Opinion: California fosters bad business climate
By Bradley R. Schiller
In its most recent annual ranking of “business friendly” states, Forbes magazine had some blunt advice for investors: “Utah and Colorado have maintained strong business climates. Forget about California.”
Californians like to dismiss such assessments of the Golden State and instead point to its natural beauty and quality of life. They tend not to worry what people in other states think. But they should. California is no longer the economic miracle it once was. Silicon Valley no longer has a monopoly on high-tech talent and innovation. Hollywood has to compete for movie locations with Utah and Morocco. Real estate investors see better development prospects in states with fewer foreclosed and abandoned homes. And SoCal porn producers know they don’t need huge wardrobe containers to move to Nevada.
Californians tend to be complacent about these competitive risks. On the surface, things don’t look too bad. Sure, the state’s finances are in shambles and the Legislature in disarray. But median personal income ($42,578) is well above the national average ($39,945).
These things can’t compensate for some disturbing recent trends. The growth of the state’s $2-trillion economy has slowed dramatically. Since 2000, the state’s economy has grown significantly more slowly than the rest of the nation. Last year, California ranked 34th in real GDP growth. That sluggish growth has burdened it with among the highest unemployment rates (10.9 percent) in the nation. If businesses heed Forbes’ advice to avoid the state, the situation will only worsen.
Bradley R. Schiller is a native Californian who lives in Lake Tahoe and teaches economics at the UNR. He is the author of “The Economy Today.”
If Measure B somehow passes in South Lake Tahoe, there will be more businesses closing or leaving.
“For starters, it’s very expensive to do business in the state. Corporate taxes are high, as are energy and labor costs”
It’s really interesting – an op ed using op ed as the basis of analysis – it isnt like Forbes is a neutral think tank. So we have the highest wages (that’s good right!) but that results in a higher cost of living and high labor costs discourages business (gee is that a surprise?) Do you think business owners like giving their money away? No! Of course not and there is a constant and unavoidable battle between labor and capital – and that is one of the reasons why we have a government and regulation – to attempt to make the battleground somewhat rational and fair – the tools of the fight include politics and this is why we have a one person one vote system (which by the way was not clear we would have during the country’s formative years), rather than only land owners or people making above a certain income being able to vote!
Lets take the ridiculous arguement made in the above piece to it’s extended conclusion: the best business climate is a minimally educated work force (just smart enough to learn their job), willing to work 40hrs a week (hey, 60-70 is even better) plus for wages that just allow them to buy enough calaries not to die on the job, no child labor laws, no environmenetal regulation, no retirement or health insurance, etc etc. Don’t worry, you can kill the workers, we’ll just make more (or import them legaly or not from even poorer countries)- in other words if we could only make our states like colonies, we can go back to being the empire Mr Schiller and others so obvioulsy miss.
One interesting law would be to require the boards of cooperations to live in the country in which that corporation makes most of its income. Then corporations (heh they are people yes) – well the real people behind them would be subject to real political fallout from the unstable and morally reprehensible conditions they generate, such as at Bhopal, India in 1984 and myriad other places since!
There are presently 8 states that have the same or higher minimum wage (and Nevada is one of them!) than California. When adjusted for all taxes, we fall in the middle of the pack. But yes, we like to breathe, and stop the spread of aids in sex workers (they are moving because they are being forced to wear condoms, not because of taxes). And as the article pointed out, our income is higher than national average. I will stay.