Minnesota, known for high taxes and for being sympathetic to labor unions, is the nation’s best state for conducting business in 2015, according to a new ranking from CNBC, the business news channel.
The state moved up from No. 6 last year and 15th in 2013.
“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.”
The network’s study uses 60 measures of competitiveness, separated into 10 categories. The categories include workforce, economy, infrastructure and transportation, education, cost of living, cost of doing business, access to capital, innovation, business friendliness and quality of life.
Minnesota got high marks for its low unemployment rate (3.8 percent) and its strong labor force participation rate (70.8 percent).
CNBC also said Minnesota ranked third for quality of life, noting a low crime rate, clean air and water, and access to quality health care.
“Minnesota is on the right track overall for business growth, for job creation, for improved standard of living, quality of life,” Gov. Mark Dayton said at a news conference Thursday highlighting the ranking. “Not that we don’t have our deficiencies; we do … but overall, and the fact that businesses look at state’s circumstances overall, we’re on the right track.”
According to the study, Minnesota’s workforce is highly educated, and worker-training programs try to ensure future placement in jobs.
In 2014, Minnesota tied for 12th place in CNBC’s education category. This year, Minnesota placed second, citing the state’s educated workers and the availability of more than 200 public and private higher-education institutions that offer companies the ability to recruit talent. The study also emphasized the state’s K-12 education system, including long-term funding trends.
Rounding out CNBC’s top five this year are Texas, Utah, Colorado and Georgia (first last year). Bringing up the rear, from the bottom up, are Hawaii, West Virginia, Rhode Island, Alaska and Louisiana.
Minnesota’s neighbors also did well: North Dakota was sixth, Iowa 10th, South Dakota 11th and Wisconsin 15th.
CNBC said it seeks input “from a broad and diverse array of business and policy experts,” official government sources, the CNBC Global CFO Council and the states themselves.
In explaining the weighting of categories, “to some degree, Minnesota benefits from a trend that we have sought to reflect in our study this year,” the network said. “Rather than just seeking the lowest taxes or the highest incentives, companies are increasingly chasing the largest supply of skilled, qualified workers.
“So states are touting their work forces like never before, giving the workforce category — where Minnesota finishes a respectable 13th — the greatest weight in our study.”