On CNBC’s ranking of America’s Top States for Business, Minnesota’s economy tumbles 12 places
In 2015, Governor Mark Dayton’s office trumpeted CNBCs ranking of Minnesota as “America’s Top State for Business”. Last year, they advertised the state’s third place ranking. So far, there is no comment from the Governor’s office on the 2018 ranking. One wonders why.
A cynic might suggest it is because Minnesota has now fallen to sixth. This is still pretty good, to be sure, but the direction of travel ought to be a concern.
What we do well and not so well…
Minnesota held its ground in the categories Workforce, Quality of Life, and Technology and Innovation. It gained some ground on the measures Infrastructure, Cost of Living, and, happily, Business Friendliness. This last ranks “the states on the freedom their legal and regulatory frameworks provide for business.”
But Minnesota slipped one place on Access to Capital (17th), three places in Education, and two places in Cost of Doing Business (38th). This last one looks
…at the competitiveness of each state’s tax climate, as well as state-sponsored incentives that can lower the cost of doing business. Utility costs can add up to a huge expense for business, and they vary widely by state. We also consider the cost of wages, as well as rental costs for office and industrial space.
But the real blow came in the Economy category. According to CNBC,
We look at economic growth, job creation, consumer spending, and the health of the residential real estate market. We measure each state’s fiscal health by looking at its credit ratings and outlook, its overall budget picture, and pension and retiree health-care obligations. Because of their own economic impact as well as the ripple effect, we consider the number of major corporations headquartered in each state.
Here, Minnesota’s ranking has fallen by 12 places since last year, from 6th to 18th.
This illustrates an argument we make often here at the Center. Minnesota is a wonderful state with many great advantages. These show up in measures like Quality of Life. It is a great place to live, after all. But it will not remain so without a strong economy.
John Phelan is an economist at the Center of the American Experiment.