The 5 Richest States in America
Jun 2nd 2013 8:20AM
Updated Jun 2nd 2013 2:00PM
The United States is a wealthy nation when compared to the rest of the world. Based on per-capita GDP at purchasing-power parity, America ranks as the third-richest country among the world's top 50 economies, and its economic power can be felt around the globe. The U.S. is a diverse nation, however, and not all of its states and territories are alike in terms of riches. Among America's states, where are people earning the most?
Taken from data provided by the Commerce Department's Bureau of Economic Analysis and based on 2011 state per-capita GDP in 2005 dollars, here are America's five wealthiest states and territories. While a few no-brainers make the list, some of the richest states may surprise you.
5: Wyoming, $55,516 per capita
It's hard to think of Wyoming as one of the wealthiest states in the country, but its citizens do well. In addition to ranking No. 5 in terms of GDP per capita, it's among the top 10 states by personal income per capita. Wyoming has seen its GDP decline recently, losing 1.2% in 2011 -- more than any other U.S. state. While Wyoming's rank on this list owes partly to its tiny population -- it is the least populated state with just 576,000 people in 2012 -- its economy is no slouch.
Mining fueled more than $11 billion in GDP in 2011, with the manufacturing, real-estate, and transportation industries also contributing strongly to its economy. Coal mining has been a boon for the state: According to the Energy Information Administration, Wyoming boasted nine of the 10 top-producing coal mines in the U.S. last year, with two mines alone making up 20% of total American coal production. While low prices and waning public sentiment have hurt the coal industry, some firms have thrived in Wyoming. Peabody Energy , the biggest public coal-producer in the world, operates Wyoming's largest coal mine, the North Antelope Rochelle mine. That mine produced more than 105 million short tons of coal in 2010 alone for Peabody. The company also operates the 10-largest coal mine in America: its Rawhide mine, also in Wyoming, with 2010 production of more than 11 million short tons of coal.
4: Connecticut, $56,242 per capita
Connecticut's hardly a surprise on this list. Its per-capita GDP ranks high, but its personal income per capita tops all its competitors, as Connecticut's citizens bring home more than Americans from any other state. The state's GDP grew by 2% in 2011, and unlike Wyoming, Connecticut boasts a diverse economy with strength across numerous industries, from finance to health care to durable-goods manufacturing. Connecticut's economic prowess isn't at all shocking when you take a look at some of the companies headquartered there. United Technologies, headquartered in Hartford, employs more than 26,000 Connecticut citizens -- more than a 10th of its total employee roster.
Connecticut has also forged its share of innovative firms, with Alexion Pharmaceuticals a standard-bearer in that regard. Alexion earned its big breakthrough with its orphan drug Soliris, a treatment for an ultra-rare cause of anemia that has emerged as a blockbuster for this small firm. Alexion recently earned another orphan drug designation for a new experimental therapy under development, keeping this company at the forefront of Connecticut's innovative edge -- an edge that has fueled this state's wealth.
3: Alaska, $61,853 per capita
Alaska has thrived in America's energy boom. The U.S.' largest state by territory boasts not only a strong per-capita GDP but also provides its citizens with a top-10 per-capita personal income that ranks above much more populous states such as California and Rhode Island. Alaska's GDP was the fifth-fastest-growing state economy in 2011, and a recent decision by the state's legislature to offer tax breaks to leading oil firms could send Alaska's economy surging even higher.
ConocoPhillips , one of Alaska's major energy players, has already warmed up to Alaska's new offer. While the company halted its drilling off the state's coast, ConocoPhillips plans to increase investment and production in its North Slope oil fields. It's a welcome start for Alaska, which has seen its energy industry taper off in recent years, and if other leading companies follow in ConocoPhillips's footsteps, Alaska could soon move up this list.
2: Delaware, $63,159 per capita
Unlike the other states on this list, Delaware has a significant gap between its per-capita GDP and its personal income per capita, which ranks only 23rd out of all 50 states. Still, the state's economy saw 1.6% growth in 2011, and like Wyoming, Delaware is dominated by a single industry: finance.
The financial industry made up more than 38% of Delaware's total GDP in 2011, far ahead of the next-highest-producing industry, real estate. Delaware's business-friendly environment, with cheap incorporation fees and friendly corporate law, has made the state a haven for public companies. According to the Delaware Department of State, more than 50% of all American publicly traded firms have legally incorporated in the First State. While that has neither made Delaware an outright business powerhouse nor lifted its citizens to the heights of America's wealthiest, it has fueled the state's financial and legal professions and rewarded Delaware's economy.
1: Washington, D.C., $148,291 per capita
Well, it's technically not a state, but no list of the U.S.' wealthiest locales is complete without mentioning its richest territory, Washington. The U.S. capital has become a boom town in the aftermath of the 2008 recession, with its economy growing 1.9% in 2011. D.C. also boasts a higher per-capita person income than all 50 states.
Unsurprisingly, professional and technical services and the government dominate D.C.'s economy, comprising more than half of its 2011 GDP. The defense sector has thrived in Washington's new renaissance, with some of the industry's top firms having a major presence inside the District's borders. Lockheed Martin has soared on the defense boom as the U.S. government's largest contractor in 2012, outpacing the next-largest contractor, Boeing, by more than $7 billion obligated, according to the General Services Administration. Lockheed has pulled in 13 quarters of revenue growth since the first quarter of 2009, with sales declining in just four quarters. Washington's boom hasn't appealed to all of America in recent years, but it's been a windfall for Lockheed and the government's biggest contractors.
Making the most of U.S. growth
Each of these states (or territories) has thrived in its own way, from Wyoming's coal boom to Connecticut's innovative edge. While this list is hardly a signal to pack up and move to one of these successful states, it's a sign of how America's economy is improving in the years since the recession, with major events such as the energy boom powering newfound wealth in Alaska and other states. The riches haven't flowed down to every state yet, but one thing's clear: America is on the way back up.
The article The 5 Richest States in America originally appeared on Fool.com.Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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