08/01/2008
CONTACT: Troy Nichols, 360-786-8675 or Tony Malandra, 415-664-9685
Not so fast, Oz is not as powerful as he seemed at first look
OLYMPIA, Wash. -- The representative group for Washington's small business owners -- the people who employ more workers and generate more new jobs than big business does -- today warned lawmakers not to overstate Forbes magazine's recent ranking of the state as one of the best places in the country to do business.
"Reporters and researchers for a magazine based in New York and Washington, D.C., are not as close to the ground as the coffee shop owner in Spokane or a small business farmer in Wenatchee," said Troy Nichols, Washington state director for the National Federation of Independent Business. "I think people here will tell you a different story about the state's business climate, and there is more than enough contradictory information out there to seriously question Forbes' conclusions."
The problem with Forbes' rankings, according to Nichols, is the broadness of its six categories and its rather too-close-to-the-vest methodology. When NFIB measured Washington against 26 other states a few years back, the state came in last in its support it of small business. And just this week, a Strategic Vision poll showed 65 percent of Washingtonians believe the state is headed in the wrong direction.
"Among several of the categories Forbes uses in its rankings, the results are counterintuitive and their actual relevance to the success of small business is dubious," stated Nichols. "Without question, if you're a corporate giant in the aerospace or computer software industry, Washington is a wonderful place to be. Unfortunately, in the one Forbes category that's most relevant to small businesses -- business costs -- Washington continues to languish in the bottom half of the country."
"Our state still has one of the highest business failure rates in the nation; we are one of the undistinguished few to tax businesses on their monthly gross income, whether or not they made a profit for that month; we have the highest, job-killing minimum wage rate in the United States -- one that automatically increases every year regardless of economic conditions; we base our mandatory workers' compensation rates on hours rather than on payroll and we are one of only five states that prohibit small businesses from purchasing workers' comp insurance from private companies; and our unemployment insurance taxes, another mandatory levy, are the second highest in the country," said Nichols, listing just some of the many barriers to starting and maintaining a business in Washington. "I haven't even scratched the surface. Our state government's hijinks with the death tax is yet another mark against it."
Nichols expects that some lawmakers will be eager to capitalize on these rankings in this political season, but he worries about what misleading affects it might have on other policymakers. "Any good practitioner of the political arts rightly seizes on good news. Our hope is that after the media lights have dimmed, serious work on making Washington a great place for business in deed, and not in words, can commence."
