CNBC: Rating the States on Business Climate

By July 7, 2007Economy

List journalism is usually just an easy way to fill space with a minimum of labor. Pick a few categories, add a couple of objective measurements to lend credibility, throw in some quotes, and there you go — a fun story that people want to read. David Wallechinsky and Amy Wallace (The Book of Lists) were true journalistic pioneers.

Still, there’s something about CNBC’s upcoming “America’s Top States For Business” that appeals to us, that impresses us. For one thing, CNBC consulted the National Association for Manufacturing on what factors shape a state’s business climate. So that’s good. And then looking at those categories and their weighting, you have to say, right on.

Ten Categories | maximum possible points for each
Cost of Doing Business 450
Workforce 350
Economy 314
Education 250
Quality of Life 250
Technology & Innovation 150
Transportation 107
Cost of Living 50
Business Friendliness 50
Access to Capital 50
Total Points 2021

Critics of business tend to knock employers as only interested in low taxes and low wages, so they can exploit the worker and fill their moneybags full. Well, bah. In reality the availability of a quality workforce ranks extraordinarily high in a manufacturer’s analysis where best to do business. You can look at all the NAM’s efforts on education and training — and the Manufacturing Institute’s Dream It! Do It! campaign — as evidence that a low-cost business climate is by no means a determining factor in location decisions.

Neither is it trivial. Some high-tax, regulation-heavy, tort-encouraging states — you know who you are — tout their educational expenditures and quality of life as sufficient to attract business. We’ll tax you death and the lawyers will sue your pants off, but, hey there are benefits! Let’s go skiing and then hit the brew pub!

Not a persuasive argument.

So we look forward to CNBC’s week of revealing its rankings and add a few comments as they come up. Because sometimes lists also shed light.

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