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CNBC: Minnesota Climbs to First for Business; South Dakota Stuck at 11th

By Cory Allen Heidelberger on 2015-06-25

CNBC dealt Governor Dennis Daugaard’s propagandists a body blow last year by dropping South Dakota’s business-friendliness ranking from #1 to #11. Now CNNC twists the knife, leaving South Dakota at 11th and saying the best state for business in 2015 is our economic arch-rival, Minnesota.

State MN ND NE IA SD WY MT
Overall 1 6 7 10 11 18 28
Workforce 13 1 11 44 35 34 48
Cost of Doing Business 35 25 15 8 5 20 16
Infrastructure 9 8 21 28 19 4 12
Economy 5 13 20 10 8 23 16
Quality of Life 3 19 15 9 17 17 13
Technology and Innovation 6 41 32 24 44 49 41
Education 2 15 16 18 23 8 32
Business Friendliness 23 1 5 19 2 19 30
Cost of Living 32 29 8 14 35 18 30
Access to Capital 23 31 36 39 27 50 39

Now to be fair, 11th place isn’t bad. I’d be thrilled to see South Dakota rise to 11th place in average teacher salary. This new CNBC ranking is just one of several rankings that the Governor’s Office of Economic Development can cite showing South Dakota in the top quarter of states.

But look what’s keeping us out of the top ten for business. Last year our sandbags were education, infrastructure, and technology and innovation. This year, tech/innovation is still our lowest score, but we’ve sunk on workforce (not enough skilled workers available, a fact acknowledged by our governor’s vo-tech push) and—another kick in the teeth for GOED propagandists—cost of living. According to CNBC, South Dakota’s current cost of living is the worst in the region. Even Minnesota comes out better on cost of living (personal note: I was regularly getting milk, orange juice, cereal, and pizza for less in Minneapolis last winter than I am now in Aberdeen).

CNBC’s methodology gives far more weight to cost of doing business than cost of living, and South Dakota beats Minnesota and the rest of our neighbors in that category, but that’s the only category we top. We’re near the bottom of our region for quality of life (but remember: the entire region places in the top 20 for quality of life).

South Dakota can continue to claim it’s a good place to do business, but we have to acknowledge that our sole clear advantage, a low cost of doing business, is not enough to set us apart from our regional competitors.

Update 08:48 CDT: The Minnesota Department of Employment and Economic Development quickly touts its #1 ranking.

Published in South Dakota

6 Comments

  1. Mr. Sol 2015-06-25 07:57

    These numerical rankings are always subjective at best. Companies know that if they really want to save money that they come to South Dakota.

  2. Nick Nemec 2015-06-25 08:29

    And the way they save money is by screwing South Dakota workers with lower pay, a behavior encouraged by our State government. Then they whine about not being able to get enough skilled workers to fill positions and complain that the ones they find are a bunch of slackers, another business behavior encouraged by our State government and a governor without the guts to explain the laws of supply and demand to these alleged businessmen.

  3. Troy 2015-06-25 10:15

    The great things about scorecards (even where subjective) is it gives opportunity for self-examination and goals for improvement.

    BTW, Quality of Life is excessively subjective and to large degree unchangeable on certain matters (i.e. we won’t ever be a major TV market and have major professional sports teams). And, there are aspects of other measures that will never change (i.e. have Universities which support significant basic research because of our population base). And, that’s ok. I go to as many Twins/Vikings/Timberwolves games as most Minnesotans and some aspects of our Quality of Life is why we live here. Focus on what you can improve/change.

  4. Jenny 2015-06-25 11:04

    I would think SD would get sick of seeing that liberal neighboring state of MN being first all the time. Face it SD, you are dead last in so many things, and prospective job applicants know enough about your slave labor wages they want no part in your state except for a Black Hills visit every now and then. And, your corrupt one rule GOP government that hides in Pierre wants it that way. So you’re screwed.

  5. MD 2015-06-25 11:40

    This is a blow to SD. Even worse, evidenced by the legislature’s concern this session, we are going to lose our greatest advantage over Minnesota – our roads. The legislature seemed to be more concerned about getting our roads up to snuff than addressing other issues. At least it will help cement our status as “drive through” or “fly over” country.

    One of the easier things South Dakota could do for quality of life is build a strong college sports team. Between UND Hockey and NDSU Bison Football, I may never want to return to South Dakota. South Dakota needs a strong DI collegiate sports team to make up for our lack of professional sports. I’d love to see a SD university/UND hockey match at the Premier Center.

  6. caheidelberger Post author | 2015-06-26 15:06

    Deb sends me the Star-Trib’s article on Minnesota’s win. It includes this vital statement:

    “Never since we began rating the states in 2007 has a high-tax, high-wage, union-friendly state made it to the top of our rankings,” CNBC said in a statement accompanying the rankings. “But Minnesota does so well in so many other areas — like education and quality of life — that its cost disadvantages fade away”[Paul Walsh, “Minnesota Is Nation’s Best State for Business, CNBC Declares,” Minneapolis Star-Tribune, 2015.06.25].

    Empowering labor and expecting citizens to pay their fair share of taxes do not stand in the way of building a good economy. I’d suggest they’re necessary.

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