Happiness Index: South Carolina Ranks Worst

Southern States Are Living in the Red

The recession officially ended more than a year ago, but its effects can still be felt by consumers nationwide. The unemployment rate remained stuck near 10% this year, and currently stands at a stubbornly high 9.8% as of November.  Meanwhile, many Americans remain unsure about whether they will have a proper roof over their heads, as one in every 492 homes received a foreclosure notice last month. To make matters worse, many consumers are increasingly hounded by personal debts that they are struggling to pay off. The average U.S. adult owed nearly $25,000 in non-mortgage debt from credit cards, auto loans and the like, as of the end of October, which works out to be about 61% of the total annual income that the average American takes home. That doesn’t allow too much financial breathing room. Yet, for all the menacing statistics, the financial well-being of some regions in the country is significantly better off. In the latest installment of the Happiness Index, MainStreet finds that states in the Northeast and Midwest are beating out other regions in financial well-being, though even these regions are not without problems. By contrast, some states, particularly in the South and Southwest, have fallen far below the national average in each of the above categories, and consumers there are desperately in need of some financial lifelines.


How the Happiness Index Works

Every few months, MainStreet releases a Happiness Index ranking the 50 states and the District of Columbia in terms of their financial health, as determined by the state’s unemployment rate, foreclosure rate and the per capita non-mortgage debt. In order to put together this Happiness Index, we used unemployment data from the Bureau of Labor Statistics and foreclosure data from RealtyTrac, both of which are for November, the most recent month on record. We also used Experian’s data on non-mortgage debt per capita from each state as of the end of October, which is based on a sampling of its consumer credit database. We then paired this data with 2008 Census numbers on the average personal income by state to determine the amount of debt consumers have as a percentage of their total annual income. Each of these three factors was then weighted equally. Finally, we have included each state’s ranking from the Happiness Index we released in November 2009 (the lower, the better). Taken together, we hope this provides a comprehensive snapshot of each state’s financial health and improvement (or lack thereof) as 2010 comes to a close. We’ll start with the 10 most fiscally happy states, followed by the 10 states with the most money woes.


10th Happiest: Connecticut

2009 Rank: 25 Non-Mortgage Debt as % of Annual Income: 42.1% Unemployment Rate: 9% Foreclosure Rate (1 foreclosure per # of households): 1,374 While the unemployment rate in Connecticut falls near the national average, the state has one of the lowest foreclosure rates in the country, and the second lowest amount of non-mortgage debt behind Washington, D.C. Of course, Connecticut also has the second highest median income behind, you guessed it, D.C., which certainly helps. Photo Credit: cliff1060


9th Happiest: Massachusetts

2009 Rank: 26 Non-Mortgage Debt as % of Annual Income: 46.7% Unemployment Rate: 8.2% Foreclosure Rate (1 foreclosure per # of households): 1,222 Massachusetts is essentially on par with Connecticut in every way, except it has a lower unemployment rate. The state has shown vast improvements compared to last year, as the foreclosure rate has improved from one of every 215 to one of every 1,222. The unemployment rate also dropped a full percentage point. Photo Credit: Getty


8th Happiest: South Dakota

2009 Rank: 7 Non-Mortgage Debt as % of Annual Income: 65.4% Unemployment Rate: 4.5% Foreclosure Rate (1 foreclosure per # of households): 2,546 South Dakota has continually ranked near the top of the Happiness Index, thanks in part to its astoundingly low unemployment rate, which sits at less than half the national average. Moreover, it also has the eighth lowest foreclosure rate in the country. Yet, consumers here are saddled with more non-mortgage debt than most states. Photo Credit: Mykl Roventine


7th Happiest: New York

2009 Rank: 17 Non-Mortgage Debt as % of Annual Income: 49.3% Unemployment Rate: 8.3% Foreclosure Rate (1 foreclosure per # of households): 2,871 Say what you will about New Yorkers, but residents in this state are better than most at living within their means. The average consumer has about $24,000 in non-mortgage debt, which may sound like a lot (it is), but that makes New York one of only five states to have a debt to income ratio of less than 50%. So pat yourselves on the back, New Yorkers, but not too long, you still need to pay off those debts! Photo Credit: joiseyshowaa


6th Happiest: Maryland

2009 Rank: 11 Non-Mortgage Debt as % of Annual Income: 53% Unemployment Rate: 7.4% Foreclosure Rate (1 foreclosure per # of households): 1,685 It should come as little surprise that Maryland would be blessed with good financial health. As we’ve reported before, this state has many of the richest counties in the country, thanks in part to wealth flowing in from those who work in Washington, D.C. Partly as a result of this, consumers here are saddled with a smaller percentage of debt and have suffered fewer foreclosures than most states. Photo Credit: Scaramouche!


5th Happiest: New Hampshire

2009 Rank: 22 Non-Mortgage Debt as % of Annual Income: 54.9% Unemployment Rate: 5.4% Foreclosure Rate (1 foreclosure per # of households): 1,064 Not only does New Hampshire have one of the best debt to income ratios, this state also has the third lowest unemployment rate in the country, which is nearly 2 percentage points lower now than it was in November of last year. However, its unemployment rate is still put to shame by the next state on our list. Photo Credit: Leventhal Map Center


4th Happiest: North Dakota

2009 Rank: 6 Non-Mortgage Debt as % of Annual Income: 63.8% Unemployment Rate: 3.8% Foreclosure Rate (1 foreclosure per # of households): 6,395 Apparently, someone forgot to tell North Dakota that the U.S. experienced an economic downturn. This state has by far the lowest unemployment rate in the country, and the second best foreclosure rate. In fact, the employment situation here is so good it’s actually better than the national average in 2007, prior to the recession. Photo Credit: afiler


3rd Happiest: Vermont

2009 Rank: 10 Non-Mortgage Debt as % of Annual Income: 63.3% Unemployment Rate: 5.7% Foreclosure Rate (1 foreclosure per # of households): 31,262 If the U.S. is experiencing a foreclosure crisis, you wouldn’t know it in Vermont. Just one of every 31,262 homes was foreclosed on last month, which makes North Dakota’s low rate look like foreclosure mania. Photo Credit: Bruce Tuten


2nd Happiest: Nebraska

2009 Rank: 1 Non-Mortgage Debt as % of Annual Income: 59.5% Unemployment Rate: 4.6% Foreclosure Rate (1 foreclosure per # of households): 2,178 Nebraska has long been the reigning champ on our Happiness Index, but it has finally been dethroned. Still, if you’re looking for a place to live in financial bliss, you could do worse than Nebraska, which has the third lowest unemployment rate nationwide and the ninth best foreclosure rate. Indeed, Nebraska’s only Achilles’ heel seems to be the personal debt to income ratio of its residents, which sits near the national average. As of 2008, the average Nebraskan earned $39,150 a year, but Experian found each adult has just more than $23,000 in debt. Photo Credit: Kables


The Happiest: Wyoming

2009 Rank: 14 Non-Mortgage Debt as % of Annual Income: 56% Unemployment Rate: 6.6% Foreclosure Rate (1 foreclosure per # of households): 2,800 Say hello to the new leader in financial well-being. It’s been a good year for Wyoming. The foreclosure rate has dropped by more than half, and the unemployment rate has improved as well. Meanwhile, the state ranks in the top 10 for lowest debt to income ratio. The only downside is that Wyoming is also one of the most taxed states in the country. I guess you have to pay to have it this good. Photo Credit: Whatleydude


10th Least Happy: Utah

2009 Rank: 24 Non-Mortgage Debt as % of Annual Income: 73.9% Unemployment Rate: 7.5% Foreclosure Rate (1 foreclosure per # of households): 221 Utah leads off our list of the 10 states that are hurting the most in this economy, due largely to its atrocious foreclosure rate, which is the second worst in the country. To make matters worse, consumers here have so much debt aside from real estate that it would require nearly three quarters of their annual paycheck to pay it off. Really, the only silver lining in this state is that unemployment actually sit a little below the national average. So while residents may be saddled with debt and on the verge of losing their homes, at least they have a decent chance of finding a job and trying to work their way out of that hole. Photo Credit: Pink Sherbet Photography


9th Least Happy: Ohio

2009 Rank: 43 Non-Mortgage Debt as % of Annual Income: 68.3% Unemployment Rate: 9.8% Foreclosure Rate (1 foreclosure per # of households): 486 As bad as things are in Ohio right now, the state used to be much worse off. This time last year, Ohio had an unemployment rate above 10% and one of every 171 homes had received a foreclosure notice. But clearly, the financial situation in Ohio has not improved fast enough as the state continues to sit in the bottom 10 of the Happiness Index for another year. Photo Credit: DRB62


8th Least Happy: Oregon

2009 Rank: 47 Non-Mortgage Debt as % of Annual Income: 68.4% Unemployment Rate: 10.6% Foreclosure Rate (1 foreclosure per # of households): 658 California gets most of the attention for being the big fiscal disaster on the West Coast, but residents in Oregon may actually have it worse. The state has the fifth worst unemployment rate in the country and is in the bottom 15 for foreclosure rates. But what really makes life harder for Oregonians is their debt to income percentage, which is more than 10% worse than California’s. Photo Credit: bandita


7th Least Happy: Florida

2009 Rank: 51 Non-Mortgage Debt as % of Annual Income: 63.6% Unemployment Rate: 12% Foreclosure Rate (1 foreclosure per # of households): 267 There are some signs of hope in Florida, although there is still a long, long way to go. Florida ranked dead last on 2009’s Happiness Index, mainly because of its horrible foreclosure situation. At the time, one of every 56 homes was foreclosed on, making it the second worst in the country. One year later, that rate has dropped to one in 267, which is significantly better, though still in the bottom five nationwide. The state’s unemployment rate, on the other hand, has actually gotten worse, increasing by 1 percentage point from the year before. So until the employment situation begins to turn around, it seems doubtful the state’s financial well-being will budge much more than it has already. Photo Credit: Karen Horton


6th Least Happy: Nevada

2009 Rank: 50 Non-Mortgage Debt as % of Annual Income: 62% Unemployment Rate: 14.3% Foreclosure Rate (1 foreclosure per # of households): 99 Nevada was hit the hardest of any state by the foreclosure crisis that began a couple years ago, and is still struggling to gain its footing. By the end of 2009, one of every 23 homes was foreclosed on. If your home didn’t have a foreclosure notice on it, the one across the street probably did. Since then, that rate has dropped to one of every 99 homes, which may be an improvement, but if you compare it to a state like Vermont, with a foreclosure rate of one in every 31,262, it’s difficult to understand how these two states can be part of the same country. Photo Credit: matze_ott


5th Least Happy: Idaho

2009 Rank: 46 Non-Mortgage Debt as % of Annual Income: 76.4% Unemployment Rate: 9.4% Foreclosure Rate (1 foreclosure per # of households): 301 Residents in Idaho have more debt than they know what to do with. The average person here has enough credit card debt and loans to wipe out more than three quarters of their annual income, the fourth worst debt to income percentage in the country. Add to this the sixth highest rate of foreclosure nationwide, and you have a recipe for some bad bank statements. Photo Credit: amanderson2


4th Least Happy: Arizona

2009 Rank: 48 Non-Mortgage Debt as % of Annual Income: 74.1% Unemployment Rate: 9.4% Foreclosure Rate (1 foreclosure per # of households): 262 Arizona continues to rank in the bottom five of the Happiness Index, as the state struggles with its own foreclosure crisis and an unemployment rate that can’t seem to dip below 9%. Photo Credit: Ken Lund


3rd Least Happy: Michigan

2009 Rank: 45 Non-Mortgage Debt as % of Annual Income: 69% Unemployment Rate: 12.4% Foreclosure Rate (1 foreclosure per # of households): 296 Michigan’s economy was ravaged by the collapse of the auto industry in Detroit, but as bad as things are now, they have improved significantly from just one year ago. The unemployment rate in the state was more than 15% in November of last year and now stands at just more than 12%. Likewise, the Census Bureau recently announced that Detroit experienced the biggest decline in joblessness in 2010, as the city’s unemployment rate dropped by 2.4%. Photo Credit: femaletrumpet2


2nd Least Happy: Georgia

2009 Rank: 39 Non-Mortgage Debt as % of Annual Income: 72.4% Unemployment Rate: 10.1% Foreclosure Rate (1 foreclosure per # of households): 279 While other states have shown signs of improvement, Georgia’s unemployment rate has remained frozen at 10.1% throughout the year and its foreclosure rate continues to rank among the bottom five nationwide. Perhaps because of these two factors, Georgians have seen their personal debt balloon during and after the recession. Back in 2007, the average debt to income percentage was just less than a third, but now it is approaching three quarters. Photo Credit: totalAldo


The Least Happy: South Carolina

2009 Rank: 38 Non-Mortgage Debt as % of Annual Income: 75.9% Unemployment Rate: 10.6% Foreclosure Rate (1 foreclosure per # of households): 530 In recent years, South Carolina has made headlines for its infamous politicians, whether it be the governor who flees the country to have a love affair, or the unemployed Senate candidate who is believed to have won the Democratic nomination simply because his last name came first alphabetically on the ballot. But these stories may have obscured the deeper problem that residents in this state face with their bank accounts. South Carolina does not rank worst in any of the three categories measured, but it does rank in the bottom 10 for all three, and in the bottom five for unemployment rate and personal debt. Taken together, these three factors will likely serve as a joint attack on a resident’s financial well-being, and if politicians here are not active in remedying the problem, South Carolina could quickly be left behind as the rest of the nation begins to recover. Photo Credit: Shoshanah


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