Why the Best States for Business Might Be the Worst for Employees

Companies are not afraid to pick up and move.

Many states offer companies tempting incentives such as lower taxes if they relocate their operations, but a superior business environment does not always equate to a superior work environment.

“Things that benefit employers when it comes to their profit or their margin, in terms of economic expansion, can directly conflict with things that benefit the actual employees and residents and employees,” said Niani Tolbert, Founder and CEO from Hire Black Now, an organization that combines recruiting and talent development to improve the upward mobility of black women in the U.S. workforce.

Many of the states with the most attractive business incentives have also adopted controversial social policies that some businesses and the general public have reversed. Those issues include LGBTQ restrictions, restricting voting access, abortion restrictions, and preventing schools and employers from providing diversity and inclusion training.

Anti-poverty organization Oxfam America’s annual Best States to Work Index analyzes which states have the best policies to protect workers.

Oxfam America ranked North Carolina, Mississippi, Alabama and South Carolina as the worst states for workers in 2021.

“Every year, the worst states to work in are in the South, almost always. And 2021 was no different,” said Kaitlyn Henderson, senior researcher at Oxfam America.

A partisan divide has developed around labor policy. Democrats are more likely to approve the kinds of policies Oxfam America follows in its best states to work, such as higher minimum wages, maternity accommodations in the workplace, and policies that protect the right to unionize.

But the states with the best employee policies are also often the states with the highest cost of living, according to Oxfam America’s analysis.

Oxfam America ranked Oregon, New York, Massachusetts and California as some of the best states for workers’ rights, but CNBC’s 2022 Top States for Business Index found those states also have some of the highest cost of living in the country.

“There are a number of things that employees look for when they think about different employment opportunities and companies need to consider when recruiting talent for jobs,” said Rachel Lipson, director of the Project on Workforce at Harvard University. “We’re still in a very tight labor market where workers still have a lot of power and the ability to be picky.”

Watch the video above to see which states are the worst for workers and how companies in those states can attract top talent.

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