Tuesday, August 15, 2006
Another Day, Another Ranking
Pittsburgh has once again managed to squeeze into the Top Ten of another national ranking, this time making the ninth spot on Expansion Management’s “Best Places to Relocate a Business”. The region made its mark based on health care costs, transportation, knowledge workers, etc. Pittsburgh’s good health care cost finding is interesting since Pennsylvania has some of the highest insurance rates in the nation.
Note that having new stadiums and arenas was not listed as important criteria. Two years ago, Pittsburgh was number 17 on the list. Pittsburgh has also seen other national rankings praise its business location desirability with Inc. Magazine and Site Selection Magazine weighing in on its assets.
These rankings are very puzzling considering that the Pittsburgh region is perennially at the bottom of real world business measure rankings such as job growth and startups and population losses. The latest Census tally shows another net loss of 12,000 people from the metro area. An earlier report showed that Allegheny County had suffered nearly 40,000 net outmigrants since 2000.
Obviously, there is a mismatch between the criteria national publications are using to build their rankings and the factors actually used by companies in making location decisions. The same Expansion Management ranking that places Pittsburgh ninth included a ranking by relocation professionals, presumably the people in the know. They placed Pittsburgh as 24th out of 50. And even that sounds unduly high.
The National Association of Manufacturers recently conducted a survey of manufacturers as to their location criteria. Not surprisingly, the key element is cost reduction. They need to be able to control operating costs and labor costs. Maybe that explains why Southeastern Right-to-Work states do so much better at attracting facilities than the North Central and Northeastern states.
Rankings based on factors that do not address items like union strength or put enough emphasis on government spending growth relative to tax base growth are worse than useless, they are misleading and counterproductive in that they delude politicians to congratulate themselves for spurious reasons.
Note that having new stadiums and arenas was not listed as important criteria. Two years ago, Pittsburgh was number 17 on the list. Pittsburgh has also seen other national rankings praise its business location desirability with Inc. Magazine and Site Selection Magazine weighing in on its assets.
These rankings are very puzzling considering that the Pittsburgh region is perennially at the bottom of real world business measure rankings such as job growth and startups and population losses. The latest Census tally shows another net loss of 12,000 people from the metro area. An earlier report showed that Allegheny County had suffered nearly 40,000 net outmigrants since 2000.
Obviously, there is a mismatch between the criteria national publications are using to build their rankings and the factors actually used by companies in making location decisions. The same Expansion Management ranking that places Pittsburgh ninth included a ranking by relocation professionals, presumably the people in the know. They placed Pittsburgh as 24th out of 50. And even that sounds unduly high.
The National Association of Manufacturers recently conducted a survey of manufacturers as to their location criteria. Not surprisingly, the key element is cost reduction. They need to be able to control operating costs and labor costs. Maybe that explains why Southeastern Right-to-Work states do so much better at attracting facilities than the North Central and Northeastern states.
Rankings based on factors that do not address items like union strength or put enough emphasis on government spending growth relative to tax base growth are worse than useless, they are misleading and counterproductive in that they delude politicians to congratulate themselves for spurious reasons.
