(The Center Square) – California has one of the best gross domestic products (GDPs) in the country but it has bleak economic prospects according to the newly-released Rich States, Poor States report based on the conservative ALEC-Laffer State Economic Competitive Index.
The report said California had an above-average economic performance from 2012 to 2022, ranking 21st out of 50 states. Much of that was fueled by California ranking seventh in state GDP. However, the report, calculated by looking at the state’s domestic migration, non-farm payroll employment, and state gross domestic product, casts doubt on California’s economic outlook, among other factors.
ALEC-Laffer ranked California 47th out of 50 states in economic outlook, indicating that it thinks the state’s economy will fall in the rankings in the future.
California makes ALEC-Laffer pessimistic about its future for a few reasons.The report argues that California is not a business-friendly state, noting that its 14.4% top marginal personal income tax rate is the third-highest in the country, while its 8.84% top marginal corporate income tax rate is one of the top 10 highest in America.
Outward migration was also a big problem, with California experiencing the second most of it out of any state. Most states gained domestic population via migration, while California lost it.
Additionally, California is not a right-to-work state, and its $16 hourly minimum wage is the second-highest in the country.
California performed well in just two aspects of the rankings. It got points for its lack of an inheritance tax, and for having the 12th fewest public employees per 10,000 population, the release said.
California’s economic outlook has been consistently poor in these rankings; it has been at least 45th out of 50 states, or worse, in every year since 2017.
