How California Drives Away Jobs and Business
The Golden State continues to incubate cutting-edge companies
in Silicon Valley, but then the successful firms expand elsewhere to avoid the state's tax and other burdens.
California has long been among America's most extensive taxers and regulators of business. But it had assets that seemed to offset its economic disincentives: a sunny climate, a world-class public university system that produced a talented local work force, sturdy infrastructure that often made doing business easier, and a record of spawning innovative companies.
No more. In surveys, executives regularly call California one of the country's most toxic business environments, while the state has become an easy target for economic development officials from other states looking to lure firms away.
In a 2004 survey of California executives by the consulting firm Bain & Company, half said they planned to halt job growth within the state. By 2011, according to a poll by a California coalition of businesses and industries, 84% of executives and owners said that if they weren't already in the state, they wouldn't consider starting up there, while 64% said the main reason they stayed was the difficulty of relocating their particular kind of business. For several years in a row, California has ranked dead last in Chief Executive magazine's poll about states' business environments.