Thursday, December 13, 2012
Westward, Ho! for Hot Business Climate
Yet another list.
This being the season of Christmastide, perhaps lists are part of our culture's traditional observances, what with being naughty or nice, or informing loved ones of desired gifts - two lists having become immortalized in how we celebrate Christ's birth.
Like many business magazines, Forbes loves lists, and it's just published its latest list of America's "Best States for Business and Careers." Actually, this list is a compilation of lists, such as business costs, growth prospects, and quality of life. Forbes ranked each state by six metrics, and then combined the results of those rankings to create their listing of America's most business-friendly states.
At the top of the overall list this year is Utah, home to Mormons and lots of other ultra-conservative folks. A friend of my aunt's from New York City works for a big, "too-big-to-fail" bank, and was promoted to a high-level job in Utah, which confounded his family. Apparently, New York's legacy banks are relocating massive amounts of their operations out of the Big Apple to Utah, which must be a culture shock for not only the natives out West, but the former city dwellers. Although this bank covered all the costs of moving my aunt's friends out there, and gives him a wonderful salary that affords them the equivalent of an estate back East, they feel like fish out of water. One wonders what all those Mormons think about the transplanted New Yawkers in their previously pristine midst, too.
At the bottom of Forbes' list is Maine, my Mom's home state, and home to some of the most beautiful scenery on our planet. How do I know that? Because people who've traveled the world and lived all over the place tend to choose Maine as either their retirement home, or at least their summer home. Even though all four of its seasons can hold nasty surprises, a beautiful day in Maine can more than make up for the state's many other foul-weather days. Its air is tinged not with pollution, but either salt (near the ocean) or pine (inland). The state has only one expressway, and most towns can still count their traffic lights on one hand.
Yet, most of what makes Maine a great place to visit and live also gives it its notoriously bad business climate. Maine has never boasted a robust economy; mostly all its ever done is hobble along with Yankee ingenuity, back-breaking work, and just enough income for its hardy natives to survive, but not thrive. All of the wealthy folks "from away" who can afford to choose to live in Maine drive up real estate values, but they don't bring their companies to set up shop in Maine and hire natives. The state is plagued by high energy costs, rocky soils, brutal winter weather, remote geography, and crippling environmental laws enacted to combat some reckless business practices back when logging, farming, and fishing were decidedly non-sustainable pursuits.
It's not even like Maine's newer residents today want the state to be an economic powerhouse. Many affluent retirees and summer residents don't want new development that risks changing the scenery and landscapes for which they've moved there to enjoy. Rustic buildings, sleepy villages, tranquil shorelines, and winding roads also attract tourists, which is just about the only industry Maine has. A bird in the hand is worth two in the bush, as they say, and bringing in office parks, light industrial factories, and warehouses would make Maine look just like everyplace from which tourists come to Maine to escape.
Indeed, when it comes to "quality of life," although that's an ambiguous term if there ever was one, most people can agree that what makes Maine worth living in - if you can afford it - are the things that help make it remarkable. Since we're doing lists, this one's easy: stunning scenery, miles of ocean coastline, plenty of freshwater lakes, plenty of pristine woods, an absurdly low crime rate, relatively good public schools, remarkable access to world-class art and culture, and highly participatory small-town governance... How's all that for some quality of life?
In fact, when it comes to quality of life, Forbes ranks Maine at #17, which is a pretty solid ranking, considering its business metrics are what's dragging the state down in its overall score. For the record, Massachusetts ranks #1 for quality of life, while it ranks 49th (!) in the cost of doing business, and #17 overall. Massachusetts, remember, has prodigious technology and healthcare sectors fueled by some of the best universities in the world. Not surprisingly, Hawaii, way out there by itself in the vast Pacific, has the worst cost of doing business, while South Dakota is the cheapest place to run a business.
Probably because they can't pay people to move to there - even though it shares its low costs with frigid North Dakota, third in both Forbes' overall ranking, and in the cost of doing business.
Texas is only frigid in its northern counties, and even then, for only a few weeks out of the year. The rest of the time, our Lone Star State can get blisteringly hot, and Forbes pegs the state's economic climate towards the top of its chart. Another poll by Chief Executive magazine found that business leaders consider Texas to be the best place to run a business, but overall, Forbes is a bit less bullish, ranking it at #7.
For those of us who live here, it's no surprise to see that Texas' being still ranked in the top 10 comes entirely from its pro-business climate; it's no coincidence that Forbes thinks our quality of life only ranks at #33. Spend any time here, and depending on what qualities you want for your life, you might think that ranking is being generous! On the other hand, if you love swimming pools, professional sports, college sports, high school sports, driving, and fossil fuels, then you'll wonder what all this fuss is about.
Of course, our relatively low cost of living here in Texas is what sells most of us on the place, even if the scenery - cultural, and otherwise - is a bit parched. Speaking of the cost of living, however, Texas' arch-rival in the corporate race, increasingly unaffordable New York State, fared far better in Forbes' ranking than it did in the tally of business executives earlier this year. Chief Executive magazine put New York at #49 in its poll, but Forbes only went as low as #23. One big factor helping out the Empire State with Forbes was, again, the quality of life index, which Forbes pegged at #11, three times higher than Texas'.
California was pretty much slammed by both magazines, with Chief Executive putting it dead last, and Forbes at #41, in its bottom ten.
So, what does all of this mean, if anything?
At least we can say beauty really is in the eye of the beholder. Business folks don't see much economic value in places like California, New Mexico, Vermont, Hawaii, and Maine, since all these states are in the bottom ten of Forbes' list. But plenty of the rest of us think these states hold some of the world's most iconic scenery, even if you can't get a job there.
And the top ten states Forbes finds best for business? Not exactly beauty pageant winners, are they? Utah and Colorado are probably the only ones most people would consider scenic or beautiful. And that's only if you really like mountains and snow.
Surprisingly, some of the states that have been the most maligned in our pop culture for being overly taxed and regulated - "taxachusetts," anyone? - actually fall somewhere in the middle when Forbes crunches the numbers. Massachusetts at #17, Minnesota at #20, New York at #23, Pennsylvania at #30, and Ohio at #33 manage to escape the ignominy of even being close to the bottom ten. And if it helps New Jersey to think its ranking at #36 is better than being in that bottom ten, then go for it, you's guys.
Meanwhile, statistics that will comprise the data Forbes will use for their next, updated listing of business-friendly states have already started to be created. Most lists are only current up until they've been made, aren't they?
Maine doesn't have much of a chance to leave their anchor berth at the bottom of the pile, especially considering how they've held that spot for three straight years. It's a tough place to make money, even if it's an easy state in which to spend it.
California did manage to win a #1 ranking from Forbes in terms of its potential for economic growth, but maybe that's more because it has the worst record of lost opportunities, and a proven inability to capitalize on its ideal climate, burgeoning population, and globally dominant technology sector.
Maybe your family and your employer won't change where you live and work solely because of this ranking of our states. In fact, since lists like these are in a constant state of flux, it's unwise to peg too much of the future on them. This list mostly shows how states are trending, and which ones are "naughty" in terms of their business climate, or "nice."
But for Texas, Colorado, North Dakota, and Utah, according to the trends, their futures looks the brightest, since their current ranking and their economic growth prospects both score within the top ten.