“Businesses Are Fleeing California Along With Its Residents, And President Biden Should Pay Attention” That’s the strong headline that Forbes attached to its story about the Hoover Institute’s report entitled, “Why Company Headquarters Are Leaving California in Unprecedented Numbers,” issued a few days ago.
A few excerpts:
“A new study finds that business headquarters are also leaving California, and at an increasing rate. Economist Lee Ohanian of the Hoover Institution at Stanford University and Joseph Vranich, president of the site selection consulting firm Spectrum Location Solutions, collected data on the relocation of California business headquarters from January 2018 to June 2021. . . they documented 272 [corrected number] headquarters relocations over the three-and-a-half-year period, or an average of six relocations per month.”
“More worrying for California than the actual number is the trend. There were more relocations in the first half of 2021—74—than in all of 2018 or 2020, and the monthly average in 2021 so far—12—is double the overall average of six. So, while reported relocations slowed down during the pandemic, they are accelerating as the economy reopens. It’s unclear whether this is the new normal, but it’s not a good sign for California.”
Why include President Biden in the headline? The writer, Adam A. Millsap, explains:
“While this study focuses on California, it has national implications. For the last decade, businesses and people have been leaving California for other states, particularly Texas. In other words, they have been voting with their feet for the public policies that have made Texas affordable for residents and a great place to run a business.”
“If we want America to remain as attractive on the international stage as Texas is on the national stage, we should adopt policies that make us more like Texas and less like California. Unfortunately, the Biden administration and Congress are trying to turn the country into California, complete with higher taxes, more regulation, and higher prices via green energy mandates and inflation.”
“America has had the strongest, most dynamic economy in the world for the last 80 years, but economic success is not guaranteed. The wrong public policies slow innovation, deter new business formation, and repel talented workers. Just look at California.”
Added note from Joe:
Governor Gavin Newsom, fighting a recall in the September 14 election, is unlikely to receive votes from business owners because he has done nothing to ease the offensive tax and regulatory burdens that afflict companies of all sizes. A keen observer of California politics just said to me: “Newsom’s backing comes from public employees, billionaire tech oligarchs, green non-profits and cultural warlords – none of them have any interest in the broad economy.” I believe if Gov. Newsom remains in power, we will see companies leave California at an even faster pace.)
Read the complete Forbes story here.
For the full Hoover Institution report, go to Why Company Headquarters Are Leaving California in Unprecedented Numbers.
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