filed under Economics | Local Yokels
Busting Bogus Business Rankings
12:47AM ON
11/05/2009
BY
Dave Segal
Scott Wolf has a great column in the Projo, ripping up the absurd concern our state has for the Forbes and Tax Foundation business climate rankings, and our culture of pervasive pessimism:
Before we all give up on our state and move to high-ranked business climates such as South Dakota, Nevada or Wyoming, it is critical to understand the limitations of business-climate reports. That’s why I recently analyzed Census and Bureau of Labor Statistics data about all states, seeking to answer a basic question: What correlation exists between a state’s business-climate ranking and more concrete measures of economic performance such as per-capita income, and rates of poverty and unemployment?
To those convinced that Rhode Island’s low rankings should be our overriding economic-development focus, my findings might be jaw-dropping. For example, if a high business climate ranking alone were a sure ticket to economic success, why would Nevada, the 4th best business-climate state in America (according to the Tax Foundation), have the nation’s second-highest unemployment rate (even higher than Rhode Island’s), and why would the best business-climate state, South Dakota, have the 16th highest poverty rate, considerably worse than ours, and a per-capita income significantly lower than ours? And why would the states with the three worst ranked climates — New Jersey, New York and California — have respectively the 2nd, 4th and 7th highest per-capita incomes among the 50 states?
You think all the lies purveyed about quality of life in Rhode Island by the powers-that-be might hurt our business climate?
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