CEOs agree with the data: Minnesota isn’t a ‘top state for business’

Gov. Walz is fond of touting the “fact” that Minnesota is one of the top five states for business. It isn’t.

This alleged “fact” comes from a ranking complied by CNBC. As I’ve explained previously:

…CNBC admits that “under this year’s methodology” the Life, Health and Inclusion subindex – which includes “anti-discrimination laws and worker protections” and “state abortion laws (as) a new metric” – “is increasingly important in a state’s overall ranking.” These rankings do not measure which state is best to do business in or which state is best to live in, they measure which states are most “liberal.”

As I noted elsewhere:

…when we look at Life, Health & Inclusion, we see that CNBC rates:

“…the states on livability factors like per capita crime rates, environmental quality, and health care. We look at worker protections. We look at inclusiveness in state laws, including protections against discrimination of all kinds, as well as voting rights, including accessible and secure election systems. With studies showing that childcare is one of the main obstacles to employees returning to the workforce, we consider the availability and affordability of qualified facilities. And with surveys showing a sizeable percentage of women considering reproductive rights in deciding where they are willing to live and work, we factor abortion laws into this category as well.”

Some of that is reasonable enough, but some of it seems like the author inserting value judgments into the process.

CNBC is not ranking states by how good they are for business but by how “liberal” their policies are and is then attempting to pass that off as a ranking of the business environment. It gives liberal governors, like ours, something to point to besides uncomfortable data.

And, outside partisans, people aren’t buying it. The Minneapolis/St. Paul Business Journal reports that:

CEOs aren’t happy doing business in Minnesota, at least according to a survey from Chief Executive magazine.

Published last week, Chief Executive’s list of 2024 Best & Worst States for Business ranked Minnesota near the bottom at No. 41. The result isn’t much different from last year when Minnesota ranked at No. 40. Over 500 CEOs and business owners were surveyed across the U.S.

Even more painful for the governor is this:

The top-ranked states were unchanged from last year – Texas at No.1 and Florida at No. 2. Chief Executive said many of the top 10 states – Tennessee, Arizona, North Carolina, Indiana, Georgia, Nevada, Utah and South Carolina – are usually popular with executives for their low corporate taxes.

The most unpopular states were California at No. 50, New York at No. 49, Illinois at No. 48, and New Jersey at No 47. All ranked similarly in 2023.

Neither are these CEOs blowing smoke: Data show that they are acting on these opinions. A while back, I asked “If Minnesota is such a great state for business, why aren’t businesses and employees acting like it?” A look at the data revealed that:

Despite its ranking of fifth as a “Top State for Business” in 2023, Census Bureau data show that, in 2022, the number of new business applications in Minnesota declined by 6.2%, 37th (tied with Alabama) out of the 50 states and District of Columbia. Data from the Bureau of Labor Statistics show that, in 2022, the number of jobs in Minnesota increased by 2.8%, 39th (tied with Kansas) out of the 50 states and District of Columbia. And estimates of capital stocks from the Center for Financial Development and Stability at Henan University show that, in 2021 (the most recent year for which we have data), capital per job in Minnesota fell by 1.9%, ranking 21st out of the 50 states and District of Columbia.

Simply put, CNBC’s ranking of “America’s Top States for Business” isn’t really correlated with what businesses actually do. 

Regarding the governor’s favored ranking, I wrote a while back that:

Data is rarely kind to the American left. The reason these rankings are created and trumpeted so loudly is that they give “progressives” something other than data to point to. Faced with relatively sluggish economies and population loss, they can point to rankings like CNBC’s for comfort. Public policy must not be based on such make believe.