Dive Brief:

• New York, Washington and Delaware are the country’s top three most productive states when it comes to the value companies and their employees added to the economy last year, according to Seattle, Washington-based Upflip, a business platform for entrepreneurs.

• Empire State workers topped the productivity chart by generating $120.67 per hour worked or a total $1.725 trillion in value-added economic output in 2022; Washington state came in second with $107.12 per hour and a total contribution of $589.47 billion; and Delaware was third with workers’ hourly value-add at $104.09 hourly generating $71.9 billion, according to the study’s analysis of the U.S. Bureau of Labor Statistics data. 

• The economic value per hour worked is a key metric business owners can use when deciding where to locate a business, a spokesperson for Upflip said in an email. “The takeaway for employers is that it can offer insights [into] where might be the most effective places to locate the operations of a business in the U.S. by showing alternative states to the usual hubs like California and New York,” the spokesperson said. 

Dive Insight:

Businesses and their executives have had more leeway around where they can locate businesses since the acceleration of remote work in the COVID-19 pandemic. Productivity is of course just one of the many factors that business executives consider when deciding where to do business, with tax rates, climate and even a state’s culture among the other considerations. 

For example, Illinois mounted a full court press last year touting its advantages as a place of business as executives mulled the repercussions of the Dobbs v. Jackson decision that overruled the federal protections provided to those seeking abortions by Roe v. Wade. 

Among the biggest concerns for many business is a state’s tax burden because they can hamper profits. Notably, several of the states that scored at the top of Uplift’s productivity gauge were recently ranked among the worst for businesses when it comes to taxes. 

New Jersey, which came in at eighth in productivity with value add per hour worked of $93.73 in the Garden State last year, ranked dead last in corporate tax rankings, while New York ranked second to last, according to the Tax Foundation’s State Business Tax Climate Index, CFO Dive previously reported.

The most productive states list was dominated by larger states but Alaska and North Dakota made the list, likely owing to the strength of their energy sectors. Alaska ranked seventh with a value-added output of $47.7 billion or $99.80 value added per hour, and North Dakota was tenth best, generating $57.4 billion or $90.28 hourly. 

On average, U.S. workers contributed $79.48 hourly to the economy, according to the study.