In the words of L.L. Cool J.: Don’t call it a comeback.
Not yet, anyway.
A front-page article in Sunday’s Sacramento Bee suggests that even among signs that the national economy is improving slightly, California faces an uphill climb.
The article, titled “California Comeback Faces Global Competition,” details the many challenges facing California businesses, both small and large.
For starters, the state continues to lag behind in critical areas:
– Business owners still face the harshest regulations among any of the 50 states. They face absolutely zero incentive to grow their businesses – or worse, to simply keep their businesses in California. The article points out whether it’s a small startup business in Davis, California or a large employer like Intel, companies are practically begging for the slightest shred of evidence as to why they should remain in California.
– Workers comp insurance rates are still 20% higher than most states in the nation;
– And there continues to be an overall hostile business climate, which can be worsened at any moment by the perennial California budget crisis.
And now, there’s a new kink in the plan: We’re no longer competing with our best selves. And I’m not talking about Nevada or Arizona, our neighboring states. During this comeback, we’ll be competing with China and India. The article suggests that California’s higher education system – once considered the greatest asset to California’s workforce – has lost its luster. Instead of looking in Berkeley, California, employers can now find innovative, well-educated young professionals in Austin, Texas, Bangladesh, or India. All for a fraction of the cost of doing business in California.
This morning, there is word that Google is planning a large scale move away from California. According to the website OpenPR.com, Google is reportedly looking to ditch its headquarters in Silicon Valley and has reportedly purchased property on an island so as to be strategically positioned to serve global clients. Among the cited reasons is California’s Greece-like crisis that is preventing Google from being able to enjoy “further necessary investments in the electrical and networking infrastructure.” If word of Google’s move is true, what a loss for California this would be.
What’s worse, I truly believe other California business owners are waiting for the other shoe to drop. Waiting to see if the Legislature and the Governor have any surprises for the Budget in June. Nervously waiting to see if Californians will, once again, face the largest Tax increase in state and national history. Let’s face it, where business development is concerned, uncertainty is the enemy.
Even as I write this, I feel certain that I’m repeating myself. I’m sure I said this last year. And the year before that. It begs the question, how many times do we have to say it before the Legislative majority listens? And if they won’t listen to the Sac Bee, who will they listen to? I hope that, if anything else, this economic crisis has been a wake-up call that the old ways of fostering an unhealthy business in California have passed on. They simply must awaken to the new reality and the challenges
that lie before us. Our economic recovery depends on it.