CNBC’s business rankings: Some strong cards and some bluff
Minnesotans might have been surprised yesterday to see headlines such as “Minnesota ranks No. 5 among ‘America’s Top States for Business’ by CNBC,” “Minnesota knocks Texas out of Top 5 in CNBC’s ‘Top States for Business’ ranking,” “Minnesota ranked as a top state for businesses, surpasses Texas,” “CNBC Ranks Minnesota 5th Best State for Business,” “Minnesota ranked as a top state for businesses,” and “Minnesota named a Top 5 state for business.”
These reports refer to CNBC’s annual “America’s Top States for Business” ranking where our state does, indeed, rank 5th out of 50. This is derived from scores for ten subindices. Out of these, Minnesota ranks in the top ten in three; “Infrastructure” (3), “Life, Health & Inclusion” (4), and “Tech & Innovation” (4).
How are these scores derived? For that we can turn to the methodology. For Infrastructure and Tech & Innovation the methodology is reasonably sound.
But 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.
Our state has some strong economic cards to play and this ranking does a fair job of laying them out. But it also tries a little bit of bluff. As interesting as these rankings are, they are no substitute for actual data: where are businesses going? Where are people going? Where are incomes rising? Those data are what really matters.