California gets mediocre marks for its business climate – The Mercury News

When evaluating the state's business climate in comparison with the remaining of the country, California is barely in the center.

The country's most business-friendly locations, in line with this scorecard, are states often hailed by leaders as having large, fast-growing economies: Utah, Florida, North Carolina, Texas and Arizona.

States at the underside of this rating include a number of the country's smallest economies – Hawaii, Louisiana, Alaska, New Mexico and Rhode Island.

Lessons learned

What do the Golden State's mediocre results tell us in regards to the business climate in California? Well, consider the grades – from worst to best – in these eight metrics that make up the rankings, statistics that clearly address bosses' concerns…

Tax Foundation: This tax regulator had the third-worst corporate tax record in California. Only New Jersey and New York ranked lower. After California got here Connecticut and Massachusetts.

Companies pay the least to governments in Wyoming, South Dakota, Alaska, Florida and Montana. Texas ranked thirteenth.

US News: The magazine's annual Best State to Live rankings include two monetary areas: the economy and the “opportunities.” California ranked fourth-worst in the typical of those two business scores, ahead of Louisiana, New York and Mississippi.

Idaho performed best, followed by Montana, New Hampshire, Utah and Vermont. The Golden State's rivals, Texas and Florida, were ranked twenty ninth and twenty fifth.

Rich states/poor states: This conservatively oriented economic report evaluates countries based on business climate and economic performance. California's average rating was ninth worst. The worst states in line with this calculation were Illinois, Vermont, Maryland, New York and Hawaii.

Tops? Utah, Idaho, Arizona, Texas and North Carolina. Florida was No. 7.

Forbes: When it got here to places to begin a business, this magazine's website ranked California thirty seventh.

The best places were North Dakota, Indiana, Arkansas, South Dakota and North Carolina. Worst? Vermont, New York, Washington, New Mexico and Florida. Texas was No. 32.

CNBC: The business news network's “Best State for Business” rating list – which somewhat mirrors my rating list – placed California at number 23.

No. 1 was Virginia, then North Carolina, Texas, Georgia and Florida. Ranked lowest? Hawaii, Mississippi, Alaska, Louisiana and Montana.

GDP: Despite all of the hurdles that California poses to the economy, economic growth stays robust. Over the past five years, California's economy ranked thirteenth in gross domestic product growth, essentially the most comprehensive measure of business performance.

The strongest growth occurred in Idaho, Florida, Nevada, Tennessee and Arizona. Texas ranked No. 7. The national laggards were North Dakota, Louisiana, Hawaii, Delaware and Illinois.

WalletHub: This rating of regional economic power placed California in fifth place, behind only Washington, Utah, Massachusetts and Texas. Florida was No. 7.

The weakest state economies were Mississippi, Hawaii, West Virginia, Arkansas and Louisiana.

Incl. 5000: For all of the noise about big-name corporations leaving, California's economic secret is its entrepreneurs' talent for starting latest businesses.

In Inc magazine's list of essentially the most successful small businesses for 2024, California ranks No. 1 within the variety of corporations. Then got here Texas, Florida, New York and Virginia.

The states with the fewest corporations honored among the many 5,000 were Alaska, West Virginia, North Dakota, New Mexico and Montana.

Conclusion

It's no secret that California policymakers don't align with corporate interests on many issues.

But the Golden State's political leaders might be getting an bizarre result for something they often brag about – the nation's largest economy by many measures.

Remember: weight doesn’t at all times rely on quality. Furthermore, historical patterns don’t at all times repeat themselves.

Yes, nothing is more polarizing than California's economic policy. This is confirmed by a unusual statistical measurement of consistency often called “standard deviation.”

When applied to every state's eight individual grades utilized in my scorecard, this geeky math shows that California's grades had the biggest variance. Next up were North Dakota, South Dakota, Montana and Arkansas, which received severely mixed reviews. Texas had the twenty fourth highest deviation and Florida had the ninth highest.

Conversely, the very best statistical agreement was present in three of the highest 4 business climate areas – North Carolina, Utah and Tennessee.

Politically speaking

Comparing these rankings to recent presidential elections suggests that “pro-business” was a compelling argument in 2024.

The states that supported Donald Trump's victory averaged No. 21 on the scorecard, in comparison with No. 33 for the states that supported Vice President Kamala Harris (minus the District of Columbia, which was not ranked on my scorecard).

Note that the six states that flipped in Trump's favor against Democrats in 2020 were in the course of the pack on my scorecard: Michigan (No. 18), Wisconsin (No. 22), Arizona (No. 23), Georgia ( No. 24), Pennsylvania (No. 32) and Nevada (No. 38).

Originally published:

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