he more bloated the federal government gets, the more incumbent it is on the states to provide the location attributes that still make a US location desirable. I’ll bet that’s why almost seven years into the Obama Administration, 31 of 50 governors are Republican, as are the clear majority of state houses. They’re more likely to enact measures that grow economies and create jobs. It’s also why right-to-work laws are now in place in 24 states, up from 22 just a few years ago, and it’s becoming a possibility if not a likelihood in several more.
Newly elected Gov. Bruce Rauner of Illinois finds his state sandwiched between two right-to-work states and the prospect of such legislation being debated, if not passing, in its three other border states — Wisconsin, Kentucky and Missouri. New Hampshire and New Mexico are two more states where the notion is gaining traction as Southern right-to-work states continue to dominate in attracting large automotive and other industrial facilities.
This is not to say a state must be right-to-work to be successful — it doesn’t. Companies will invest in the location that best meets their workforce, logistics and cost criteria. It helps if a state has competitive workers’ comp rates, relatively low business taxes and a regulatory climate that’s not stifling. But is it a coincidence that nearly all the states with no or low corporate income tax are right-to-work — or moving in that direction?
Kentucky is a Site Selection Governor’s Cup winner for new projects per capita announced in 2014, and it is not yet right-to-work, though Warren County — the Bowling Green area — passed such an ordinance late last year. This move toward localized right-to-work zones, as Gov. Rauner is proposing (see the Illinois Spotlight in this issue) is one we will chronicle in these pages as states and local communities compete with neighboring states — and globally — for capital investment and the jobs it brings. Texas claims the other Governor’s Cup, for total project activity in 2014 — we congratulate Gov. Greg Abbott and Kentucky Gov. Steve Beshear for their states’ business expansion success. The cover story, illustrated so effectively by our own production coordinator and designer, Bob Gravlee, explains what’s behind their success.
Not to dwell on Gov. Rauner’s situation (Governors Abbott and Beshear get plenty of attention in this issue). But I was struck while writing the Illinois Spotlight just how stark the choice is between Illinois and neighboring states, particularly where workers’ comp rates and other business-climate measures are concerned. In that article you’ll hear from a trucking business owner who can barely get quotes from workers’ comp carriers, let alone the insurance. A few years ago, he could have saved $450,000 in workers’ comp alone by moving his business to Iowa, just a few miles away. That’s the equivalent of four new trucks and five new jobs, he told me. He stayed in Illinois, and today he’s confident that better days are ahead. He’s counting on you, Gov. Rauner.