Why New York is objectively America’s worst state

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New York has been losing residents in droves for decades.

It’s seen the biggest net out-migration of any state since April 2020.

In fact, the Empire State has lost population relative to the rest of the country every single year since 1953. Why?

The most comprehensive study of state-level economic and personal freedom to date, which we wrote for the Cato Institute, reveals New York ranks dead last — as it has every year since 2000.

Simply put, people can’t handle the crushing taxes and labor regulations.

New York’s greatest challenge is the monstrous culture Big Government has created — one marked by waste, incompetence and sclerosis.

The Empire State just can’t get things done anymore.

Subway construction costs are at $2.5 billion to $3.5 billion per mile, roughly 10 times higher than the world average.

By every measure in the rankings, it’s been one of the most corrupt states.

New York couldn’t even get marijuana legalization right: Red tape promoted a vigorous black market, and open-air consumption has continued unregulated.

Things weren’t always rotten. In 1962, New York’s state-level tax burden was lower than the national average.

But progressive programs required major tax and spending hikes, which in turn attracted interest groups eager to get a slice of the pie.

Ideologues and concentrated interests gained enough influence in the Legislature to steer policy, creating regulatory sludge that gummed up innovation and commerce.

Rent control in New York City, which dates to the 1940s, has also been a huge negative.

A well-regarded study found annual losses to tenants alone of about $3 billion in today’s money.

That’s because rent control has driven rents up and housing quality down.

Instead of reforming or abolishing it, though, New York has tightened it, giving property owners even more reason never to go into the business of building, renovating or renting out apartments.

New York’s labor laws promote the highest union-coverage rate in the nation — and government privileges give unions a stranglehold in many workplaces.

That hurts many workers, especially in manufacturing.

Manufacturers compete in a global marketplace, so when you drive up their costs, they have the choice of going out of business or moving production elsewhere.

Manufacturing should be a good fit for upstate, where it has a long history and there is still a skilled workforce.

But the state with the biggest manufacturing share of employment today is Tennessee, which has no income tax, light labor regulation and, perhaps most important, the freedom to build.

Rust Belt states, like Indiana and Wisconsin, have been moving toward this free-market model, and it’s worked for them.

Indiana, the freest Great Lakes state, is also the only one to enjoy net in-migration since April 2020.

When you look at the whole 21st century or even just the years since the financial crisis, states with more economic freedom have grown faster, and states with more economic and personal freedom attract residents from states with less.

It’s no accident less freedom and slow growth have gone hand in hand in New York.

If upstate New York were an independent entity, you could bet it would copy those states and move toward a more competitive economic model.

Since that isn’t an option for now, Albany should loosen the reins.

If history is any guide, this strategy would finally turn around the state’s long-term decline.

William Ruger is president of the American Institute for Economic Research. Jason Sorens is an economist at the American Institute for Economic Research and founder and board director of the Free State Project.

Twitter: @WillRuger and @JasonSorens



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