Companies have been fleeing to low-tax states. Here's why that may be bad news for workers

Corporations are not afraid to pick up and move.

Many states are offering companies enticing incentives like lower taxes if they move their operations, but a superior business climate doesn't always equate to a superior working climate.

“Things that benefit employers when it comes to their bottom line or their margin, in terms of economic expansion, they can directly conflict with things that benefit actual employees and residents and workers,” said Niani Tolbert, founder and CEO of Hire Black Now, an organization that merges 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 also have been passing controversial social policies that some businesses and the general public have pushed back on. Those issues include LGBTQ restrictions, limiting voting access, abortion restrictions and preventing schools and employers from holding diversity and inclusion trainings.

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 are in the South, almost always. And in 2021, that was no different,” said Kaitlyn Henderson, senior researcher at Oxfam America. 

A partisan divide has formed around labor policies. Democrats are more likely to pass the sorts of policies that Oxfam America tracks in its best states to work list such as higher minimum wages, pregnancy accommodations in the workplace and policies that protect the right to unionize.

But the states with the best policies for workers, according to Oxfam America’s analysis, also tend to be the states with the highest cost of living.

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 workers are looking for when they think about considering different employment opportunities and that companies have to consider when they're 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 learn which states are the worst for workers and how companies in those states can attract top talent.