How crazy is CNBC’s ‘Top States for Business’ ranking this year?

It’s that time of year again when CNBC pulls out of who-knows-where some ranking which purports to show Minnesota’s economy going gangbusters.

The release of CNBC’s ‘Top States for Business’ rankings used to be a red-letter day for Minnesota’s media and politicians. Last year, however, celebrations were somewhat muted as CNBC revealed that our state had tumbled four places to 10th. This year, however, we have come roaring back with a stonking 5th place finish.

Should we take any of this seriously? No.

One should be wary of a ranking system which permits rankings to whiplash around as CNBC’s do. Wyoming has jumped eleven places in one year, Arkansas thirteen, while Nebraska has fallen by eleven and Colorado by fourteen. Economies don’t tend to change so quickly.

What we are capturing here is not so much any change in the fundamentals of these state’s economies, or whether they are actually good or bad states for business, but the effects of CNBC’s ever changing methodology.

“Our study is not an opinion survey,” we are told. “We gather empirical data on the states’ performance in each metric using the most recent figures available.”

But how can we square this with their ‘Quality of Life’ measure — which, incredibly for a ‘Top States for Business’ ranking carries more weight than ‘Cost of Doing Business,’ ‘Technology & Innovation,’ ‘Business Friendliness,’ or ‘Access to Capital’ — in which:

We look at worker protections, including livable wage policies, paid leave, and rights to organize. We look at inclusiveness in state laws, including protections against discrimination of all kinds, as well as voting rights and secure election systems. And with surveys showing a sizeable percentage of younger workers would not live in a state that bans abortion, we factor reproductive rights in this category as well. 

This is just a wish list of “progressive” policies which, we are told, make a state better for business.

The proof of the ranking is in the data. If it is, indeed, accurately identifying which states are best for business, we would expect a ranking of “Top States for Business” to be somewhat correlated with things that businesses actually do.

The Bureau of Labor Statistics’ (BLS) ‘Quarterly Census of Employment and Wages’ gives us data on the number of “establishments” (which it defines as “a single physical location where one predominant activity occurs”) and employment in each state.

Figure 1 shows that there is no discernible relationship between a state’s ranking on CNBC’s 2025 ‘Top States for Business’ and its establishment growth between the fourth quarter of 2024 and fourth quarter of 2025.

Figure 1: Relationship between CNBC ‘Top States for Business’ rankings and establishment growth

Likewise, Figure 2 shows that there is a slightly positive relationship between a state’s ranking on CNBC’s 2025 ‘Top States for Business’ and its employment growth between the average of the fourth quarter of 2024 and the average of the fourth quarter of 2025, but it isn’t statistically significant (the p-value is 0.25), which means that the observed patterns are likely due to random chance or normal sampling variability rather than a true underlying effect.

Figure 2: Relationship between CNBC ‘Top States for Business’ rankings and employment growth

Whatever it is that CNBC is measuring, it doesn’t seem to have very much to do with business.

Debunking the endless parade of silly rankings could be a full-time job and one is often tempted to let them slide. But, bogus as they generally are, they do matter. I have testified at the state capitol and offered hard economic facts such as:

• In every single year since 2014, per capita GDP has grown more slowly in Minnesota than for the United States generally, a record of underperformance matched only by Wisconsin. (Source)
• As recently as 2014, GDP was $4,700 per person higher than it was for the United States generally, or $18,800 for a family of four. In 2025, for the first time on record, GDP per capita in Minnesota was below the national average. (Source)
• In real terms, median household income in Minnesota has fallen by 6.4% since 2019, a worse performance than in 44 states. (Source)
• Real, per capita Personal Income has grown more slowly in Minnesota since 2018 than in 34 other states. (Source)
• The average earning Minnesotan handed over 4.9% of their 2025 wages to the state government, a higher share than in 43 out of 50 other states. (Source)
• Minnesota is one of just 16 states where the share of the average earner’s wages swallowed up by the state government in income tax has increased over the last decade. (Source)
• In 2025, Minnesota’s state government spent $6,098 per person, an amount higher than in 45 other states. (Source)
• Adjusted for inflation, Minnesota’s level of state government spending per person increased by 18.5% between 2019 and 2025. This was a greater increase than in 42 other states. (Source)
• Between 2020 and 2025, Minnesota suffered a net loss of residents to other parts of the United States which was worse than in 34 other states. (Source)
• Since 2019, our state has lost residents in every age category and every income category above $25,000 annually. (Source)

None of which sounds very much like a top state for business.

And, on occasion, these have been dismissed on the grounds that we scored really well in the CNBC rankings.

That is why they keep on coming. As I wrote some time ago:

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.

Given the relatively muted reception to the 2026 rankings, maybe that message is finally getting through.