Forbes ranks NC as 4th best state for business

Forbes ranked Carolina as the fourth best state for business in a recent study — but local economists say it only gives one side of the picture.

The study examines the state economy from the point of view of the employers, not the employees, said Patrick Conway, UNC economics professor.

North Carolina, with no union work force, low employer taxes, high unemployment and low worker wages, is a hotbed for businesses, he said, adding that after he saw what was factored into the study, the rating Forbes gave North Carolina didn’t surprise him.

To calculate the rankings, Forbes’ study incorporated six factors for business including costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life.

“North Carolina is one of the nicest places to be as an employer,” Conway said. “These things are in actuality disqualifying our state.”

This study indicated that North Carolina has one of the smallest union workforces in the country. This means that employees are unable to organize and form unions, and in turn cannot bargain for higher wages. This has resulted in labor costs 19 percent below the national average — the third lowest in the country.

Forbes also indicated that North Carolina has one of the highest migration rates in the nation. Conway attributed this to the number of available jobs in the Triangle and Triad areas prior to the recession.

“The tremendous inflow of workers into these areas is a good thing because employers will find a larger pool of potential employees,” he said.

But North Carolina’s unemployment rates remain much higher than the national average. Conway said migration plays a factor.

“We had a fast growing economy under the most recent policies undertaken, which created jobs at a quick rate — people would move to North Carolina because there were jobs being created,” he said. “When they got here, the recession would start. They were already here and without a job.”

A statement from Gov. Pat McCrory’s office said that some of his reforms and goals achieved so far have aimed to improve the economy, education and efficiency in the state.

“However, the governor remains committed to reducing our unemployment rate and building upon North Carolina’s successes to become the best state for business and people,” it read.

Michael Walden, professor of agricultural and resource economics at N.C. State University, said business in North Carolina could improve by more vocational and technical courses in high schools.

The state has a ready supply of college graduates but has a shortage of tradecraft workers, he said.

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