Data show that Texas keeps beating Minnesota
Photo: Dave & Tina via Flickr (CC BY-NC-ND 2.0 DEED)
Last week, Governor Walz tweeted:
The governor is referencing CNBC’s notorious “America’s Top States for Business” rankings, where, in 2023, Minnesota did, indeed, beat Texas.
But this ranking was a fraud. As I wrote last August:
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.”
Indeed, when we look at what businesses actually do:
…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.
When we look at business formation and job creation Texas beats Minnesota. The most recent estimates for real GDP growth from the Bureau of Economic Analysis show that in the third quarter of 2023, Texas’ economy grew at an annualized rate of 7.7%, while Minnesota’s grew by 4.1%. Census Bureau data show that in the two most recent years for which we have data — 2020-2021 and 2022-2023 — 8,005 more people moved from Minnesota to Texas than moved the other way.
We would love it if Minnesota was beating Texas. Sadly, that is not the case on any sensible economic metric. CNBC’s ranking is, however, serving its intended purpose of giving those responsible for failing left wing policies a set of “alternative facts” to point to.