NC scorned on ‘Best and Worst States to Work’ report, ranking 41st

RALEIGH – North Carolina, the nation’s ninth largest state in population, ranks a lowly No. 41 on a new list of Best and Worst States to Work in America. That’s quite a contrast to CNBC’s “Best State for Business,” the list North Carolina topped earlier this year as well as in 2022 and is cited repeatedly by the Governor’s office and economic developers. So why the low ranking?

One big reason appears to be unions – or lack thereof. Another: state GDP growth, but the report may be underestimating N.C.’s performance, says a UNC-CH economist.

The study, released by Peak Sales Recruiting, used data from the Census Bureau, BLS, Bureau of Economic Analysis, MIT, and the Tax Foundation. Eight metrics were analyzed — job and GDP growth, union representation, taxes, weekly hours worked, commute times, remote work, and wages.

Oregon took the No. 1 spot, while Mississippi hit the bottom of the list at No. 51.

TechWire spoke with Dr. Gerald Cohen, Chief Economist at UNC’s Kenan Institute, about the ranking. Cohen shared that he was “struck by the dichotomy” between this listing and the CNBC analysis.

Here’s how North Carolina ranked on these metrics, compared to the best and worst states:

Job growth rate: 2.2% (Oregon: 2.2%; Mississippi: 0.5%; US median: 1.6%)
GDP growth rate: 1% (Oregon: 3.8%; Mississippi: 1.7%; US median: 1.7%)
Workers represented by a union: 3.9% (Oregon: 16.9%; Mississippi: 7.2%; US median: 10.3%)
Average weekly work: 39.2 hours (Oregon: 37.8 hours; Mississippi: 39.7 hours; US median: 38.8 hours)
Average commute: 25.1 minutes (Oregon: 22.8 minutes; Mississippi: 25.5 minutes; US median: 25 minutes)
Working from home: 16.8% (Oregon: 19%; Mississippi: 5.5%; US median: 13.4%)
Average sales and local tax rate: 7% (Oregon: 0%; Mississippi: 7.06%; US median: 7%)
Earnings ratio [This tracks the median wage against the living wage for a family of four, offering insight into the affordability of a state]: 1.32 (Oregon: 1.3; Mississippi: 1.08; US median: 1.4)

Second-lowest in union representation

Cohen noted that, while Peak Sales Recruiting does not specify its methodology, the ranking seemed to focus heavily on unionization.

The US median for union representation was 10.3, according to the study. The bottom states include South Carolina (2%), North Carolina (3.9%), South Dakota (4.2%), Virginia (4.5%), and Texas (5.1%).

From the Best States to Work in America study released by Peak Sales Recruiting

Cohen also noted that the Peak Sales Recruiting study references some older data (specifically 2022 GDP and job growth data) and reviewed sales tax rates rather than looking at the total state and local tax burden.

“Since Oregon has a much higher income tax rate, the total tax burden is 10.8% vs. NC at 9.9%,” said Cohen. (The study listed Oregon’s tax rate as 0%.)

Looking at microeconomic data — The American Growth Project initiative

Cohen shared that most people don’t move to a specific state but, rather, to a city or town within that state. That’s why the Kenan Institute created the American Growth Project initiative, Cohen says, measuring “local economic activity and the drivers of that activity in near-real time.”

Bah humbug: Triangle jobs picture looking grim through end of year

(The American Growth Project initiative analyzes the country’s microeconomic data — focusing on more than 100 distinct economies, sharing a more specific look at insights and growth hotspots within and across the states.)

“Our latest estimates for 2023 suggest that the Triangle is expected to grow 3.0% in 2023, the fifth fastest growing city in the nation (third in the large city category) while Portland is anticipated at 2.2% (14th overall and 9th in the large city category),” Cohen told TechWire over email. “Meanwhile, Charlotte at 2.1% is 17th (10th in large city right behind Portland). The downside is that NC also has some of the slowest-growing regions (the Triad and Hickory).”