Politics from the Palouse to Puget Sound

Friday, July 27, 2007

"Washington Ranks as the Fifth Best State for Business?"

Dino Rossi's Forward Washington Foundation e-newsletter had a great rebuttal to Queen Christine taking undeserved credit for a recent Forbes magazine ranking that had Washington as the fifth best state for business:
As you may have heard, Forbes magazine recently ranked Washington as the fifth best state for business, up from last year's ranking of twelfth. With record profits being recorded by Boeing, Starbucks, Microsoft, and the like, how could anyone argue? If you dig a little deeper, though, some interesting facts emerge.

A more fitting title for the article would be "The Fifth Best State for Big Business." The Forward Washington Foundation is headquartered in Bellevue, a short distance from Microsoft. As such, we see evidence of its success every day in the form of traffic congestion on SR-520 as all those programmers head off to work. All of us, of course, use the products of Washington-based companies every day. Perhaps you saw a Boeing plane fly overhead as you stopped by the local Starbucks on your way to work where you booted up your Windows-based computer that was purchased at Costco. This typical morning is repeated all over the country, and we should all be proud that these companies are headquartered in our great state.

However, a closer examination of the factors that went into Forbes' determination that Washington state is a great place for big business reveals that it is still not a good place for small- and medium-sized businesses. For example, in the Forbes survey, Washington is ranked 33rd in the "Business Costs" category, which is an index based on "the cost of labor, energy and taxes." Other studies have ranked Washington the 14th most expensive state in which to do business and last of all states in small business survival.

Curiously, Washington ranks 32nd in Forbes' "Quality of Life" category, behind such lovely states as Ohio, New Jersey and South Dakota. This ranking was determined by an index based on "schools, health, crime, cost of living and poverty rates." It would be interesting to determine how exactly New Jersey beats Washington in any of those categories, but, for now, we'll have to take their word for it.

The point is that the Forbes ranking, while showcasing some of our state's greatest big companies, neglects to mention the problems facing the vast majority of business owners here. Big businesses may be the backbone of our state, but small businesses are still the lifeblood, and their needs are not being addressed by those in Olympia. If the ranking was of the best states for small business, it's a sure bet we would be ranked far lower.

As Richard Davis of the Association of Washington Businesses stated in a recent op-ed about the Forbes ranking, "even the generally glowing report suggests lingering competitiveness concerns for our state, particularly in costs and regulation. With paid family leave, climate change initiatives, a dramatic rise in state spending, and new health care regulation, the last session of the Legislature has put our desirable ranking at risk."

We couldn't have said it better, Richard.
I have made similar points before when rebutting Caitlin Ross' contention that Washington is "business friendly." here and here. I'll bet these are some of the studies referenced by Dino.

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