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“In the 1980s, ‘economic development’ was frequently viewed as primarily about companies. This outlook was further popularized by the many tools available that compared states’ ‘business friendliness.’ While these ratings captured some important points, they often emphasized ‘low cost’ instead of ‘high value.’ The cheapest locations—those with low taxes and wages—got the best grades. These tools encouraged policies to weaken regulation, even if that regulation protected things like the environment and worker safety. An area’s good business rating could be damaged if workers were paid wages and provided benefits that were sufficient for their needs, even when public incentives were provided to their employers.”
While the two rating schemes often disagree, they don’t seem radically out of line with each other. CFED’s only straight-A states, Delaware and Connecticut, were ranked 8th and 28th by Forbes. Forbes.com’s favorite state, Virginia, got straight Bs from CFED; Forbes.com’s least favorite state, Louisiana, got two Fs and a C from CFED.
