Saturday, November 26, 2011

Killing Jobs in California

It’s good to take a cold hard look at the way blue state policies of taxation, regulation, litigation, and unionization stifle job creation.

Most of us have little doubt about the effects of such policies. Still, it is good to be able to see it in action.

Among other things, it shows us how the current administration, following the California way, has been killing jobs and stifling economic growth.

From time to time I have cited Joel Kotkin’s work about California. Since Kotkin is, I assume, a Democrat, no one will accuse him of partisanship.

Today, I want to draw your attention to Steven Malanga’s extensive analysis of the California job drain. Malanga wrote his article the City Journal, a more right-of-center publication. It was reprinted in the Wall Street Journal this morning.

In Malanga’s words: “Last year, a medical-technology firm called Numira Biosciences, founded in 2005 in Irvine, California, packed its bags and moved to Salt Lake City. The relocation, CEO Michael Beeuwsaert told the Orange County Register, was partly about the Utah destination's pleasant quality of life and talented workforce. But there was a big ‘push factor,’ too: California's steepening taxes and ever-thickening snarl of government regulations. "The tipping point was when someone from the Orange County tax [assessor] wanted to see our facility to tax every piece of equipment I had," Beeuwsaert said. ‘In Salt Lake City at my first networking event I met the mayor and the president of the Utah Senate, and they asked what they could do to help me. No [elected official] ever asked me that in California.’

“California has long been among America's most extensive taxers and regulators of business. But at the same time, the state had assets that seemed to offset its economic disincentives: a famously sunny climate, a world-class public university system that produced a talented local workforce, sturdy infrastructure that often made doing business easier, and a history of innovative companies.

“No more. As California has transformed into a relentlessly antibusiness state, those redeeming characteristics haven't been enough to keep firms from leaving. Relocation experts say that the number of companies exiting the state for greener pastures has exploded. In surveys, executives regularly call California one of the country's most toxic business environments and one of the least likely places to open or expand a new company. Many firms still headquartered in California have forsaken expansion there. Reeling from the burst housing bubble and currently suffering an unemployment rate of 12 percent—nearly 3 points above the national level—California can't afford to remain on this path.”

Need I say more.

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