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The best states for business
Lisa Nelson.jpg
Lisa B. Nelson

The states experienced a major upheaval of the economic success that preceded the pandemic this year, but, like clockwork, we have overcome one step at a time.

We didn’t get a free pass to fall behind, and neither did our state leaders. It is important now to hold our elected officials and ourselves accountable for the sake of the years to come. 

Businesses did not take a free pass either. They are open, and they are eager to succeed. To hold states accountable to improve pro-business environments means more jobs and a smoother recovery for the nearly 14 million Americans currently unemployed. And this month Area Development released its state ranking of top states for doing business in 2020. Publications, rankings and analyses are more important than ever before because they tell us, the voters, how our state or state leaders are stacking up, and who we should be taking cues from. 

At the top of the list is Georgia - its seventh consecutive win - followed by Tennessee, South Carolina, Texas and North Carolina, respectively. In fact, every state in the ranking’s top ten is in the South aside from the 7th, Indiana. But separate from a clear geographical majority, the 13 variables used to rank the state’s pro-business environments included corporate tax structure, the state’s regulatory environment and state government cooperation and responsiveness. 

Similarly, organizations like the American Legislative Exchange Council release comprehensive reports annually to check in with how the states are doing in specific policy areas. Last month the 13th Edition of Rich States, Poor States released, which ranks the economic competitiveness of states using 15 equally weighted policy variables. Right-to-work, top marginal corporate income tax rate and state minimum wage are among them, and Area Development’s top 5 states are ranked in the upper half of these Rich States, Poor States variables. 

While Area Development makes a ranking to help states create a pro-business environment - which would no doubt help states identify steps to build business strong in the recovery unfolding before us - it’s also important to stay attuned to what priorities best serve the taxpayers in our states. 

Stronger business means more jobs, and more jobs mean more opportunity for Americans. Good economic policy is obviously a win for the residents of every state, and trends have shown people will flee the poor states to find success in those better-prepared states. We saw it this year with New York, and we will likely see it again.

Luckily, we also know the policy solutions that make up good economic policy thanks to the many publications, rankings and analysis that tell us how our states did. Even before the pandemic, when our economy was thriving, neglecting to make policy changes in the right direction was enough to fall behind. This is even more true today as we grapple with the fiscal shock of the global crisis.

That is why it is so important we stay informed, and we check in on our elected officials’ and our state leaders’ performances to make sure we’re making the right decisions as voters, taxpayers and community leaders. We should keep up with our state’s ranking in business, in economic competitiveness and how our governors are performing. These variables have proven to work, they are based on individual liberty and free enterprise and they lay the roadmap to success. 

We have the tools, it’s time to use them.


Nelson is the chief executive office of the American Legislative Exchange Council, an organization bringing state legislators and stakeholders together to develop public policy beneficial to the free market and individual liberty.