For the 10th year, Georgia is the country’s “top state for business.” Here’s the story behind the superlative.
When he delivered his State of the State address last month, Gov. Brian Kemp made a boast that, by now, might ring familiar. For the 10th year in a row, Georgia has been ranked the “top state for business,” Kemp said, continuing: “New jobs are headed our way on a daily basis, existing businesses are looking to expand, and companies all over the world look to the Peach State to locate their next headquarters.”
“Top state for business” isn’t just generic rhetoric—it’s an annual designation bestowed by Area Development magazine, the publication for corporations trying to decide where to locate headquarters, regional offices, factories, and the like. (Representative article: “Future-Proofing Food & Beverage Facilities: Why Site Selection Matters.”) This is a competition in which the South tends to clean up. Just behind Georgia in the 2023 rankings are South Carolina, Tennessee, and North Carolina, and the top 10 also includes Alabama, Texas, Virginia, and Mississippi.
But what does it actually mean to be good for business? Part of the reason the South excels here is because the region has weak labor laws, low wages, and low rates of unionization, all of which add up to another, less pleasant superlative: The nonprofit Oxfam, which fights against poverty and inequality, ranks Georgia 50th on a list of 2023’s best and worst states to work. Here’s a look at the discrepancy.
What goes into the “best for business” designation?
Georgia comes in at number one in half of the 14 criteria on which Area Development ranks states. First let’s cover the categories where we don’t dominate, though we’re still near the top in most: “available real estate,” “corporate tax structure,” “site-readiness programs,” “favorable regulatory environment,” and “speed of project permitting.” There’s also “water availability,” an increasing concern in the climate era, and “access to capital and funding.” The latter is the only category in which several typically Democratic-led states come out ahead; there’s a lot of investment money in California and New York.
Some of the places where Georgia comes in first are straightforward: “Logistics and infrastructure” is easily explained, given our centrality within the overall southeastern region, the fact that Atlanta has one of the world’s busiest airports, and the bustling vitality of the ports at Savannah and Brunswick. We also come out on top for “energy availability and costs,” which reflects not just the plentiful and affordable energy available here but also, Area Development notes, specific energy efficiency and “business advisory services” offered by Georgia Power.
What else does Georgia have going for it?
A couple of interrelated areas in which the state excels are “workplace training programs” and “competitive labor market.” One big reason for this is Quick Start, a well-regarded program through the Technical College System of Georgia that rapidly trains workers—at no cost to “any qualified company”—based on the needs of potential employers. When Quick Start launched in 1967, part of the idea was to lure manufacturing away from the Rust Belt—the northern states, clustered around the Great Lakes, where the steelmaking and auto manufacturing industries were concentrated—and to diversify Georgia’s largely agricultural economy. In the 1980s, it trained workers for businesses like Ford, Lockheed, and Gulfstream.
Right now, a lot of that training activity—like a lot of economic activity in Georgia generally—revolves around clean energy. The electric vehicle company Rivian is building a $5 billion factory east of Atlanta that’s expected to employ about 7,500 people; Hyundai plans to start producing EVs and EV batteries at its own $7.6 billion factory outside of Savannah by early next year; and, in North Georgia, folks who once worked for the Dalton carpet industry have been retrained through Quick Start to work at a plant that produces solar panels.
Another thing these companies have in common: None of them is unionized. But there is some movement in that direction, particularly in the vehicle industry. Emboldened from striking, and winning, against the Big Three carmakers, United Auto Workers has embarked on a push to organize factories in the South, a region traditionally hostile to unionization. UAW president Shawn Fain has made clear that EV companies and battery plants are on his radar: “We’ve said for months, ‘We refuse to allow the EV transition to become a race to the bottom,’” Fain remarked last fall. “Corporate America is not going to force us to pick between good jobs and green jobs.”
“We refuse to allow the EV transition to become a race to the bottom. Corporate America is not going to force us to pick between good jobs and green jobs.” — Shawn Fain, United Auto Workers president
But worker training wasn’t the only reason Rivian ended up here, right?
Well, no. See also the $1.5 billion package of tax credits and other enticements offered to the company. It’s not just the largest such package Georgia has ever given to a single corporation—it’s the largest incentive deal ever offered to an automaker in the U.S. That brings us to another category in which Georgia comes in at the top of Area Development’s rankings: “business incentive programs.”
The Rivian deal hasn’t been without critics: Residents of Morgan County, where the vehicle plant will be located, sued to block the incentive package, though their efforts came to an end last fall when the Georgia Supreme Court declined to hear an appeal on the case. And in 2022, the Center for Economic Accountability, a Michigan-based nonprofit, named the Rivian deal the “Worst Economic Development Deal of the Year,” described by CEA president John C. Mozena as a “massive, speculative investment of taxpayer money in an early-stage company in a highly competitive and government policy–dependent industry without doing basic due diligence.”
“They made a massive, speculative investment of taxpayer money in an early-stage company in a highly competitive and government policy-dependent industry without doing basic due diligence.” — John C. Mozena, Center for Economic Accountability President
Good deal for Rivian, though, huh?
Exactly. And, not unrelated, Georgia comes out at the top of the Area Development rankings in the “overall cost of doing business” category, reflecting not just the generous corporate incentives, workplace training, energy costs, and so on, but also the tax situation for corporations generally. “It certainly doesn’t hurt to have a low corporate tax rate that hasn’t risen in many decades, and even dropped a quarter point a few years back,” the magazine wrote. That’s a reference to legislation that went into effect in 2019 reducing the top tax rate, for both corporations and individuals, from 6 percent to 5.75 percent. (In Minnesota, which has the country’s highest corporate tax rate, the number is 9.8 percent.) This brings us to one last category.
Which is . . . ?
“Cooperative and responsive state government.” Explaining why Georgia does so well in this regard, Area Development mentions some of the above details—incentives, training, etc.—in addition to “fiscal responsibility, lack of regulatory hassle, willingness to lift the bottom line, plus workforce investments.” As an example of our continued efforts in this regard, legislators have kept trying to further lower the corporate tax rate, even after the 2019 cut. Of course, this all begs the question of who or what the state is responsive to: namely, employers, business owners, and corporate executives.
Another example of Georgia’s legislative friendliness to business is the state’s “right to work” law, which means that employees covered by a union contract don’t have to be dues-paying members of that union. Proponents say this keeps anyone in a workplace from being forced to join a union, but there are already federal protections in place to prevent that; the actual effect of this policy is to weaken unions by forcing them to represent nonmembers, thereby stretching their resources—so it’s in the interest of business to promote such legislation.
“Right to work” is a relic of the Jim Crow era, formulated at a time when southern legislators were trying to maintain workplace hierarchies, forestall unionization, and beat back campaigns for racial equality. One of its most important backers was a Texan named Vance Muse, characterized by his own grandson as “a white supremacist, an anti-Semite, and a Communist-baiter,” and who described his fears of unionization thusly: He feared that “white women and white men will be forced into organizations with black African apes whom they will have to call ‘brother’ or lose their jobs.”
One prominent opponent of this policy—which Georgia adopted in 1947—was Martin Luther King Jr., who said, “In our glorious fight for civil rights, we must guard against being fooled by false slogans, such as ‘right to work.’ It is a law to rob us of our civil rights and job rights. Its purpose is to destroy labor unions and the freedom of collective bargaining by which unions have improved wages and working conditions of everyone.”
“In our glorious fight for civil rights, we must guard against being fooled by false slogans, such as ‘right to work.’ It is a law to rob us of our civil rights and job rights. Its purpose is to destroy labor unions and the freedom of collective bargaining by which unions have improved wages and working conditions of everyone.” — Martin Luther King Jr.
How else is the state government “responsive” to business?
The anti-union push continues: In fact, there’s a Kemp-backed measure in the Georgia Assembly right now that, if passed, would make it even more difficult to organize in the state. The proposed legislation links Georgia’s business incentives to a prospective company’s union policies—preventing new businesses in the state from receiving incentives if they grant voluntary recognition to unions without going through a secret-ballot election.
That sounds complicated.
Let’s unpack it. Part of the unionization process is getting a sufficient number of workers in a company to sign authorization forms, basically just saying they want to be in a union. If 30 percent of employees give the thumbs-up, the request goes to the National Labor Relations Board, which orders an election by secret ballot. But if 50 percent of a workplace signs on, the company can skip the election and just go ahead and voluntarily recognize the union. (The lengthy and costly process of getting to a secret ballot can give outside parties—say, politicians—the opportunity to put pressure on workers not to unionize.) It’s this last path that Kemp and the Republican legislature are trying to block, in a move that reflects broader recent efforts backed by the American Legislative Exchange Council, a right-wing group that authors “model legislation” promoting corporate interests.
Recent events in our northern neighbor illustrate some of the stakes. When Tennessee passed a similar bill in 2023, the Center for Media and Democracy described it as a “direct counterpunch to Ford Motor Company’s decision to voluntarily recognize a union in Tennessee after the state awarded it $884 million in tax and other incentives in 2021 to build a new lithium battery plant there, which is expected to employ 5,600 workers.” The decision by Ford, CMD reports, “angered right-wing groups and legislators who take great pride in Tennessee being an anti-union state.”
Somewhat oddly, laws like Tennessee’s—and, possibly, Georgia’s—will put the state government occasionally at odds with actual, individual businesses that may be amenable to working with unions. Like Georgia Republicans’ 2021 feud with Delta Air Lines—which followed Delta, as well as Coca-Cola, expressing opposition to state legislation that made voting more difficult—it’s an example of conservative politicians going too far, too fast for at least some of their traditional constituents. Still, roadblocks to union organizing are indisputably a win for business owners in general.
Why’s that?
Because they get to pay their workers less. Last year, a U.S. Treasury Department report found that unions “serve to strengthen the middle class and grow the economy at large,” and a big part of the way they do that is through higher wages from employers—along with other concessions like better benefits and safer workplaces. Generally, employers can get away with paying lower wages in states without strong unions: According to the Economic Policy Institute, a nonpartisan think tank focused on low- and middle-income workers, unionization rates in Michigan declined faster than unionization rates nationally after that state passed right-to-work laws in 2012; wages, which had been higher than the national median, fell below it. (That legislation was repealed in 2023, making Michigan the first state in more than half a century to repeal its right-to-work-law.)
What does all this mean for Georgia’s workers, then?
The overall picture isn’t sunny. Just like Area Development magazine ranks friendly places to open or move a business, the anti-poverty organization Oxfam keeps a list of its own: “Best and Worst States to Work in America.” The group uses several different metrics for making this determination, falling into three general categories: wage policies (e.g., the minimum wage, but also the ratio of minimum wage to cost of living), worker protections (paid-leave policies, shift-scheduling practices), and rights to organize.
In 2023, Georgia came in at number 50. There’s no paid sick or family leave here. No heat-safety standards for outdoor workers. No state-level protections against sexual harassment. No collective bargaining for teachers. Right-to-work legislation. And, the state’s minimum wage is the same as the federal minimum—$7.25 an hour—with individual municipalities in Georgia barred from setting a higher number if they want to. Using MIT’s Living Wage Calculator, Oxfam notes that the $7.25 wage in Georgia amounts to just under 19 percent of the cost of living for a family of four with one adult working; a living wage under that scenario would be $38.44.
The good news? Oxfam includes the District of Columbia and Puerto Rico in its ranking, so though Georgia may have been in 50th place overall, it was not technically dead last. That distinction belonged to number 52: North Carolina.