Michigan Falls in Economic Freedom Index

Lower rank due to reforms in other states

Image via the Fraser Institute

The Fraser Institute recently publishedEconomic Freedom of North America 2017,” an annual report that ranks Canadian provinces as well as the states of Mexico and the USA in terms of economic freedom. A state’s place in this index is important because economic liberty is associated with higher personal income and other important measurements of human well-being, and so where Michigan falls in the rankings should be important to policymakers.

The index of subnational governments measures economic liberty by scoring provinces and states in three major areas: taxation, government spending and labor market freedom. These areas are comprised of 10 components which include top marginal income tax rates for individuals and corporations, percentage of unionized workers and minimum wage legislation.

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Michigan finished 30th this year among the 50 states, down from 26th in 2016.* Michigan tied with Iowa again this year. The good news is that Michigan’s overall index score did not change. We fell in the rankings because several sister states — Wisconsin, Alabama, Washington and Montana — improved in the Fraser ranking.

The most economically free state was New Hampshire. It was followed by Florida and Texas (which tied), and then South Dakota. The least free states were New York (50th) and California (49th). West Virginia and New Mexico were tied at 47th.

For more on this subject see, “Economic Freedom and Well-Being Noticed by Top Official.”

*Note: Our blog post from last year read we were 27th among the states. The Fraser Institute report from which that had been drawn was updated and Michigan was reassigned a rank of 26th.

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