By Erik Lukens
Oregon Business & Industry
as featured in Oregon Transformation Newsletter,
Every summer, CNBC releases a widely followed business-climate ranking. America’s Top States for Business, as it’s known, gives each state an overall ranking, as well as rankings in 10 categories, from cost of living to quality of life. For nearly every year but one between 2010 and 2019, Oregon’s overall ranking stood in the top half of all states. And, as recently as 2018, Oregon was ranked 18th.
But things have changed – rapidly. In 2024, Oregon slipped to 28th. And this year, the state tumbled 11 places to 39th.
CNBC does rate Oregon well in some areas, including technology and innovation (14th) and quality of life (19th). But these strengths are counterbalanced by low scores elsewhere, including cost of living (45th), the cost of doing business (43rd) and – lowest of all – business friendliness (47th).
Oregon’s fall may have come as a surprise to many people. State business leaders are not among them. In fact, the problems CNBC highlights echo the things business leaders have described for years. That’s why CNBC’s rankings will seem familiar to anyone who’s read Oregon Business & Industry’s Oregon Competitiveness Agenda, which we released in advance of the 2025 legislative session. Our report identifies three problems that must be addressed to encourage business investment in Oregon:
- Oregon is an expensive state in which to live and operate a business.
- Oregon creates unnecessary obstacles to opportunity and success.
- Oregon’s political culture undervalues the state’s private sector.
My purpose in pointing to these problems and to the national attention they’ve received is not to say “we told you so” or to engage in gratuitous criticism. It is, instead, to help address them. Like any other state, Oregon needs a healthy private sector to provide good jobs, to support philanthropic activity, and – not least – to generate the tax revenue upon which the public sector relies.
Unfortunately – if not surprisingly – Oregon’s economic performance has tracked its faltering reputation as a place in which to do business. Between January 2022 and August 2025, according to the Federal Reserve Bank of St. Louis, employment growth in Oregon (3.6%) trailed the nation (6.3%), as well as neighboring states Washington (5.2%), Nevada (7.8%) and Idaho (9.2%). Of Oregon’s neighbors, only California (3.1%) has struggled more. Meanwhile, the state economist has pointed to, on multiple occasions, Oregon’s manufacturing recession and worried aloud about its stagnating population.
Improving Oregon’s competitiveness will require bold action by legislators and the governor, beginning with a commitment to economic development and a willingness to revisit policies that have tarnished the state’s reputation and stunted its growth. Because such an effort will require a basic understanding of underlying conditions, OBI in September released the Oregon Scorecard, a collection of web pages that contain data, rankings and other information that sheds light on Oregon’s business climate and economic performance. Information is organized in four categories: business climate, quality of life, economy and employment, and government and education.
For most data points and rankings, the Oregon Scorecard provides a chart showing up to 20 years of historical information. Charts also include information sources, allowing users to verify data and explore further on their own.
OBI will update the Oregon Scorecard throughout the year as new information becomes available.
What do the data show? I will acknowledge first that many factors influence Oregon’s economic performance, including plenty that are not reflected by the Oregon Scorecard. Still, there is an identifiable trend. Between the Great Recession and about 2019, Oregon generally outperformed the U.S. in many categories, including GDP growth rate, overall employment growth, and private-sector employment growth. Beginning in roughly 2020, however, Oregon began to trail the nation – sometimes badly – in many of these same categories. Oregon’s competitive slump is not new.
The Oregon Scorecard also highlights the effects of policy changes that have eroded the state’s competitiveness. Oregon has contended for many years with a handful of well-known competitive disadvantages, including high personal income tax rates, high housing costs, a generally high cost of living and doing business, and public schools that underperform on nationwide assessments. At the same time, however, the state also enjoyed a number of competitive advantages, including the lack of a sales tax, a generally low business tax burden, and inexpensive electricity.
In recent years, Oregon has done little to address its longstanding competitive disadvantages. Several of them, in fact, have declined further. Meanwhile, tax and regulatory policies have chipped away at the state’s competitive advantages. Oregon’s commercial and industrial electricity prices have moved the state closer to the middle of the national pack. And the 2019 adoption of the corporate activity tax immediately eliminated the state’s corporate tax-burden advantage. Since 2020, Oregon’s corporate tax burden has been above the national average when it used to fall well below it.
In March, Business Oregon – the state’s economic development agency – released an eye-opening report produced by the University of Oregon. Its purpose was to gauge the success of efforts in other states to recruit Oregon businesses. Roughly a quarter of businesses surveyed said they had been approached by recruiting agencies outside of Oregon. And of this group, an astounding 68% reported moving or expanding outside of the state. A Business Oregon economist later called this “just an insane success rate for recruitment efforts.”
The report identified several factors pushing businesses into the arms of competing states. They include Oregon’s regulatory climate, its taxes and tax policies, and its business climate. To improve Oregon’s competitiveness – and its economic performance – policymakers must begin with these.
OBI’s Oregon Scorecard uses a sports metaphor for the same reason the Tax Foundation calls its annual report the State Tax Competitiveness Index. It’s an acknowledgement that states compete with one another for business investment. Many other states have worked in recent years to improve their tax and regulatory environments even as Oregon’s have eroded.
To use one more sports metaphor: Oregon policymakers cannot sit on the sidelines while the economy continues to struggle. They need to join us in acknowledging and accepting that there’s a problem, they need to do no more harm, and then they need to prioritize policy improvements that can lead to real economic and business development (i.e., job creation).
Only then can we once again see the necessary growth in business investment, job creation and personal incomes that underpin prosperity, philanthropy and tax revenue.
Erik Lukens is the communications director for Oregon Business & Industry.
Disclaimer: Articles featured on Oregon Report are the creation, responsibility and opinion of the authoring individual or organization which is featured at the top of every article.