By in Rhode Island’s Future
From the headlines, you
would think that CNBC is the gold standard economic
authority. After the cable news network released its 10th annual “America’s Top States for
Business 2016” listing, in which Rhode Island was ranked
dead last, local corporate media raced to bring the bad news to readers and
viewers.
CNBC ranks R.I. worst state for business, CNBC: Rhode Island ranked ‘Bottom State for Business‘, and RI back to dead last in new CNBC rankings are typical examples from the Projo,
Channel 10 and Channel 12 respectively.
Missing from the
Cassandra-like coverage is any hint that the rankings are meaningless and based
on metrics that rate our state on how well our policies kowtow to the whims of
business, not on how well they benefit the poor and middle class.
Only Ted Nesi even
approaches this angle in his coverage, but he did so through the lens of
competing political discourse.
But what about the economics of the report? Does
it hold up under scrutiny? I’ve tackled the subject of economic rankings
before, here and here, trying to bring some sort of
real economic analysis to bear.
I asked Doctor of Economics Douglas Hall, Director of Economic and Fiscal Policy at the Economic Progress Institute, for some insights.
Hall said that many of CNBC’s economic indicators “have a lot of
merit and point to the need to address matters via public policy, such as
repairing the state’s crumbling infrastructure and the need to help Rhode
Islanders improve their educational attainment. But when you deconstruct their
aggregate groupings,” said Hall, “many of the categories are deeply flawed and
point to policies that would severely undermine the well-being and quality of
life of working families in Rhode Island.”
One indicator the report
uses is “union membership and the states’ right to work laws.”
Low union
membership and strong anti-union right to work laws contribute to a higher
economic ranking for a state in CNBC’s report, yet Hall says that “research
clearly shows that as unionization rates have gone down, the well-being of the
American middle class has gone down.” In Hall’s view, this metric “taints the
entire aggregate measure.”
Another metric, the CNBC
aggregate category for the cost of doing business, considers the cost of paying
wages and presumably, says Hall, “a state in which every employee worked for
sub-poverty wages would get a very high grade in this category, while those
paying living wages that can sustain a family and support a viable business community
through demand for goods and services, would get a low grade in this category.”
It seems clear that these
rankings of states by various business interests, including corporate entities
such as CNBC, puppet organizations such as ALEC and members of the State Policy Network (which includes the RI Center for Freedom and Prosperity) and various
Chambers of Commerce are not objective measures of a state’s economic
well-being, but are tools crafted to shape public policy to the advantage of
large business interests and to the detriment of the poor and middle class.
The most sensible tactic
in dealing with such garbage is to file it accordingly.
Steve Ahlquist is an award-winning journalist, writer, artist and
founding member of the Humanists of Rhode Island, a non-profit group dedicated
to reason, compassion, optimism, courage and action. The views expressed are
his own and not necessarily those of any organization of which he is a member. atomicsteve@gmail.com and Twitter:
@SteveAhlquist