wilderness and outdoor recreation areas. The capital, Boise, is set in the Rocky Mountain foothills and is bisected by the Boise River, which is popular for rafting and fishing. In 2022, Idaho’s GDP reached $78.9b, representing an increase of 3.3% from 2021. Additionally, the state recorded a budget surplus, closing out the year with more than $1.4 billion remaining.
15. Indiana
Human Development Index score: 0.907
Indiana sits, as its motto claims, at “the crossroads of America,” bordering Lake Michigan and the state of Michigan to the north, Ohio to the east, Kentucky to the south, and Illinois to the west, making it an integral part of the American Midwest. In 2021, approximately 133,801 residents of the state’s capital were living under the poverty line.
14. Missouri
Human Development Index score: 0.907
Missouri is a landlocked state in the Midwestern United States on the fringes of the Bible Belt. In 2022, about 6.18 million people lived in Missouri, a slight increase from the previous year, ranking it as the 19th-most populous state of the country. According to WalletHub, Missouri ranked third worst in early education systems in America, with nearly 300,000 pre-K enrollment students dropping out in 2021.
13. North Carolina
Human Development Index score: 0.907
One of the 13 original states, North Carolina lies on the Atlantic coast midway between New York and Florida. Approximately 3.7% of the state’s labor force was unemployed, as measured by U-3 in 2022, compared to the national rate of 3.6%. Despite ranking 20th out of the 50 states in terms of populations, only 35.8% of the state’s residents hold a Bachelors degree or higher.
12. Georgia
Human Development Index score: 0.094
With terrain spanning coastal beaches, farmland and mountains, Georgia is the 24th-largest state in the United States. In 2022, the state of Georgia had a population of 10,887,743, having grown an annualized 0.9% over the five years to 2022, which ranks it 12th out of all 50 U.S. states by growth rate. Georgia’s unemployment rate has trended downwards at a rate of -8.4% over the five years to 2022, underperforming the U.S. economy as a whole.
11. Nevada
Human Development Index score: 0.904
Nevada, officially known as the “Silver State” because of the importance of silver to its history and economy, is the driest state in the U.S., made up of mostly desert and semi-arid climate regions. According to a recent analysis published by Scholaroo, Nevada ranks 49th in education, barely edging out last-place Oklahoma. The state also ranked 46th in school systems which measured student access, school quality and student safety.
10. New Mexico
Human Development Index score: 0.901
New Mexico is one of the largest of the fifty states, but with just over 2.1 million residents, ranks 36th in population and 46th in population density. One of the leading states in the United States in terms of energy, New Mexico accounted for 9.2% of total oil production in the United States in 2021. One the other hand, the state also holds the second-highest unemployment rate in the country, at 5.3%, and fewer than a third of residents hold a higher degree.
9. Oklahoma
Human Development Index score: 0.896
With ancient mountain ranges, prairie, mesas, and eastern forests, most of Oklahoma lies in the Great Plains, Cross Timbers, and the U.S. Interior Highlands, all regions prone to severe weather. A major producer of natural gas, oil, and agricultural products, Oklahoma relies on an economic base of aviation, energy, telecommunications, and biotechnology. Partially in the western extreme of the Upland South, it is the 20th-most extensive and the 28th-most populous of the 50 states in the U.S. In 2021, about 15.6% of Oklahoma’s population lived below the poverty line.
8. Tennessee
Human Development Index score: 0.895
Tennessee, officially the State of Tennessee, is a landlocked state in the Southeastern region of the United States. In 2021, 13.6% of Tennessee’s population lived below the poverty line. This was a decrease from the previous year, when about 14.6% of Tennessee residents lived below the poverty line. Additionally, the State of Tennessee spends about $11,139 per student, nearly $4,000 below the national average of $15,114 per student.
7. South Carolina
Human Development Index score: 0.893
South Carolina is a southeastern U.S. state known for its shoreline of subtropical beaches and marsh-like sea islands. In 2021, the median household income in South Carolina amounted to $62,542. This is an increase from the previous year, when the median household income in the state amounted to $60,341. However, that is still well below the U.S. median. In addition to generally having lower incomes, South Carolina also has a relatively high share of households living in extreme poverty.
6. Louisiana
Human Development Index score: 0.888
Louisiana is a state in the Deep South and South Central regions of the United States. The 20th-smallest by area, the state’s history as a melting pot of French, African, American and French-Canadian cultures is reflected in its Creole and Cajun cultures. Louisiana remains among the states with the highest child poverty rates in the nation and ranks as the 49th happiest state in the United States, the second last in the nation.
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Disclosure: None. 25 Least Developed States in the USA is originally published on Insider Monkey.
