CNBC: The Best States for Business

By July 16, 2007General

CNBC wrapped up its series, “America’s Top States for Business,” last Friday, concluding that Virginia ranks No. 1. Correspondent Scott Cohn’s video report outlining the state’s advantages featured a great manufacturer, the state’s No. 1 private employer, Northrop Grumman; Cohn broadcast live from the shipyard at Newport News.

America’s Top State for Business, Virginia, won its crown through consistency. Like the Old Dominion State itself, Virginia was not a flashy performer in our study, never finishing higher than No. 3 in a single category (Economy). But Virginia also rarely stumbled. Its worst showing was in the Cost of Living category, where the expensive communities in the Northern part of the state dragged Virginia down to No. 35.

All in all, a worthwhile and credible effort from CNBC, reflecting the priorities that most manufacturers share. (We know that the NAM’s Competitiveness Redbook,which ranks the states according to 50 indicators, served as a resource.) And the results seemed about right: 5. North Carolina, 4. Georgia, 3. Utah, 2. Texas, and 1. Virginia.

None of those states is a high-tax state, and they are all right-to-work states. At the same time, their workforces and educational systems are competitive. Indeed, none of the top five states scored below eight in the workforce category.

One interesting note: Utah got dinged for being 45th in education, even though achievement scores are improving better than anywhere else. It’s the old debate: School spending doesn’t necessarily equate to high scores; Utah no doubt benefits from its high percentage of stable families.

Did we mention top top five were right-to-work states? Cohn:

At 350 points, Workforce is our second heaviest-weighted category, and among the factors we considered was the likelihood of workers in a given state to belong to a union. This particularly hurt Northern states, plunging New York, for example, to dead last in the category. As a native Midwesterner who covered the auto industry for many years, I knew that wouldn’t sit well with some people back home. But I also know that business follows the path of least resistance. Business leaders view unions as resistance, and business is what our study is all about.

Resistance? Not exactly. More like an uncontrollable factor that, at least for most enlightened employers, brings little positive to the workplace.

The grid portraying the results for all 50 states in the 10 categories and overall is here. Alaska and Hawaii, OK, you’ve got geographical challenges that are hard to overcome. Rhode Island, well, what’s your problem?

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