Missouri Drops in “Business Friendly State” Poll

Chief Executive magazine has a yearly poll of CEOs about which state they prefer doing business. For ten years in a row, Texas was in first place. 

Guess who was in last? Yep, California.  If you check the rankings below, you’ll find that all the so-called “blue states” are in the bottom: New York, Illinois, Massachusetts, Michigan and New Jersey.  These states are ranked as the the bottom five states.

1 Texas 1 0
2 Florida 3 1
3 North Carolina 2 -1
4 Tennessee 4 0
5 Indiana 6 1
6 Virginia 7 1
7 South Carolina 8 1
8 Georgia 5 -3
9 Utah 9 0
10 Arizona 13 3
11 Colorado 12 1
12 Nevada 10 -2
13 Louisiana 27 14
14 Delaware 16 2
15 North Dakota 21 6
16 Wyoming 14 -2
17 Oklahoma 11 -6
18 Idaho 19 1
19 South Dakota 15 -4
20 Wisconsin 24 4
21 Alabama 26 5
22 Iowa 22 0
23 Kansas 25 2
24 Missouri 23 -1
25 Kentucky 17 -8
26 New Hampshire 18 -8
27 Nebraska 20 -7
28 Montana 28 0
29 Arkansas 30 1
30 Mississippi 38 8
31 Alaska 31 0
32 Maine 36 4
33 New Mexico 32 -1
34 West Virginia 42 8
35 Ohio 41 6
36 Minnesota 29 -7
37 Washington 34 -3
38 Vermont 40 2
39 Rhode Island 35 -4
40 Maryland 37 -3
41 Hawaii 43 2
42 Oregon 33 -9
43 Pennsylvania 39 -4
44 Connecticut 44 0
45 New Jersey 47 2
46 Michigan 46 0
47 Massachusetts 45 -2
48 Illinois 48 0
49 New York 49 0
50 California 50 0
 — ChiefExecutive.Net

Missouri is smack in the middle of the poll at number 24.  But, if you look closely, that is a one-position drop from last year.

What did Missouri do to drop a position? I don’t know. If I had a suspect, I’d most likely choose: State Regulations.  What can we do to improve our position?  First I’d look at those states on the top like Texas, Florida, North Carolina, Tennessee, and (Surprise!) Indiana.

This year, 650 business leaders responded to our annual survey, up from 550 in 2011. CEOs were asked to grade states in which they do business among a variety of areas, including tax and regulation, quality of workforce and living environment. The Lone Star State was given high marks foremost for its business-friendly tax and regulatory environment. But its workforce quality, second only to Utah’s, is also highly regarded. — ChiefExecutive.Net

But what else do these states have in common? If you examine the twenty  top ranked states you’ll also discover that every one is a RIght-to-Work state. Missouri is not.

It may be no accident that most of the states in the top 20 are also right-to-work states, as labor force flexibility is highly sought after when a business seeks a location. Several economists, most notably Ohio State’s Richard Vedder and Harvard’s Robert Barro, have found that the economies in R-to-W areas grow faster than other states, have higher employment and attract more inward migration. Governor Scott Walker’s battle with the unions in Wisconsin (See “Will Wisconsin Rise Again?”), a state that edged into the top 20 this year for this first time, demonstrates that the struggle for a pro-growth agenda can be contentious. As one Badger State business leader remarked, “Finally, Wisconsin is headed in the right direction.” — ChiefExecutive.Net

Perhaps if we really wanted to improve our state ranking we should emulate Louisiana.  In the last year, Louisiana increased their ranking by 13 positions.

…Louisiana, is the Cinderella of business improvement. In 2006, it ranked 47th—where Massachusetts is today. And Katrina didn’t help matters. But since then it has climbed steadily up the ranks so that it is now 13th—up from 27th last year—the biggest leap in a single year of any state. “In Louisiana there is an active government push to reduce taxes and regulation and to encourage new industry to relocate to the state,” commented one chairman. “This was valuable for one of our companies, which decided to make the state our headquarters.” Other chiefs point to the big strides the state has made in workforce training and economic incentives. Its economic development office is also aggressive in luring disaffected businesses from the Northeast and California. — ChiefExecutive.net

There are many lessons to be learned in this poll.  Let’s all urge our state Representatives and state Senators to read this report. Let’s urge them to study it and the tactics used by the top ranking states to improve our position.

From my viewpoint, we can do two things. First, create and pass, over the Governor’s veto if necessary Right-to-Work legislation. Second, let’s examine our regulations and regulatory agencies and pare both. Let’s give business the freedom to do business in our state. If we do those two things, we will ALL prosper.

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