Paul L. Caron

Tuesday, March 21, 2017

The Best And Worst States For Business: 90% Of The Top 10 Voted For Trump; 80% Of The Bottom 10 Voted For Clinton

Robert W. McGee (Fayetteville State University), The First McGee Annual Report on the Best and Worst States for Business:

This study is the first annual McGee Report on the best and worst states for business. The fifty states are ranked based on the extent to which they facilitate business creation and expansion. This study incorporated the data collected from five other studies, which included the examination of hundreds of variables. Utah was found to be the most business friendly state; California was least business friendly. States that voted Republican in the 2016 presidential election tended to be more business friendly than states that voted Democratic.

Top 10

Bottom 10

Scholarship, Tax | Permalink


The methodology of this study is complete and utter garbage. The only useful thing to learn from this is how improper use of numbers can be used to create misleading data. Two fatal flaws: 1. you cannot simply add different types of data together to obtain a meaningful result; 2. you cannot randomly select studies and add them together to get meaningful results. Using this kind of methodology I could prove anything I wanted. Say I want to prove California is the "best" state for business. I just find as many studies showing California is great for business (regardless of what factor they are measuring, could be employee satisfaction, taxes, traffic, or even weather) and I ignore any studies showing it isn't and then add the studies showing it is great together. Voila, California is the best state for business.

Posted by: acauthorn | Mar 27, 2017 9:28:07 AM

That's it, go to Colorado, not Wyoming. We have enough blue state denizens in Jackson and Laramie. There's only so much room for cancer so stay the hell out!

Posted by: phil morgan | Mar 23, 2017 7:07:35 AM

I have lived in three of the top ten, and, loved all three. I imagine the negative commentators on here have flown over these states, but, have no other experience otherwise.

Posted by: Jeff | Mar 23, 2017 7:03:02 AM

The fact that anyone would be interested in Trump's re-election, now that is hilarious.

Posted by: Anon | Mar 23, 2017 6:31:58 AM

the liberal comments on this board are hilarious

Posted by: Trump 2020 | Mar 23, 2017 1:34:05 AM

Yellowstone N. P. Now there's a real "'Red State' shithole." They don't plow the snow half the time. The crappy little schools all have bear fences around the playgrounds. The wolves eat unattended kids at the bus stops. Take your bear spray and a pistol to the outhouse at night. Trust me, Becky, you would hate it.

Posted by: Ron | Mar 22, 2017 2:53:00 PM

@ DLSherrill: What's the point of making a bunch of money just to have the state you are living in punish you with high taxes and freedom-destroying regulations. The realization of life, liberty and the pursuit of happiness is certainly NOT dependent on a big income.

Posted by: SirIzakNuton | Mar 22, 2017 11:31:54 AM

The Institute for Legal Reform rankings massively alter the rankings. It's the only reason Texas and Florida weren't ranked near the top. A lot of mediocre states got massive bumps due to good rankings from the ILR survey, which is almost entirely based on whether or not that state has chosen to hose the plaintiff's bar. I'm not entirely opposed to tort reform, but it's only of interest to a small subset of businesses.

Posted by: Jim W | Mar 22, 2017 11:14:32 AM

The report says it rank states “based on the extent to which they facilitate business creation and expansion.” I have not looked at its analysis and assume there could be arguments to be made against its methodology, but its thesis is not necessarily incompatible with California faring better under other metrics, like GSP per capita; i.e., it’s possible that there are a lot of established businesses in California, but that starting a new one or expanding one could be easier elsewhere.

Also, GSP per capita might be a good measure of something, but I’m not certain it’s a good comparator for the kind of debate that commenters seem to want to engage in. The states with the highest GSPs per capita loosely correspond to the states with the largest populations, which makes me think it might not be a good metric for comparing whether to open a new business in Utah or California, for example, if one was faced with that kind of choice.

The report makes a point about red states versus blue states, which seems to be a source of ire in the comments; but GSP per capita isn’t particularly helpful for that kind of comparison, as the top ten states for GSP per capita are a mixed bunch: 4 blue (California, New York, Illinois, New Jersey), 2 red (Texas, Georgia), and 4 arguably purple states that were red last election (Florida, Pennsylvania, Ohio, North Carolina).

I’m more or less thinking out loud, so I am happy to concede I could have something wrong.

Posted by: Curmudgeonly Ex-Clerk | Mar 22, 2017 10:34:18 AM

After reading some of the comments ... Which states lead in self congratulation?

Posted by: Joseph Hertzlinger | Mar 22, 2017 9:52:26 AM

For all of you who can find anyplace to live in the top 10 except Colorado, I say good. And if you stay in Denver/Boulder it will work out well for all normal people.

OTOH, you really should travel more. Moab, anyone?

Posted by: LAG | Mar 22, 2017 8:53:48 AM

Damn it, quit publishing these.
We want the clueless idiots in the bottom 10 states to stay where they are.

Posted by: Dave | Mar 22, 2017 8:16:06 AM

@ DLSherrill : As an Idahoan who sees first hand how dedicated this state is to business, and what an amazing place to live it is, I thank you for staying the hell away.

Posted by: Sage Grouch | Mar 22, 2017 8:10:35 AM

I've lived in four states, including two blue, one purple, and one red -- Tennessee. Tennessee is by far the best of the bunch.

Posted by: TheEE | Mar 22, 2017 7:38:07 AM

"early childhood care, good schools, parks and other recreational facilities, etc.?"

Bet not. California and New York have some of the worst schools in the country.

Posted by: Jimpithecus | Mar 22, 2017 5:34:24 AM

Unlike most here, I actually read the paper linked above. While I'll agree that "best for business" does not necessarily = "best for consumers", the criteria are laid out in some detail. The rankings in the McGee study were computed by adding the rankings of the other 5 studies, which include measures of consumer/worker well-being:

- Forbes rankings are determined by looking at 40 metrics on business costs, labor supply, regulatory environment, economic climate, growth prospects, and quality of life.
- Tax Foundation calculations include the corporate income tax, the individual income tax, the sales tax, the unemployment insurance tax and the property tax.
- Institute for Legal Reform ranks the states based on lawsuit climate.
- Cato Institute publishes an annual survey covering 230 policy variables divided into three main categories: fiscal, regulatory and personal freedom.

One thing noteworthy about both the top 10 and bottom 10 states for business: they all have low to medium poverty rates when compared to the national average, EXCEPT for California, where I happen to live, AND New York. The supplemental poverty measure (SPM) includes cost of living, tax burden, etc. and the U.S. as a whole scores about 15%. NY comes in at 18%, and CA is the poorest state by far with almost 25%, meaning 1/4 of its citizens can barely afford to live in the state. These two states also rank near the top on measures of income inequality. So there are other considerations before I'd ever generalize positively or negatively about any state in any study. If I were not gainfully employed, I'd have relocated out of CA long ago. GDP growth is great, and GDP per capita might sound impressive, but it's a meaningless measure because GDP isn't shared equally by all, working or not.

Posted by: MM | Mar 21, 2017 7:15:19 PM

CA worst place for business?????Then why does it have the greatest GNP? Do I really want to live in the top 10 states except for CO??????? It may be expensive and full of regulations but CA is still the Golden State..

Posted by: Sid | Mar 21, 2017 1:48:39 PM

Quote: "How about the top ten states for workers..."

Check the numbers and rankings. California does well if you're affluent and live on the coast. It is awful if you're anyone and anywhere else. For instance, California ranks 40th in schools. Utah, one of those you sneer at, ranks 18th.

It also has one of the largest gaps between rich and poor.

Posted by: Michael W. Perry | Mar 21, 2017 1:39:07 PM

That's some good parody, that.

Posted by: Unemployed Northeastern | Mar 21, 2017 1:30:00 PM

California, New York, and Illinois are all hostile to business, which is why they are economic wastelands ranked 1st, 3rd, and 5th in GDP.

Posted by: anon | Mar 21, 2017 11:34:14 AM

If by 'Top !0' you mean the states where businesses can commit any crime without fear of fine or punishment, then maybe you might have something, but 9 of the 10 'best' are all 'Red State' shitholes that have horrible education, poor environmental regulation and horrible ideology.

You can have them, I will remain in the barren wasteland that is Vermont. You have states scored by ideological idiots and you come up with an idiot's list.


Have a great day!

Posted by: Becky | Mar 21, 2017 10:23:00 AM

The 11 "best" states for business have a GDP/capita of $51,424.
The 10 "worst" states for business have a GDP/capita of $63,555.
How do you define "best" and "worst" again?

Posted by: Pargo | Mar 21, 2017 10:08:16 AM

California being #50 means these people are entirely divorced from reality.

Posted by: h | Mar 21, 2017 9:35:30 AM

"Chief Executive" is chief executive magazine. They were dinging the state, not me personally.

Posted by: Jerry Brown | Mar 21, 2017 9:25:39 AM

@ DLSherrill - From those of us who live in the deplorable states, we thank you for not moving to our states.

Posted by: Dale Spradling | Mar 21, 2017 8:56:58 AM

As for whether this is good for workers, you can compare unemployment rates by state While not mirrored, generally the ones best for business have lower unemployment rates and the ones worse for business, higher rates. As for worker protections, there are many federal laws that apply to all states, obviously.

Posted by: Skipp | Mar 21, 2017 8:27:17 AM

Yes, please nobody move to Idaho. It's horrible. Nothing there. go to colorado and California please. please.

Posted by: mtb | Mar 21, 2017 7:39:57 AM

How about the top ten states for workers in terms of health insurance coverage, workplace safety protections, protections against discrimination and retaliation in the workplace, early childhood care, good schools, parks and other recreational facilities, etc.? I can predict that the ranking would be inverted from this one (except, maybe for Louisiana and West Virginia, which probably would still be near the bottom).

Posted by: Andy Patterson | Mar 21, 2017 6:53:50 AM

North Carolina (Pat McCrory): #3 Governor in nation?
California (Jerry Brown): #50 Governor in nation?

LOL. Garbage in, garbage out.

Posted by: Anon | Mar 21, 2017 6:31:42 AM

Besides Colorado, who would actually want to *live* in any of the top 10? Great, I can make a ton of money hustling the local rubes and then there's nowhere to spend it.

Posted by: DLSherrill | Mar 21, 2017 6:27:21 AM