EDITORIAL: State rankings don't mean that much

The states that ranked ahead of Indiana in Chief Executive’s magazine annual ranking were Texas, Florida, North Carolina and South Carolina.

Indiana was ranked in the same place last year as well, due in part, according to the magazine, to the state’s predictable tax rates and state legislature.

In ranking the states, the magazine looked at taxation and regulation, workforce quality, living environment (Indiana scored more than seven out of 10 on each metric) and whether a state is a right-to-work state, which Indiana is.

These are metrics that our local economic development corporations love to champion. And, they should. We’ve talked to companies who say they have moved or started their companies in Indiana due to the local regulatory environment.

But how important are such rankings?

The three states at the bottom of the list — Illinois, New York and California — also rank in the top five in terms of population. (Texas and Florida complete that top five list.)

More people keep gravitating to those states despite their not-so-business friendly climates and their high tax rates. The five states with the highest populations also have the top five gross domestic product rankings.

Even when you look at per capita productivity, while those five states are not all in the top five, they still have a higher GDP per capita rate than Indiana — except Florida; its status as a haven for retirees doesn’t help with this data point.

In Forbes’ 2016 ranking of best states in which to do business, Indiana ranked 13th. The criteria for this ranking were business costs, labor supply, regulatory environment, economic climate, growth prospects and quality of life. What brought Indiana’s score down were its labor supply ranking (45th) and its status for economic climate (23rd) and growth prospects (22nd).

Still, another such ranking from CNBC last year placed Indiana at No. 16, despite the state ranking No. 1 for cost of doing business and infrastructure. Among the 10 ranking criteria used for this list, what lowered the Hoosier state’s ranking was its place for quality of life (45th), the quality or education and educational opportunities (29th) and the quality of its workforce (36th).

The fact is, a ranking doesn’t say too much.

The methodologies and criteria change. Some argue that you can always find facts to support your opinion — look at what we’re able to do with this piece here. And, if you can’t find the facts you need to support your opinion — you really should start reevaluating your opinion.

Data points are just that, they are points within a complex picture.

Even with the high ranking based on limited criteria by Chief Executive magazine, the editors noted that in spite of Indiana being a pro-business state with predictable policies, it “fails in healthy living statistics and is perhaps too conservative on social issues.”

Such rankings are interesting but we shouldn’t celebrate a high ranking too much because it often doesn’t tell the full story.

That said, how other people view our state is important. Perception is everything.