The just released 2020 edition of Economic Freedom of North America Missouri ranks as the 12th most economically free state in the country. This is an improvement over last year’s ranking at 16th.
A high level of economic freedom is important, because states with higher levels of economic freedom on average experience faster economic growth, greater entrepreneurial activity, and more prosperity.
The report is published by Fraser Institute, an independent, non-partisan Canadian public policy think tank, in cooperation with state-based research organizations like Missouri’s own Hammond Institute at Lindenwood University.
Missouri’s ranking is better, sometimes substantially so, compared to our neigh- boring states. Kansas ranked a close 14th, but Iowa comes in at 28th, Arkansas at 29th and Illinois at 34th. Such differences bode well for Missouri’s ability to attract businesses and population.
The overall economic freedom ranking is based on 10 variables in three areas. Missouri ranked high in two of the areas: 15th in the area of government spending as a percentage of income, and 11th in the area of assessing the burden of state and local taxes. One area of concern, however, is its labor market ranking, which is 28th.
Previous analysis finds that Missouri’s labor market is beset by too many burdensome restrictions, such as occupational licensing and state tax laws that negatively affect incentives to work. These restrictions slow job creation and hinder economic growth. Reducing such restrictions will improve labor market freedom and enhance economic success for Missouri’s labor force.
Maintaining and increasing Missouri’s economic freedom is an important element to a better future.
Rik W. Hafer