Monday, August 15, 2005

Rhetoric or reality?

Last week, the Milken Institute released its annual Cost-of-Doing-Business Index. It finds Hawaii, New York and Massachusetts to be the most expensive places to do business in the United States. Both the index and the data used are available here. Louisiana's ranking moved upward (that's the wrong direction) from 38th last time around to 32nd this time. The Milken Institute index is comprised of state performance indexed in several categories: wage costs, tax burden, electricity cost, industrial rent cost, and office rent cost. To place Louisiana's performance in context, copied below are the U.S. and LA averages on 3 important factors: wage per employee US: 37.154 LA: 30.219 tax burden: US: 61.4 LA: 64.4 electricity cost (per kilowatt hour): US: 6.56 LA: 6.49 The conclusion to be drawn from this simple comparison is that although wages are lower in Louisiana and electricity is cheaper in the state, the tax burden in Louisiana is higher than the national average. That tax burden number strongly suggests that Louisiana isn't nearly as business-friendly as current state rhetoric suggests. All this proves, yet again, that changing the rhetoric doesn't change the reality.