The biggest threats to Californian jobs aren't across the ocean, they're right next-door.

"Workman's comp is a big issue, but it's just one of many items," Monia said, rattling off a list of California's comparatively high operating costs: energy, rents, labor, taxes. "Even the garbage costs are cheaper in Nevada." ...

The exodus of businesses and jobs to lower-cost states like Nevada has picked up in the last year, experts say. Now, with the economy gaining steam, many companies are nearing a point where they must decide whether to expand in California or invest and create jobs elsewhere.

Many have already made up their minds. In a recent survey for the California Business Roundtable, consultants reported that nearly 30% of 50 California companies interviewed had explicit policies to move jobs out of state if possible. And half said they planned to avoid adding jobs in California. Some cited high housing costs, others the widening gap between operating expenses in California and other states.

Sacramento can can loosen some expensive regulations and risk the ire of its leftist residents (while pleasing the more conservative people in the rest of California), but it will have trouble matching the financial incentives offered by neighboring states. Corporate taxes are used to pay off special interests, so the leftist legislature can't risk that revenue stream without losing the money they need to buy votes. There isn't much money available to lighten the burden on businesses without cutting spending, which would also alienate the voters who keep our rulers in power.

It shouldn't be surprising that the state with the most natural benefits (weather, resources, size, location) is also the most inefficient. We can treat businesses (and people) poorly and they'll still find reasons to live here... up to a point. I think we're nearing that point now, and our government had better wise up.



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