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Business Facilities Names Montana #1 State to do Business

by: Matt Singer

Fri Aug 24, 2007 at 12:45:55 PM MST


How do they measure? A combination of tax climate, business costs, economic climate, labor force, and quality of life.

Some of this is a bit tautological. Based on booming business in Montana, this mag is extrapolating that Montana is a place where business will perform well.

Meanwhile, it's worth noting that the Montana Chamber is concerned about a "shortage" of labor. Labor shortages are mythical, at least in the larger sense. Rather, there is sometimes a shortage of qualified labor at the price that capital wants to pay. Tough, that's life.

What Montana is witnessing, though, is a precarious situation where skyrocketing living costs are finally making the "scenery tax" impact both wages and living costs -- and are squeezing out low-income workers (or, in some cases, leading to demands for better compensation).

To a large extent, what we have in Montana for employees isn't so much a wage problem, it's a cost-of-living problem. And now is as good a time as any to start some conversations about making costs more manageable -- whether it is housing, health care, or student debt. Reducing costs in smart ways will make lower wages more liveable and will remove some labor market tightness -- and it will do it in a way that helps employers and employees.

Matt Singer :: Business Facilities Names Montana #1 State to do Business
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Wages should respond to a tight labor market and they have.  Growth in wages between 2005 and 2006 was 5%, the highest level in the last ten years.  Why then does our unemployment rate remain so low?  The wage incentive should have been enough to draw in new workers and keep business saturated with applicants?

The point that keeps being missed is that Montana is an older state and it will get older.  Workers are leaving the labor pool and not being replaced.  Older citizens are demanding services which cannot be provided because we lack the workforce.

Does the state face issues related to rising costs? Yes. Housing, medical, and living expenses will impact the population, but they are not to blame for this situation.  Workers are not opting out of the market because the costs of these goods are too high.  These costs will be high no matter where you live in the US. 

The only option available to individuals when faced by these expenses is find employment, take a second job, or demand higher wages.  Opting out of the labor maker will only make the problem worse.

Not moving in or moving out are also options (0.00 / 0)

[ Parent ]
Are you proposing... (0.00 / 0)
a wall or just limiting the freedom to live where you want. Either of those sounds scary to me.

Neither (0.00 / 0)
I'm suggesting that people who face low wages and high cost of living would be foolish to not consider moving and that the Montana business community, confronting wage inflation, should perhaps consider ways to lower cost of living to make it easier to live here, thus improving the labor market for themselves.

[ Parent ]
Two problems (0.00 / 0)
1. You assume that moving to another area will provide lower cost of living and employment opportunities.  I am not sure that this is possible. 

2. I don't think businesses have as much control over their costs you do.  If they cut prices they will be forced to cut their profits or eliminate some of the costs associated with doing business

I'm not talking individually (0.00 / 0)
1. Moving can definitely provide a lower cost of living (Hysham is rather affordable, I understand). For some people, it could probably also provide employment opportunities. Less likely than changing outflow tide, though, is causing more of an inflow of workers if they could enter the labor market here more easily -- housing can be prohibitive.

2. I'm talking about public policy. There are things that governments can do to make affordable housing and transportation a reality, same with health care. You and I may disagree about those steps, but I think even you agree with that concept in principle.

[ Parent ]
Perhaps (0.00 / 0)
1. I do not think that moving to more rural areas of MT will provide any economic gains on the whole.  Jobs are few and though some costs maybe lower, the hidden costs of living there, i.e. trasportation, increased food costs, lack of access to entertainment, medical care, more than make up the difference.

2. Government can make housing more affordable, for some people, not all.  That is the problem with targeting, some will benefit, while the rest will pay.  If an area wishes, as whole, to make this choice then so be it.  But when a few individuals decide to target a group in order to aid them, then I think problems will arise.

I do not see transportation as an issue in this discussion, but I have never had an issue with government providing roads or mass transit. 

Health care should not be provided by the government.  I know that this is the new crusade, but governments are inefficient at handling these things.  There are problems with our current system, but these can be fixed by the market.  We have restricted it so much that it is impossible to work in it present envioronment.  I am willing to pay for insurance for the few, i.e. kids, poor mother, the elderly, but I am not willing to pay for all citizens.

[ Parent ]
asdf (0.00 / 0)
1. Montana is not just competing against Montana for workers. We're competing with, well, the world. That's an exaggeration, but we're certainly competing with Denver, Seattle, and Minneapolis.

2. Even if you believe government getting out of the way can do these things, that's still an action to be taking. Regardless, housing costs are now a major recruitment problem for MSU. I'd imagine other Bozeman businesses face the same issue. The discussion of private v. public health care is an interesting topic, but it's not the one I'm discussing here.

[ Parent ]

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