CNBC named Ohio a “Best State for Business.” Here’s what that means – and what it doesn’t.

When CNBC announced last week that it had rated Ohio this year “Best condition for business,Republican Party leaders said this is evidence that their economic policies are benefiting Ohioans. But that’s not what the ranking was intended to assess, said a journalist who helped create it.

The rankings were also not an assessment of which state attracted the most high-quality jobs. It was something less specific: a measure of which countries rank best according to the criteria by which countries promote themselves.

For their part, critics say the rankings do not pay enough attention to the sedate financial difficulties millions of Ohioans currently face.

Big party

Last Thursday, Ohio Republicans triumphed in the fight for the top spot in the rankings.

CNBC broadcast episode He started with Ohio State football legend Archie Griffin declaring, “We have a winning team in Ohio, both on and off the field.”

Cut to a celebration at the Boathouse at Confluence Park in Columbus, filled with drone footage of the Ohio State cheerleaders and an interview with Gov. Mike DeWine.

Among the many press releases that have been issued, Ohio House Speaker Matt Huffman released one lending policy implemented since the beginning of total GOP legislative and executive rule in 2011.

“I want to congratulate the many members of the Ohio General Assembly who have supported legislation over the last 15 years that led to this achievement,” Huffman said in a written statement.

He continued: “Through responsible policies and investments, including eliminating Ohio’s property tax, flattening the personal income tax, the business income tax deduction, regulatory reform, free-market energy creation, significant job training support, state and local economic development tools and much more, we continue to make Ohio the best place to live, work, raise a family and do business.”

However, the Policy Matters Ohio think tank found that many of these and other changes since 2005 have favored corporations and wealthy individuals, while cutting state tax revenue by $17 billion.

Critics say it puts a challenge to the immense number of middle-income Ohioans affordability crisis with less state support and bearing a greater burden of paying for other services.

“Ohio’s No. 1 ranking may be good news for companies, but it does not reflect the reality that many of the state’s most popular jobs pay too little enough for even one person to survive, and definitely not enough to support a family” – Policy Matters Executive Director Hannah Halbert said in a written statement. “Ohioans continue to struggle with affordability child caregaps in health insurance and wages that haven’t kept up with inflation.”

Method and metrics

The clear disagreement over the benefits of GOP economic policy raises an obvious question: What was it trying to measure when it ranked Ohio as best for business?

“We look at it through the lens of the person who chooses the location, whatever it is, the plant or the data center, how they make decisions,” Scott Cohn, a CNBC reporter who covered the story, said in an interview. “This is how it all started in 2007 – why do companies choose this state over another?”

But when the CNBC team conducted its assessment, it did not attempt to fully objectively assess which states were best for business. Rather, she based her analysis on how countries promoted themselves.

The study determined what representatives of countries dealing with economic development most often mentioned in materials promoting their countries. It then tried to measure which countries were best at providing these things.

From year to year, countries change the way they promote themselves among enterprises. The CNBC survey annually evaluates the positions of all 50 states to decide how much weight to give to each of the 10 criteria by which it ranks states.

This year, the most significant category was infrastructure – adequate roads, bridges, electricity and land ready for construction. Apart from available water, the main factor in Ohio’s success was not a consequence of any government policy, it was a coincidence of geography.

“We look through and see how states promote themselves,” Cohn said. “We visit their websites and see what they mention most often, what we classify as infrastructure.

“For example – and this really helps Ohio – almost every state… says, ‘Within a day’s drive, we have X population. Well, you can measure that, and Ohio has the most. Within a day’s drive, Ohio has 143 million people, more than any other state. So it gets some points in the infrastructure category for that.’

Conversely, rankings diminish the importance of other criteria not because they are irrelevant to companies, but because state marketing materials do not make a substantial deal about them.

For example, a top-notch public education system is clearly significant to businesses for at least two reasons: it trains their future workforce and it is a major advantage for companies trying to attract talent.

However, when CNBC assessed its 10 criteria, education came in second to last, earning only 4% of the overall ranking.

“We’re looking at what the states are talking about,” Cohn said. “For some reason, some states talk a lot about (education), and a lot of states talk about, ‘We have a great college system.’ That counts for a state’s weight. But that’s not what the states say collectively.”

Whack a mole

Cohn explained that good or bad performance on some criteria can have the opposite effect on others.

“It’s kind of like a game of whack-a-mole where you can reduce the cost of doing business,” he said. “It’s great for businesses, but in the process you cut payroll costs and do all sorts of things that impact individuals. And if you have an affordability problem for individuals, you might have a labor problem.”

As Cohn noted to DeWine during the interview, Ohio ranks poorly in terms of labor force – 35th.

“This is a glaring weakness,” Cohn told the governor. “Not only because there are no workers here, but because they won’t come and many are leaving.”

Moreover, since the weighing depends only on which countries marketers believe is significant, many Ohioans – and perhaps some businesses – might disagree with their priorities.

For example, Ohio ranked first for low cost of doing business, the fifth-largest criterion and accounting for 11.4% of the ranking.

Low wages have helped Ohio in this regard, but Cohn explained that they are hurting states in the cost of living category.

“Lower salary costs are included in the costs of running a business, but they may be reflected in the costs of living,” he said.

But because state marketers don’t highlight it, affordable cost of living ranks last, accounting for just 2% of the state’s overall rating.

In other words, the rankings don’t say there isn’t an affordability crisis in Ohio. They say that as a group, state economic marketers don’t consider it a priority when selling their states.

Who wins?

So do the rankings confirm or reject the economic policies Ohio Republicans have implemented since 2011?

“Not one thing,” Cohn said. “We collect data through the lens that I was talking about – looking at where the business is going to be located. And if everyone expects their politicians to be the party that will attract the most business – and that’s completely reasonable – that says a lot about what Ohio is doing in this regard.”

But he added: “If they’re looking for areas where the state isn’t doing so well, it speaks for itself. It’s not the best state for education. It’s not the best state for workforce. It’s not the top state for quality of life. It’s not bad, but it’s not even close to the top. It’s a study of the best states for business. It’s not a study of the best states for workers. But there are areas there that you can look at, like quality of work life or whatever.”

The November midterm elections are approaching. Ohio Democrats said that if Republicans want to apply CNBC’s rankings to say that the economy is good for average Ohioans, they are ignoring reality.

US Senator “Jon Husted and Ohio Republicans are bragging about the economy while hard-working Ohioans are struggling more than ever,” Ohio Democratic Party spokesman Tony Wen said in an email. “Under their leadership, inflation has risen, gas prices have skyrocketed and more than 160,000 Ohioans have lost health care, but Husted still thinks everything is great. Ohioans know better and will hold him accountable in November.”

For his part, Husted went to X to brag about CNBC’s ranking.

“This didn’t happen by accident – we’ve been focusing on this for decades,” he added. he wrote. “We cut taxes, eliminated three business taxes, and invested in infrastructure and our workforce. We also made Ohio the easiest and cheapest state to do business in.”

When asked to respond to Wen’s criticism, Husted’s communications director, Amy Natoka, did not respond — beyond attempting to attack the Ohio Capital Journal’s credibility.