Forbes has several articles asking tough questions about the job market in California. The sad truth is that California is losing jobs to other states and other countries, as the high tax burden and cost of living makes it difficult for employers to commit to the state.
Now, you have to take into account the agenda at Forbes. While the business magazine is excellent, the ideological bent is very clear. The publication favors free markets and loathes taxes. While you would expect that from most business writers and publications, Forbes sometimes takes that to an extreme.
That said, they often make compelling arguments when presenting cases where business development is hindered by taxes and regulation, and California has become the poster-child for many of these problems.
In one provocative article, a Forbes writer argues that California is becoming more like France.
A friend of mine who is a successful venture capitalist shared a depressing observation over dinner recently: “California is like France,” he said. “I try not to hire here, and I certainly would not launch a company here. But the wine is good.”
Listen up Sacramento, your tax base is moving elsewhere.
“California has competition,” says Mehta. This is starting to show. A report recently released by the Bureau of Labor Statistics shows Silicon Valley lagging. Tech employment fell nearly 17% between 2001 and 2008, while nationally those types of jobs grew 4%. Silicon Valley’s 11.8% unemployment level is higher than the nation’s.
“It’s a combination of taxes and talent,” says Mehta. “Taxes and expenses here are high, and we can get the talent or move it elsewhere. This wasn’t the case 10 years ago.”
Another article details how employers like McAfee are moving employees outside the state.
The dysfunctional nature of California politics is now catching up to the state. Meanwhile, other states are seizing the opportunity with incentives and other aggressive tactics to brings in jobs. Will California wake up?