State rankings, like the one released Wednesday that put Rhode Island at 50 out of 50 for “business climate,” are essentially meaningless, and simply tools used by pro-business extremists to force local government to reduce taxes for businesses and to make it easier to exploit workers.
The Economic Progress Institute released the following statement that puts the CNBC report into context:
“Today’s release of CNBC’s ‘2019 America’s Top States for Business‘ reminds us once again of the unreliability of such efforts to rank states for business-friendly environments. The CNBC report measures something, though exactly what remains unclear.
“Despite distributing 2,500 points over ten areas, the ranking fails to measure actual business activity, such as the opening and closing of businesses. This year’s ranking of Rhode Island is suspect if only because CNBC grades the state with a D+ for Quality of Life. One of the state’s top grades is for Education.
“The CNBC report figures as one among five or six such rankings, include that of the Tax Foundation. Just within this group of reports, the rankings vary wildly. For example, the CNBC rankings place Virginia in the number one spot, whereas the Tax Foundation’s 2019 report ranks that state at 35. Yet, the Tax Foundation rates Alaska as tied for first place, while the CNBC report places Alaska at 47 out of 50.
“Because such reports rank not business activity, but instead an arbitrarily defined “business climate,” they are more tools for business organizations to advocate for lower corporate taxes than to tell us what business owners actually seek and do. Those individuals starting and growing businesses take many factors into account, and different businesses have varied needs. There is no evidence that the CNBC or similar rankings or the factors they weigh most heavily play significant roles in such decisions by actual business owners.
RHODE ISLAND DROPS to 50th in CNBC Business Rankings in 2019 – https://t.co/E2oSgx3uwU …— RI Center for Freedom⚓️ (@RICenterFreedom) July 10, 2019
DEAD LAST … and our political class did nothing this session to address this massive problem!
- Why Rhode Island is the worst state for business in 2019
- RI back to dead last in CNBC’s annual state rankings
- ProJo printed the facts about state rankings yet still peddles Tax Foundation propaganda
- R.I. drops back to the bottom of CNBC’s business climate ranking
- CNBC Ranks RI Last In Scorecard On Best States For Business
- Rhode Island and Business Rankings – State Has Been Stuck for More than a Decade
- Raimondo Refuses to Comment on RI’s 50th CNBC Ranking, But Others Have a Lot to Say
“The report Grading Places: What Do the Business Climate Rankings Really Tell Us?, produced by the organization Good Jobs First, handily discredits such business climate rankings.
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“The website Grading the States provides insight into the specific CNBC rankings. As this website points out, CNBC does not share any of the statistics they use nor how they are weighted or scaled, making the ranking non-transparent.
“‘The CNBC ranking is based partly on underlying factors thought to contribute to growth (such as the education level of the workforce, or the quality of roads and bridges), and partly on measures of actual state performance (such as measures of economic growth or rates of new business formation). This makes it difficult to understand the meaning of the ranking.’
“As the review concludes, ‘In other words, it is not a useful predictive measure since the outcomes it would predict are, in circular fashion, part of the index.’
“Investing in job training and education will do more to attract and grow businesses in Rhode Island than will competing to score better on these mysterious rankings.”
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