Industrial development is a thorny issue. While the promise of new jobs can secure votes, these deals are typically shaped to give benefits to the employer that may exceed the economic value of the move.
Take, for example, the Foxconn deal in Wisconsin. Under former Gov. Scott Walker, the state approved the largest subsidy deal to a foreign firm in history—between $3 billion and $4.8 billion, depending on if Foxconn meets certain targets—in exchange for a $10 billion factory that would employ 3,000 state employees. The deal dictates that employment would grow to 13,000 as early as 2022. The deal was criticized from the start, with independent analysts suggesting that the deal would not break even until 2043 (reported by the Verge), that Foxconn has broken similar deals with other locations in the past (reported by CNN), and that the state is paying between $231,000 and $346,000 per job. However, desperation from the deal allowed the Walker administration to ignore red flags and to waive environmental protections.
Despite the deal, Foxconn has indicated that it is reconsidering its manufacturing plans due to labor costs. As the end of 2018, Foxconn only employed 200 in-state employees in spite of significant drains to local and state coffers. Wisconsin reflects a cautionary tale about the importance of state industry on the economics of the state. But, is there a way to measure the health of a state's industrial base?
Stacker examined data from the United States Bureau of Economic Analysis data (last updated in 2017) to determine the nation's most diverse economies. To weigh this, we relied on the Herfindahl-Hirschman Index—a measure to determine a firm's or industry's concentration in a market. HHI index was calculated with 14 private industries and government/government enterprises. The more likely a firm or industry has a monopoly on the market, the higher the score would be. Full dominance of a market would be reflected by a score of 10,000. The US Department of Justice uses HHI scores to determine if a firm is a monopoly. The national HHI is 945.5.
Results are ranked by HHI index from high to low, with a low index representing a more diverse economy. Stacker's gallery shows how much of the state's/territory's GDP is government spending, what are the state's largest private industries, and how many industries contribute more than 4% to the state's gross domestic product (GDP).
Keep reading to find out if your state is the most or least economically diverse state on our list.