Writing at RealClearMarkets, Steven Malanga of the Manhattan Institute examines the consequences of government regulations and policies in California that have made the state a high-cost place to do business. Malanga pegs the column to a recent visit to Texas by California state legislators and Lt. Gov. Gavin Newsom to investigate how the Lone Star State has done so much better in job creation than the Golden State.
One theme is obvious and persistent when you peruse dozens of stories on California companies that have pulled up stakes in the past few years: Many are going somewhere else to lower costs, whether it’s a shipping company moving HQ jobs from Oakland to Phoenix, or a software maker leaving North Hollywood for Austin, or a visual effects studio leaving Venice, Ca., for Port St. Lucie and Vancouver.
Some firms also say they are leaving because California’s state and local budget crunch has made government voracious. LegalZoom, the online company, is leaving Los Angeles for Austin because of a lengthy dispute with city government over taxes. One thing that sealed the move: When the firm’s 400 employees heard the company was contemplating leaving, some began asking to relocate. Meanwhile, Creators Syndicate, the media syndication company, has also contemplated leaving because of a dispute over taxes with the city of Los Angeles that prompted an official of the company to accuse the city of operating like a “banana republic” and its bureaucrats of acting like “Stalin’s apparatchiks.”
And for all the state’s emphasis on “green jobs,” companies that manufacture environmentally oriented products are escaping California, as well.
Malanga accurately analyzes the problem, and Jack Stewart, president of the California Manufacturers and Technology Association, offers a solution. In a new column, “Texas Trip Confirms: California Needs a Plan to Create Jobs,” Jack argues: (continue reading…)