Growth Newsletter

Economic Exodus: Mapping Economic Winners and Losers in Post-Pandemic America

One of the defining characteristics of black swan events is the exposure of economic fault lines and blind spots throughout a society. As the country and the world scrambled to react to the new reality of accelerated digital transformation, remote work, and government stimulus, these factors introduced an element of chaos that had not been seen since the 2008 financial crisis. For some, chaos is a pit. For others, chaos is a ladder.

Pandemic-era America proved how strategy and policy shape resilience and growth at the state level in times of turmoil.

Mainstream narratives suggested that states with large populations or the least vaccinations were hit hardest, but the realities of the situation extend beyond population and politics. Examining the elements that positioned states for growth while keeping in mind the components that led to stagnation will provide critical context to navigate tail risk events in the future.  

Following the Money

A consequential shift in wealth dynamics swept across the United States from 2019-2023. Migration, or what some have dubbed a “mass exodus”, from traditionally wealthy states to states that are not as historically financially robust. Most notably, New York and California were affected most by this phenomenon.

The maps below track the movement of adjusted gross income (AGI) and taxable income across state lines through IRS Income Migration Statistics.


Between New York and California, the combined AGI outflow was $88.5B, a staggering loss of wealth for two core economic producers for the country. Manhattan alone lost $16.5B of outflows to other states, most of that money flocking to Florida’s coast. $2.9B went to Miami-Dade County and $1.1B in taxable income headed for Palm Beach County, FL. In fact, nearly 27.7 cents on every dollar from Manhattan went to the state of Florida, totaling a mind-boggling $4.6B in total. 

Still, despite these changes, it is important to note that both California and New York still rank amongst the highest for AGI inflows due to the advanced industrial and financial infrastructure in place in those locations, but when considering the AGI migration’s net impact, a different set of states are leading the charge.

Source: Economic Innovation Group

The Robin Hood Effect

One of the most thought-provoking aspects of the pandemic money migration was the economic rise of historically underperforming states contrasted with the stagnation of states previously recognized as financially robust.

By examining GDP per capita from 2019 (pre-pandemic) to 2023 (post-pandemic), the overall impact AGI movements can be analyzed further while still factoring in other critical elements of GDP (consumption, investment, government spending, net exports). This way, changes and development of overall economic health on a state-by-state basis can be mapped more holistically. Using data from the Bureau of Economic Analysis (BEA), several clear winners stand out:

Source: Bureau of Economic Analysis

GDP is a broad economic indicator and is an excellent gauge on performance for states. However, the use of GDP per capita adds granularity to the analysis, highlighting not only the overall economic growth but also how efficiently states translated that growth to benefit their populations. BEA data reinforces sentiments of Florida, Texas, Arizona and Montana coming out ahead, but the data also reveals several unexpected success stories: Idaho, Nebraska, Utah, and Arkansas saw substantial growth during the pandemic.

Source: Bureau of Economic Analysis

Conversely, states frequently criticized for their COVID-era policies, such as California, New York, Illinois, and Massachusetts, saw stunted growth performance over the same period. This comes at an even starker contrast when considering that between 2012-2019, these states were growing their GDP per capita at a considerable rate.

Source: Bureau of Economic Analysis

It is important to note that growth percentages are relative to starting points. In the next visualization, the starting point of GDP per capita is included and factored against the percentage change in GDP per capita from 2019-2023 in a co-distribution.

Source: Bureau of Economic Analysis

The optimal area on this chart is the upper-right, showing high starting GDP and strong growth from 2019-2023. States like Texas, Florida, Washington State, and North Carolina hit this mark. Cinderella stories with low starting GDPs and a high growth rate include Idaho, Montana, Nebraska, Arkansas, South Dakota, and Maine. The District of Columbia is a successful outlier.

The bottom left of this chart is the “pit of despair”; areas low starting GDPs and low growth rates from 2019-2023. Hawaii, Louisiana, Connecticut, Wisconsin, and Minnesota find themselves here.

New York and California are outliers in this analysis. Both rank in the top three for total GDP, but New York falls in the bottom percentile of growth and California did not fare much better.

Another element of this analysis is comparing a state’s growth trajectory pre- and post-pandemic.

On this chart, leaders are evident. States that outperformed their 2012-2019 trend include North Dakota, District of Columbia, Wyoming, Texas, and Nebraska. GDP per capita in these areas grew $8,500 to $15,000 above what their 2012-2019 trend would predict. Arizona, Florida, and Arkansas outperformed by $5,000, but pleasant surprises like Oklahoma and Arkansas rose alongside this subset of states too.

Fortunately, laggards did not experience losses proportional to the gains of winners. New York was hit particularly hard, with GDP per capita falling $7,000 in comparison to its 2012-2019 trend.

Maryland, Connecticut, Wisconsin, Delaware, California, Massachusetts, and Pennsylvania were in the next subset of below-trend states, each falling around $5,000 below their 2012-2019 growth trajectories. Looking at the states that declined, there is a trend that begins to form—the Northeast, Pacific and portions of the East North Central section of the Midwest experienced significant, negative growth trends. 

An unexpected insight emerges from analyzing these off-trend regional patterns. With some variation, states that have had high poverty rates and low GDP per capita in the past came out of the pandemic economically better than before.

Source: American Progress

A Path to Growth Opportunities

So, given these analyses, what positioned states for economic growth after COVID-19? Was it strictly financial? Did people leave states with exorbitant housing prices and high tax rates for those with more favorable conditions in a time of economic distress? Was it a Libertarian surge? Did a focus on the personal freedoms that states violated with lockdowns and arbitrary mandates push them to the now-growing states? Or was it something simpler, like the weather? Did people tire of their cramped, cold, Northeastern apartments and opt for the South’s wide-open spaces or coastal Margaritavilles instead?

The answer is complex, but at its core, it comes down to having a clear growth roadmap. Examining the strategies, tactics, and policies that set states like Arizona, Florida, Texas, and Utah up for success in a post-pandemic America is a worthwhile practice for all, but particularly for the economic behemoths that are experiencing stagnation and financial diaspora.

Annually, Prolific partner ALEC (American Legislative Exchange Council), publishes a report titled Rich States, Poor States, which ranks US states based on their economic competitiveness. The goal of this report is to gauge the effect of state policies on economic performance and growth. Scores are determined by analyzing 15 equally weighted policy variables including Personal Income Tax, Property Tax Burden, Public Employees per 10,000 of Population, State Minimum Wage, and Right-to-Work laws.

Source: Rich States, Poor States

Source: Rich States, Poor States

When exploring both the performance and outlook charts, it is hard to ignore the prevalence of states that fared well in the pandemic being higher in Rich States, Poor States stadings. ALEC Chief Economist Jonathan Williams explains that, “Americans are voting with their feet and fleeing the high tax, high regulation states like California, New York and Illinois for pro-growth, pro-employment havens like Utah, Idaho, and Arizona, where leaders rely on a set of free market principles and pro-taxpayer reforms that landed those states at the top of our rankings.”

Utah is looked at as a model case study when studying state-specific economic development and growth. For the last 17 years, the Beehive State has had a stranglehold on the top spot of the Rich States, Poor States rankings.  

Utah State Senate President J. Stuart Adams is quoted saying, “We continue to emulate our pioneer ancestors’ industrious nature and strategic foresight that transformed our state into the economic powerhouse it is today. This past year marked the fourth consecutive tax cut, allowing Utahns to keep a cumulative $1.3B of their hard-earned money, providing them more financial freedom and directing more funds back into Utah businesses. We also successfully balanced our state budget while amply funding education, transportation and more to maintain Utah’s high quality of life.”

Other winners identified through AGI and GDP analyses are also leaders in Rich States, Poor States. Idaho rose to the second spot largely due to significant 2022 tax cuts. Texas leaned into a similar strategy in 2023 with its largest tax cuts in state history, jumping from 13th to 6th and achieving the 2nd highest level of absolute domestic migration of all states.

Over the last few years, multinational corporations like Oracle, Chevron, CBRE, and Tesla have relocated their headquarters to the Lone Star state. Tesla has also planned a 7.9-million-square-foot Gigafactory in Austin that will employ around 5,000 people.

Perhaps unsurprisingly, the state that came out of the pandemic in a far worse position, New York, was ranked at the bottom (51st) of the Rich States, Poor States Economic Outlook Rankings. Followed closely were Illinois and California, who saw considerable economic downturns post-pandemic as well. Long-standing headquarters like Hewlett Packard Enterprise and Citadel relocated from California and Illinois, citing cost savings and favorable business environments in Texas and Florida.

“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” – Charles Darwin

The stakes have never been higher for the complacent economic titans of America. Will California, New York, and Illinois embrace the competitive spirit that once defined their success and adapt to modern growth strategies reshaping the national landscape? Or will they give way to rising stars—states like Arizona, Florida, Texas, and Utah—to launch America into new frontiers?