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Report ranks Iowa as the state with the worst economy in the nation.

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June 3rd, 2025 by Ric Hanson

CEDAR RAPIDS, Iowa (KCRG) – A new WalletHub report ranks Iowa as the state with the worst economy in the nation. The report ranked states according to economic activity, economic health and innovation potential. Out of the 50 states and the District of Columbia, Iowa ranked last in economic activity, 48th in economic health and 28th in innovation potential. The report also claims Iowa has one of the lowest changes in GDP, the lowest amount of startup activity and one of the lowest changes in non-farm payrolls.

Despite that report, the head of Iowa’s economic development agency told a Cedar Rapids Rotary Club Monday that the state’s economy is strong. She also acknowledged one big issue holding the economy down. KCRG-TV says that while Iowa Economic Development director Debi Durham celebrated the successes of Iowa’s economy, she also highlighted a major issue holding it back: slow population growth and an aging population.

Iowa has about 1.6 million workers. That’s about 20,000 less than it had before the Pandemic. Without more workers, companies have a hard time expanding or moving to Iowa. Some cities, like Cedar Rapids are concentrating on bringing younger workers to Iowa by increasing quality of life items, like the trail system and trying to attract businesses that would be more popular with the younger generation.

Debbie Durham says economic development depends on quality of life, housing, and creating a state where people want to settle down. According to Durham, Iowa needs to capitalize on tourism efforts that already bring people to the state. She and other community leaders say despite the population problem, Iowa’s economy is better now than it has been for a long time.