A survey of more than 700 corporate chief executives has produced a ranking of the Nation’s most business-friendly States, using a few basic criteria. Not surprisingly, the States that top the list have a lot in common.
Chief Executive magazine received responses from 736 American CEOs — “the highest response on record” in the survey’s nine-year history — on a series of questions framed by “metrics” that included taxation and regulation, quality of workforce and living environment. The abstract explains the significance of those three criteria:
In the minds of most leaders, a state’s friendliness is closely aligned with its tax and regulatory regime. Similarly, workforce quality also measures the perceived cooperativeness of workers with management, as well as the people’s general work ethic and education attainment. The living environment metric measures the perceived quality of education and public health facilities, as well as the affordability and quality of real estate, the transportation system and related environmental factors.
Texas finished at the top of the list, followed by Florida, North Carolina, Tennessee and Indiana.
California finished dead last, preceded by New York, Illinois, Massachusetts and New Jersey.
The Internet is filled with mentions that the top 10 States all have Republican Governors, while seven of the bottom 10 States are governed by Democrats. But the formula for fostering capitalism isn’t the intellectual property of one political party; it’s simply one more facet of the ongoing, fundamental disagreement between Republican and Democratic politicians over how most effectively to manipulate public opinion to their benefit.
To no one’s surprise, it turns out that Republicans are generally winning that argument when it comes to commerce, because when you reward ambitious people who possess the resolve to risk their own capital, you often please both business owners and the people whom they hire.
That’s nothing new; the survey has continually revealed an unchanging pattern among States regarded as business-friendly, as well as those that aren’t. That many States’ rankings change little, or not at all, from year to year further indicates the proven consistency of what works and what doesn’t in the top- and bottom-ranked States’ policies. Each of the top five business-friendly States were ranked in exactly the same spot in last year’s survey, and only one of the bottom five (New Jersey) shifted its rank (sliding from 45 to 46) over the same period.
The CEOs quoted in the abstract say it best:
‘[A] good state is one that understands the private sector pays for the public sector and makes it easy for the private sector to conduct business and grow,’ remarks David N. Willis, CEO of CRW Parts, a Baltimore wholesale distribution firm. ‘California, New York and Illinois have high costs of living, high taxes and high regulation,’ says Mark Larsen, CEO of Maxxcap Group, a mid-size financial services firm. Additionally, each of these states makes it difficult, and often worse, than other places to do business. By contrast, ‘states like Texas and Ohio are consistently trying to help us grow our business and are listening to the leaders of companies to help solve problems,’ says Toledo-based Impact Products CEO Terry Neal.