As the nation’s unemployment figures continue to reach new heights, Chief Executive magazine's 2009 "Best & Worst States" survey took CEO's pulse on what the best and worst places for jobs and business growth are. For the fourth year in a row, CEOs rated Texas as the #1 state to do business and California as the worst.
Chief Executive's fifth annual survey asked 543 CEOs to evaluate their states on a broad range of issues, including proximity to resources, regulation, tax policies, education, quality of living and infrastructure. Providing additional insight to the evaluations, CEOs were also asked to grade each state based on the following criteria: 1) Taxation & Regulation, 2) Workforce Quality, and 3) Living Environment.
Highest taxes, highest cost of living, horrible schools. To think that those ungrateful businesses won't put up with that for the ocean breeze.
Sure, Silicon Valley has some structural advantages, with a critical mass of techies, but even that can't overcome California's disadvantages. Silicon Valley companies are now opening new facilities not in Silicon Valley but in places like Austin, Texas, and the North Carolina Triangle -- places with similar populations of highly educated people, but with less oppressive government and more affordable living.
We noted last year that Shutterfly has Shutterflown. Now Bay Area favorite chocolate factory Scharffen Berger is closing to move operations to Illinois. Anecdotal cherry-picking? Maybe. But can you find recent examples of businesses leaving other states to come to California? I didn't think so. And there's this:
[Bain] interviewed chief executives or senior managers of about 50 small, medium and large companies with extensive operations in the state.
About 40 percent said their companies have an explicit policy to move jobs elsewhere in the United States, with Texas cited as the most frequent destination. Not counting those companies that must stay in California, such as retailers or health care providers, the proportion of businesses that said their policy is to move jobs rose to 55 percent.
Another group of executives, just under 20 percent of those interviewed, said their policy is to avoid adding jobs in California, except when absolutely necessary.
Note that the survey was from 2004, when the economy and the state budget were still being carried along by the wealth and employment from the real estate bubble. Imagine the numbers on a similar survey today.
But you'd have to be an unreasonable ideologue to oppose further tax increases, right?