Interesting Peter Luke column for Bridge on the conundrum of Michigan, despite enacting two big business tax cuts and right to work legislation, ranking near the bottom in a survey of more than 700 corporate CEOs according to Chief Executive Magazine. (You can find their rankings here.)
Luke explores the contrast between Michigan’s ranking of 44th compared to Indiana’s 5th. Even though the two states now have very similar business climate policies and on most metrics Michigan has somewhat better results. Why this perception gap exists is interesting, but certainly not the most important question. Far more important is why do we think business cost rankings matter and why do we continue to want to compete with Indiana.
If you care about more and better jobs –– Governor Snyder’s goal for Michigan’s economy –– you want a Michigan that looks far more like Minnesota than Indiana. Minnesota with the best economic outcomes in the Great Lakes –– both more jobs and higher incomes –– is ranked 30th in this CEO survey. (Connecticut and Massachusetts –– the two most prosperous states –– are ranked even lower at 45 and 47.)
As we explored previously on every important economic metric Minnesota has far better outcomes that Indiana. And rank far worse on every major business climate ranking. Minnesota’s May unemployment rate is 5.3%, Indiana’s is 8.3%. And Minnesota’s per capita income is about $9,000 higher than Indiana’s. Which would you rather have, far lower unemployment and $9,000 more per person in your household or a better Chief Executive magazine business climate ranking? The answer is obvious. What isn’t obvious is why our elected officials are aggressively pursuing an agenda to make Michigan’s policy look like Indiana’s not Minnesota’s. What we do know is that you aren’t going to get Minnesota’s economy by pursuing Indiana’s policies.
