Recently, Chief Executive Magazine released their “Best States for Business 2012” which is based on a survey of 650 business leaders on questions such as tax and regulation, quality of workforce, and living environment.
Unfortunately, New Hampshire’s sterling reputation among the nation’s top business leaders is beginning to tarnish. In 2012, New Hampshire fell by 8 spots to land at number 26. More troubling, New Hampshire has been one of the largest losers since 2008 dropping 12 spots.
So the question is why? Looking more closely at the survey points to the culprit–not being a right-to-work state. In fact, one of the CEO comments on New Hampshire had this to say about right-to-work:
“New Hampshire is coming on strong. If they can ever institute “right-to-work” legislation, they could rise to number one.”
Additionally, this is what they had to say about right-to-work in general:
North Carolina, Tennessee, Indiana, Virginia, South Carolina, Georgia and Utah held their positions in the top 10, with Indiana moving up a notch to fifth. CEOs indicate that workforce quality is the state’s single greatest strength, and since it became the 23rd right-to-work state last year, the Hoosier State is likely to punch above its weight competitively in the future. “Indiana is like a breath of fresh air,” volunteered one manufacturing CEO. “I have operated on both coasts, the Southeast and Chicago, and Indiana is where I will keep my manufacturing operations.”
It may be no accident that most of the states in the top 20 are also right-to-work states, as labor force flexibility is highly sought after when a business seeks a location. Several economists, most notably Ohio State’s Richard Vedder and Harvard’s Robert Barro, have found that the economies in R-to-W areas grow faster than other states, have higher employment and attract more inward migration.
Speaking of Indiana, here is what one CEO had to say about their recent adoption of right-to-work:
“Indiana is centrally located, has a balanced budget and excess reserves on hand, is a low overall tax environment, is business friendly and is now a right to work state. If you want to locate in the Midwest, there is no other state in its class.”
So there you have it. New Hampshire does have a good business climate, but failing to enact right-to-work is causing us to slip-slide down the list. After all, 23 states now have right-to-work and it will be difficult, if not impossible, to ever reach the upper echelons of this CEO survey without it.