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State vs. State 

Which state is the most objectively business-friendly? Depends on your measuring stick

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Butch started it. Against the backdrop of a tax increase in Oregon — and proposed tax increases in Washington — Idaho Governor C.L. “Butch” Otter published a “love letter” aimed at wooing away Washington and Oregon businesses. Hey, baby — the gist of the letter went — how ’bout you get with a low-tax state that’ll treat you juuuust right?

Washington Governor Christine Gregoire punched back, bragging about Washington’s high rating in Forbes and teasing Idaho for its state income tax.

Gregoire “wanted to make sure it remains lighthearted and fun,” says Jon Hanian, Otter’s spokesman. He says Otter jokingly made a bet with her that, if Washington brings in more new businesses than Idaho, he’d send Washington a free pack of wolves.

Well, which state really is better for business? Let’s take a look at some hard numbers.

Minimum Wage
Whether a high minimum wage is good or bad for business is a matter of debate between liberals and conservatives. On one hand, a high minimum wage means entry-level workers have more to spend at area businesses. On the other, it means higher labor costs.

Washington: $8.55 (highest in nation)
Oregon: $8.40 (second-highest in nation)
Idaho: $7.25 (federal minimum); $3.35 for tipped employees

State unemployment rate (January 2010)
The unemployment rate is one way of determining the health of an economy. Of course, high unemployment can also mean more candidates competing for a single job — theoretically, that could be advantageous to businesses. In January 2009, Idaho’s rate was comparatively low, but it has leaped dramatically — three percentage points — over the past year.  

Oregon: 10.7 percent
Washington: 9.3 percent
Idaho: 9.3 percent

Adults with a college degree (as of 2006)
While a better education is not always indicative of better workers, it can certainly help.

Washington: 42 percent
Oregon: 37.7 percent
Idaho: 34.6 percent

Suicide rates per 100,000 (as of 2006)
And then there’s the issue of general morale. While happiness is notoriously difficult to measure, suicide rates are not.

Oregon: 15.7 (eighth-highest in the nation)
Idaho: 15.2 (10th)
Washington: 12.7 (23rd)

The Tax Foundation’s 2010 ranking of overall business tax climate
Comparing tax rates between states is complicated. For example, Washington has a business and occupation tax and a sales tax, but no business or personal income tax. The Tax Foundation calculates these and, algorithmically, produces an overall ranking out of 50. (In this case, a higher ranking means a lower tax burden.)

Washington: ninth
Oregon: 14th
Idaho: 18th

The Pacific Research Institute’s 2008 Economic Freedom ranking
Taxes aren’t everything, though. A business may have low taxes but be constrained by a slew of different regulations. The Economic Freedom index measures 143 indicators — including wage laws, regulations, tax rates, and most crucially, immigration patterns.

Idaho: second
Washington: 16th
Oregon: 32nd

Forbes ’ 2009 “Best States for Business”  
Forbes goes even further, adding factors for schools, crime and projected future growth.

Washington: second
Oregon: 10th
Idaho: 11th

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