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Perspective | Top state for business, middle state for child well-being

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When CNBC ranked North Carolina the “top state for business” in 2022, it set loose a flurry of local headlines, commentaries, and breaking-news on TV. When the 2022 Kids Count Data Book placed North Carolina 34th among the states in “child well-being,” it barely created a news ripple.

Both rankings are based on multiple data points, with education an integral factor in each set. Together, they contribute to charting how far North Carolina has come, and how far it still has to go.

“A massive upheaval in the U.S. economy — including severe worker shortages, historic inflation and wrenching social unrest — is changing the very definition of competitiveness, and what it means to be a great state for business,” says the CNBC report.

CNBC, a national online and cable network, graded the states on 88 metrics divided into 10 broad categories. States received grades on such standard economic development factors as transportation infrastructure, tax breaks and incentives, and “business friendliness.” CNBC also measured states on child care resources and public health, along with “inclusiveness in state laws, including protection against discrimination of all kinds, as well as voting rights.”

North Carolina got its highest rankings in the categories of access to capital, technology and innovation, and a general “economy” mix of state budget picture, credit ratings, and job growth. The state’s lowest rankings came in cost of living, cost of doing business, and life-health-inclusion.

In its methodology, CNBC weighted workforce quality to represent 16% of a state’s total score and education 7% — while clearly some link exists between education and workforce development.

“With the search for talent expanding to include employees with marketable, industry-recognized skills,” says the CNBC report, “we measure each state’s community college and career education systems. We also look at multiple measures of K-12 education including test scores, class size and spending. And we look at life-long learning opportunities in each state.”

In its use of 88 metrics, the CNBC rating system makes the key point that economic development requires an intricate blending of private-sector decisions and government policies, both short-term and long-term. Tax rates and budget reserves matter, and so do sustained investments in educational quality, access to health care, and research.

North Carolina did not suddenly leap to No. 1 in 2022 simply as a result of tax cuts and tight budgets enacted by the Republican-majority legislature since 2011. CNBC had ranked North Carolina No. 5 in 2007, No. 4 in 2010, No. 3 in 2011, No. 5 in 2016. In its much-watched rankings, Site Selection magazine placed North Carolina No. 1 in 2021. In fact, the state had ranked No. 1 for the six years from 2005 to 2010.

While it still uses tax incentives to recruit big businesses, North Carolina has spent a half a century turning away from the old-style selling of the South as a region of cheap labor, cheap land, and cheap government. And yet, as the Kids Count report shows, the state has not fully overcome its legacy of leaving too many young people behind in its grasping for growth.

In the 33rd edition of Kids Count Data Book, the Annie E. Casey Foundation spotlights “anxiety and depression at unprecedented levels” in the wake of the outbreak of COVID-19. It terms mental health issues facing children and their families a “pandemic atop a pandemic.”

The national survey of children’s health shows, the data book reports, that the percentage of children, ages 3 to 17, who had anxiety or depression rose from 9.4% in 2016 to 11.8% in 2020 — a 25% increase. North Carolina went from 7.6% to 11.3% — a 48% increase.

The Kids Count report graded states on 16 metrics, four each in four broad categories, between 2016 and 2020, the pandemic having disrupted collection of more recent data. Nationally, the foundation found improvement in 10 of 16 metrics. “Overall, the positive strides in some areas of child well-being, driven by effective policies, provide encouragement that the nation can advance the substantial work needed to improve the prospects of its youngest generation,” says the report.

In the Kids Count report, North Carolina ranks 34th in overall child well-being — 31st in the economic category measuring poverty and employment, 36th in health, 34th in family and community, and 21st in education.

To read the CNBC report, along with news accounts of North Carolina’s success in recruiting businesses bearing high-quality jobs, is to sense a state on a roll. To read the Kids Count Data Book, in contrast, is to be reminded that the state’s roll doesn’t extend to many of its vulnerable people and places.  

Ferrel Guillory

Ferrel Guillory is a founder and serves on the board of directors of EducationNC.