Scorecards downplay quality-of-life value

Posted: Friday, August 5, 2016 12:05 am
Providence Business News
DOUGLAS J. HALL Guest Column

Each year, several organizations roll out “scorecards” measuring what they think are the important indicators determining whether state taxes are too high or too low, the health of state economies, or how “business friendly” each state is.

For those living and working in the Ocean State, these indicators matter, but far less so than the overall quality of life, including the quality of the schools, the accessibility of high-quality health care and child care, safe and vibrant communities, and public amenities such as parks and libraries.

Too often, such considerations are little more than footnotes that too often conflate rankings on a business-focused ranking with how well the state is doing overall. (For instance, CNBC’s recent ranking of “America’s Top States for Business” allots just 13 percent of total available points for its quality-of-life measure, which includes factors “such as the crime rate; inclusiveness, such as anti-discrimination protections; the quality of health care; the level of health insurance coverage and the overall health of the population … local attractions, parks and recreation [and] environmental quality.”)

For Rhode Island decision-makers, the constant drumbeat of skewed rankings is an unhelpful distraction from the things that matter to the broader public, and ironically, feed into a negative spiral that turns those rankings into self-fulfilling prophecies. Does anybody think that the constant hand-wringing over dismal rankings will make businesses want to flock to Rhode Island? “Come to the Ocean State. Please ignore our string of rankings in the bottom five nationwide.”

The “Jobs and Opportunity Index” utilized by the Rhode Island Center for Freedom and Prosperity illustrates one of the other very common shortcomings of such indices – a reliance on mathematical calculations that combine indicators in ways that are, at best, difficult to justify. Their index has three factors: a job-outlook factor, a freedom factor and a prosperity factor.