Wage Issue Overshadows Biz Moving In/Out of CA

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

How much workers at newly established jobs are paid may be the bigger issue than businesses coming in or leaving California according to some preliminary data released in a new effort to understand the regulatory impact on business and its relation to the surrounding community. An ambitious project undertaken by the California Business Roundtable and the Los Angeles Urban League through the auspices of UCLA’s Luskin School of Public Affairs released some initial data yesterday.

Nolan Rollins, head of the Los Angeles chapter of the Urban League, succinctly expressed the goal of the sponsors by noting that he wears a pin that spells JOBS. He said what is often lost in conversations about the business environment is the connection between businesses and the health of the community.

In the first of three scheduled programs, UCLA professors presented statistics on various California metropolitan regions, with a focus on the Los Angeles area.

The oft-debated issue of businesses leaving California was a major point in the discussion. While the research revealed that more businesses came to Los Angeles County from other states than departed to other states over a twenty year period starting in 1990, and the county still lost jobs.

UCLA Ph.D. candidate Taner Osman, who conducted the research with professors Matt Drennan and Bill Parent, said that 6,051 businesses left Los Angeles County for other states from 1990 to 2011. A larger number of businesses, 7,121, came into the county from other states during that period. However, the departing companies took 100,749 jobs out of the state while the companies moving into Los Angeles County from another state brought 72,122 jobs with them.

The data indicates that bigger companies with better paying jobs are leaving. The lost jobs averaged roughly $76,000 in salary, while the jobs gained were in the $52,000 range.

Rob Lapsley, president of the California Business Roundtable, said that the wage issue was an important measure that would affect all regions of the state.

The researchers intend to dig deeper to find the reasons the county is losing the better paying jobs. Regulations, tax burden, and education and their effect on the relationship between business and the community are all part of the probe.

A recent column in the Wall Street Journal cited over-regulation as a detriment to the economy. The piece cited a 31-percent reduction in regulations in the Federal Register during the Reagan presidency with a corresponding growth in the GDP of 30-percent. In addition, the author claimed that the cost of regulation for small businesses was 36-percent higher per employee than the costs for bigger businesses.

The Urban League’s Rollins also noted more difficulties for small business because of regulations. He said regulations that challenge large businesses “decimate” small businesses.

The Roundtable’s Lapsely said the big effort in understanding the problems for California is to get a clear view of the situation. “The data is lacking,” Lapsley said on the relationship between business and community. With the help of this project, it is hoped the data revealed over the course of the inquiry will lead to solutions to improve both the business climate and the community as a whole.

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