What should Oregon strive for when it comes to economic policy? According to Gov. Tina Kotek’s recently released Prosperity Roadmap, a key goal should be for Oregon to be among the top 10 states in the CNBC America’s Top States for Business index, which purports to rank the business climate of the states.
The choice of this goal is unfortunate. Not only are the CNBC rankings irrelevant in terms of reflecting the well-being of a state’s population, the stated goal could also serve as a pretext for giving corporate lobbyists what they’re always after: tax cuts.
What’s so special about the CNBC index that it should guide Oregon economic policy? Nothing really. Rankings of this type have been around for a while; they are a dime a dozen. Oregon does better in some, worse in others.
While state business rankings are good clickbait, their reflection of reality is highly questionable. Critics note that measuring a state’s “business climate” makes little sense, as there is a great deal of variability in how different industries and businesses fare within a state’s tax and regulatory system. The differing results of the various indices, moreover, show the lack of agreement on what matters to businesses. Ultimately, the results of any one index reflect the biases of the entity that developed the index. For instance, if taxes on corporations and the rich are deemed bad, that assumption gets reflected in the rankings.
But given that Kotek has chosen the CNBC rankings as the ultimate standard, it bears considering the results of that index.
Coming in at No. 1 is North Carolina. Like Oregon, North Carolina is a beautiful state full of people working hard to take care of their families. The Tar Heel State, however, is hardly a model of a thriving state.
The CNBC rankings fail to reflect the “lives of North Carolinians,” one CEO and resident of North Carolina observed. “If folks at CNBC had measured outcomes, they would have seen that our state trails most of the US on almost every key measure of economic health and quality of life” — measures such as median household income, pre-K enrollment, child poverty, among others.
Similar observations can be made of other states on CNBC’s top 10 list. For instance,
- Only one state has a higher life expectancy than Oregon. All but two states on the list are in the bottom half in terms of how long their residents live, perhaps the best indicator of the health and well-being of a population.
- Five of the 10 states have a minimum wage of $7.25. All top 10 states trail Oregon when it comes to setting a wage floor that protects the lowest-paid workers.
- Only one state has a higher level of health insurance coverage than Oregon. Two of the top 10 states have the lowest levels of health coverage in the nation.
- Compared to Oregon, all but one state on the list have tax systems that weigh more heavily on the poor than on the rich.
None of this is to suggest that everything is roses in the Beaver State. Like all across the country, Oregon suffers from widespread economic insecurity and vast economic inequality. But what it shows is that a top spot on the CNBC rankings is nothing to aspire to, if the point is to improve the lives of Oregonians.
If North Carolina is not a model of a state with a population truly thriving, what’s it an example of? It’s an example of trickle-down economics on steroids. For over a decade, lawmakers there have been slashing taxes on the rich and corporations, shrinking available resources to fund essential services. As one analyst put it, “The tax breaks that are making big corporations and the ultra-rich richer are also making the rest of us sicker, less connected to opportunity, and poorer.”
That drive to cut taxes on the rich and corporations is likely part of the reason why North Carolina comes out on top of the CNBC index. While its published methodology is superficial, “tax climate” is a factor in the rankings.
Tax cuts are explicitly part of Kotek’s roadmap. And although the document doesn’t specify tax cuts for whom, her recent efforts to pressure Multnomah County to reduce its tax surcharge on high-income earners and her creation of a Prosperity Council composed almost entirely of corporate leaders read like signposts for what lies ahead.
The bottom line is that the governor’s goal of landing Oregon on the top 10 of the CNBC list is misguided, signaling another walk down the failed path of trickle-down economics. What Oregonians need instead is a plan that puts their economic security and well-being at the top of the agenda.
Juan Carlos Ordóñez is the communications director of the Oregon Center for Public Policy, as well as the host of the podcast Policy for the People. Outside of work, Juan Carlos likes to spend time tending to his garden. This guest commentary is from news partner Oregon Capital Chronicle, and it may or may not reflect the views of The Corvallis Advocate, or its management, staff, supporters and advertisers.
Do you have a story for The Advocate? Email editor@corvallisadvocate.com