Pa. 5th worst for business startups
Those thinking about starting up a new business definitely want to steer clear of Hawaii, but they also may want to think twice about hanging out a shingle in the Keystone State.
Pennsylvania ranks fifth worst among the 50 U.S. states in which to start a business, according to the personal finance website WalletHub.
The best state for a business startup is Texas, and the four ranked below Pennsylvania are Vermont, Rhode Island, New Hampshire and Hawaii, according to WalletHub.
But those in the know in Butler County take issue with the article, saying the ranking does not hold water in the southwestern part of the state.
Mark Gordon, the county's chief of economic development and planning, said statistics can be manipulated.
“At first blush, they're citing statistics by state,” said Gordon, “but I think the southwestern Pennsylvania region and the statistic of Pennsylvania are not one and the same.”
Gordon used as an example the cost of living index, which he said was 99.6 in the Pittsburgh region in 2017, while the benchmark average was 108.
He said many large cities were lower than Pittsburgh, but Cleveland, Denver, Baltimore, Boston and Philadelphia were higher.
“There are two major cities in the state and that can skew that statistic for a region if it is looked at statewide,” Gordon said.
He also took issue with the article's reference to affordability of business space.
“Southwestern Pennsylvania is very, very attractive for investors,” Gordon said.
Regarding another criteria used in the article, access to workers, he said the region has a very educated population at both the university and vocational levels.
“We also have a relatively low unemployment rate,” Gordon said.
The Butler County unemployment rate was 4.4 percent as of March, according to the Bureau of Labor Statistics website. The national average was listed as 4.1, but neighboring Armstrong was at 6 percent and Beaver at 5.1 percent.
Gordon said a statewide look at data on starting up a new business is not the best way to go.
“While I think (the WalletHub article) was an interesting read, I think it was done in generalities and doesn't really paint a true picture of what we have going on in southwestern Pennsylvania,” Gordon said.
Stan Kosciuszko, the president of the Butler County Chamber of Commerce, agreed with Gordon.
“When you look at the state of Pennsylvania, overall I can see where we would be considered low on the totem pole, but I am the envy of my friends in other places,” Kosciuszko said.
He credited Cranberry Township and Slippery Rock as influences in the county's success, and said the county's status as one of only two in the state that contain both a community college and state college is significant.
But Kosciuszko said there are some downsides to the state as a whole.
Kosciuszko said Pennsylvania has the largest and most expensive state legislature in the country, as well as the most townships, boroughs and cities.
He decried the high number of school districts in Pennsylvania as opposed to many other states that have one district per county.
“Somebody has to fund all that,” Kosciuszko said, “and it's taxes.”
Regardless of the WalletHub article, Kosciuszko said Butler County is a great place to start a business.
“The quality of life here is unsurpassed,” he said. “It's easy to get around and there's lots of recreation, including golf courses.”
U.S. Rep. Mike Kelly issued a statement on Tuesday regarding the WalletHub article.
“While our country is experiencing an undeniable economic resurgence thanks to pro-growth leadership and policies at the federal level, it's unfortunate to see Pennsylvania on this kind of list,” the statement said. “I think the lesson is clear: If we want Pennsylvania to reach its fullest potential, then we need to change the leadership in Harrisburg. We need a new governor who will implement a pro-growth agenda.”
The list was compiled using two methods. One was to rank each state according to business environment, access to resources and business costs.
Within those criteria are benchmarks like highest and lowest average growth in number of small businesses, most and least accessible financing, lowest and highest labor costs, highest and lowest availability of “human capital,” longest and shortest average workweek, least and most expensive office spaces, and most and least educated population.
For insight into the ways in which different measures impact business, WalletHub quizzed a panel of 10 experts on items such as the impact of President Donald Trump's economic policies enacted thus far, how state policies like corporate tax rate influence those considering starting a business, whether tax breaks and other incentives are a good investment for states, and what measures state authorities can take to encourage new businesses.
The article can be viewed at www.wallethub.com/edu/best-states-to-start-a-business.
