How workers are the new weapon as states battle for business 

Increasingly, Wisconsin is looking out of state as well, targeting millennials — especially educated professionals — in Chicago. Unemployment in metropolitan Chicago is also low, but at 3.4 percent in May, it is at least higher than in Wisconsin.

“Obviously, the Chicago market is close to us, and it has the capacity and the potential to draw workers from,” Braun said.

So Wisconsin has mounted a $1 million advertising campaign in the Chicago area — part of nearly $7 million that the state has earmarked for regional marketing — including ads on trains and buses, social media posts, as well as TV commercials pitching the quality of life in Wisconsin. The state outperforms Illinois on several measures of quality of life, including crime and air quality. It also offers a lower cost of living.

One commercial shows a young Chicago mother rushing home from work, only to find her young child already in bed.

“Make bedtime or make playtime,” an announcer asks. “In Wisconsin the average commute time is 22 minutes.”

The state has yet to say whether the campaign has made a dent in the worker shortage, but some transplants were sold long ago. Patrick Cunningham, a senior account executive with Datica, a health-care software start-up, made the move to Madison from Chicago three years ago and said he has not looked back.

“From a pure dollars-and-cents perspective, I’m able to earn money, save money and grow our financial well-being at the same time as actually growing our family,” he said.

He also admits to having some preconceptions about Wisconsin before he thought about moving.

“Beer and cheese, farming maybe. That’s all people think of,” he said.

Braun said one of the aims of the ad campaign is to dispel those ideas. But she said state officials realize that poaching talent from out of state will only go so far in alleviating the shortage. The key is growing more talent at home.

“Now the conversation is less about a skills gap and more about a people gap,” she said.

CNBC Special Correspondent Scott Cohn will reveal the winners and the losers in our 12th annual rankings of America’s Top States for Business live on “Squawk Box,” Tuesday, July 10. For full coverage of this year’s study, you can visit CNBC.com.