Cost of Doing Business

Massachusetts has become, in some ways, a more affordable place to do business, according to research by the Massachusetts Taxpayers Foundation. In 1993, when MTF released its first report on business costs, the state ranked near the top in six key categories: health care costs, manufacturing wages, workers’ compensation insurance rates, unemployment compensation rates, corporate taxes, and electricity costs. In a 1995 report, MTF noted that workers’ comp. costs had come down significantly — a result of a major legislative reform effort in 1991. The following tables are based on updated information from MTF. In the workers’ comp. index, Massachusetts has dropped from 14th in the nation in 1993 to 19th two years later and now to 21st. In the manufacturing wage index, the state was ranked 10th in 1993 and 1995, but now has fallen to 20th — with wages 1.7 percent above the national average. Energy costs remain high. It remains to be seen whether last fall’s legislation deregulating the electricity industry will bring dividends.

Workers’ Compensation Comparative Cost Index
Indexed Average Net Costs as of January 1997
1. Louisiana 1.633
2. Oklahoma 1.620
3. Rhode Island 1.410
4. Hawaii 1.371
5. Pennsylvania 1.351
6. Texas 1.346
7. New Hampshire 1.301
8. New York 1.287
9. Montana 1.244
10. Florida 1.233
11. New Mexico 1.197
12. Alabama 1.181
13. Michigan 1.170
14. Connecticut 1.131
15. Maine 1.115
16. Kentucky 1.088
17. Vermont 1.084
18. Delaware 1.075
19. Colorado 1.072
20. Georgia 1.063
21. Massachusetts 1.057
22. Missouri 1.009
23. Tennessee 1.005
  U.S. Average 1.000
24. Illinois 0.943
25. South Dakota 0.919
26. Kansas 0.916
27. California 0.898
28. Minnesota 0.885
29. New Jersey 0.880
30. Wisconsin 0.835
31. Alaska 0.833
32. Mississippi 0.824
33. Arkansas 0.803
34. Arizona 0.776
35. Idaho 0.760
36. Oregon 0.738
37. Nebraska 0.715
38. South Carolina 0.667
39. North Carolina 0.667
40. Maryland 0.661
41. Iowa 0.654
42. Utah 0.575
43. Indiana 0.516
44. Virginia 0.477
45.
45.
45.
45.
45.
45.
Nevada
North Dakota
Ohio
Washington
West Virginia
Wyoming
N/A
N/A
N/A
N/A
N/A
N/A
Source: Massachusetts Taxpayers Foundation

Manufacturing Wage Index
November 1997
Rank State Index
1. Michigan 129.76
2. Ohio 115.79
3. Washington 115.63
4. Wyoming 115.18
5. Delaware 111.93
6. Indiana 111.63
7. Connecticut 110.42
8. New Jersey 107.70
9. Maryland 107.02
10. Louisiana 105.97
11. Nevada 105.06
12. Pennsylvania 104.38
13. Minnesota 103.47
14. Wisconsin 103.25
15. Iowa 103.02
15. Kansas 103.02
17. Idaho 102.27
18. Colorado 101.81
18. Montana 101.81
20. Massachusetts 101.74
21. Illinois 101.59
22. Hawaii 101.21
23. Oregon 101.13
24. California 100.53
25. New York 100.45
  U.S. Average 100.00
26. Kentucky 99.92
27. West Virginia 99.17
28. Maine 98.19
29. Utah 97.21
29. Vermont 97.21
31. Missouri 96.30
32. Virginia 95.17
33. Alaska 94.86
34. New Hampshire 94.49
35. Oklahoma 94.03
36. Texas 91.54
37. Nebraska 90.86
38. Alabama 89.27
39. Tennessee 88.82
40. Arizona 88.67
41. Georgia 87.54
42. North Carolina 86.33
43. North Dakota 86.10
44. Rhode Island 85.27
45. New Mexico 82.70
46. Florida 81.87
47. Arkansas 81.80
48. Mississippi 79.08
49. South Carolina 78.55
50. South Dakota 75.60

 

1996 Industrial And Commercial Energy Costs
Cents Per Kilowatt-hour (Ranked by industrial costs, with commercial ranking in parentheses)
Rank State Industrial Commercial
1. Hawaii 10.00 12.90 (1)
2. New Hampshire 9.20 11.40 (3)
3. Massachusetts 8.60 10.00 (9)
3. Rhode Island 8.60 10.20 (7)
5. Alaska 8.30 9.50 (11)
6. New Jersey 8.20 10.40 (4)
7. Connecticut 7.90 10.30 (6)
8. Vermont 7.60 10.20 (7)
9. California 7.00 9.70 (10)
10. Maine 6.40 10.40 (4)
11. Pennsylvania 5.90 8.30 (12)
12. Arizona 5.30 7.90 (15)
12. Illinois 5.30 8.00 (13)
12. New York 5.30 12.10 (2)
15. Florida 5.20 6.80 (23)
15. Michigan 5.20 8.00 (13)
17. Nevada 4.80 6.60 (27)
17. North Carolina 4.80 6.40 (30)
19. Delaware 4.70 7.00 (21)
19. Kansas 4.70 6.70 (25)
  U.S.Average 4.60 7.63
21. Arkansas 4.50 6.80 (23)
21. Colorado 4.50 5.90 (38)
21. Missouri 4.50 6.10 (34)
21. North Dakota 4.50 6.10 (34)
21. South Dakota 4.50 6.70 (25)
26. Georgia 4.30 7.20 (18)
26. Louisiana 4.30 7.10 (19)
26. Minnesota 4.30 6.20 (33)
26. Mississippi 4.30 7.10 (19)
26. New Mexico 4.30 7.90 (15)
26. Tennessee 4.30 6.10 (34)
32. Maryland 4.20 6.90 (22)
32. Ohio 4.20 7.70 (17)
34. Texas 4.00 6.60 (27)
34. Virginia 4.00 5.90 (38)
36. Indiana 3.90 6.00 (37)
36. Iowa 3.90 6.60 (27)
36. South Carolina 3.90 6.40 (30)
36. West Virginia 3.90 5.70 (41)
40. Alabama 3.80 6.40 (30)
41. Nebraska 3.70 5.40 (45)
41. Oklahoma 3.70 5.70 (41)
41. Wisconsin 3.70 5.70 (41)
44. Montana 3.60 5.60 (44)
44. Utah 3.60 5.90 (38)
46. Oregon 3.40 5.20 (46)
46. Wyoming 3.40 5.10 (48)
48. Kentucky 2.90 5.20 (46)
48. Washington 2.90 4.90 (49)
50. Idaho 2.70 4.30 (50)
Source: Massachusetts Taxpayers Foundation