California's Government Policies Causing Exodus of Skilled Workers and Capital
We’ve written before about the efforts of Texas Gov. Rick Perry to lure California businesses to his state, which elicited a scatological response from Gov. Jerry Brown. Relocation expert Joseph Vranich, who has done such a good jobassembling the list of California firms leaving the state, has a revealing column chronicling a further list of governors poaching in the Golden State, including Iowa’s Terry Branstad, Pennsylvania’s Tom Corbett, South Dakota’s Dennis Daugaard, and NJ’s Chris Christie, among others. Brown’s reaction has been typically colorful. He even called Iowa “the cold, empty and desolate hinterlands.” Brown’s attitude is reflective of a larger feeling within California’s governing elite which can’t imagine firms leaving the state for anywhere else. But the numbers say something else.
But if a state is a net loser in job migration, it tells you something about the overall economic and business climate of the state, which also influences decisions by existing firms and entrepreneurs on whether to invest locally in new jobs. That’s why states that are net losers in job migration also tend to rank poorly compared to other places in new jobs generated by in-state firms.
As Vranich points out, California is now consistently rated by executives as one of the worst places to do business, mostly recently by Chief Executive magazine, where one executive observed that, “California is getting worse, if that is even possible.” Another tipped his hat to one of the state’s advantages, observing that, “California has the best labor pool,” but then he added, “and the worst government.”
People, of course, follow jobs, or maybe jobs follow people. Either way, California is also a net migration loser of people and capital these days.
Steven Malanga, of the Manhattan Institute, is City Journal’s senior editor, a Manhattan Institute senior fellow, and a RealClearMarkets.com columnist. He is author of the recently published Shakedown: The Continuing Conspiracy Against the American Taxpayer, about the bankrupting of state and local governments by a new political powerhouse led by public-sector unions. He writes about the intersection of urban economies, business communities, and public policy. He was recently cited as one of Governor Chris Christie’s intellectual influences (BusinessWeek, August 2010). This article originally appeared in PublicSectorInc. and is republished here with permission.