Jobs moving out of California

Jobs moving out of state / Cost, complex regulations cited by firms.

This news item is no surprise to any of us who have been trying to run businesses in California. As noted in the article, I think this did start as mainly a move by mid-sized to large companies to move manufacturing out of California, but anyone who thinks that that is all that's happening is in real denial. California is simply getting too expensive and there's no real sign that the state legislature (or big chunks of the state electorate) are going to shift out of their quasi-socialist mode of thinking.

I don't think that this has had much impact on start-ups yet. California's advantages for start-ups, particularly in high tech and bio-tech, still override cost. Plentiful supplies of entrepreneurially-oriented labor, plenty of serial entrepreneurs, lots of venture capital make a potent combination.

But I do think that the cost issues impact start-ups much earlier in their life cycle than in the past. No venture capitalist that I know is not pushing his start-ups to offshore things like software development, manufacturing at very early stages of company development. These kinds of jobs are going to several countries in eastern Europe, to India, to China, and other lower labor cost, lower regulatory cost environments. These jobs aren't being "moved" from California - they never get established here in the first place.

I've not seen the hostile, expensive business environment in California explicitly credited as a source of pressure to offshore jobs, but I strongly believe that it one source of that pressure. And now we're going to turn to the same legislators (state and national) that helped to create the excessive regulatory burden that is pushing jobs away and ask them to fix the problem? Yeah, right. That's gonna work.