San Francisco (Kron) – California-based companies are moving out of state at an accelerating rate this year, according to a report by the Hoover Institution at Stanford University.
California has already lost a total of 74 headquarters in the first six months of the year, according to a report released in August 2021.
Compare it to the sum of 62 companies known to have moved from California throughout 2020. It’s no wonder the Hoover Institution calls it a “serious loss.”
Silicon Valley loss
Researchers used data from the beginning of the pandemic as well as data up to 2018 to describe the three-year escape.
From January 2018 to June 2021, the San Francisco Bay Area accounted for five of the ten counties in California that had the most company turnover.
San Francisco, a startup hotspot, ranks high on the list after Los Angeles, losing a total of 47 companies over the three years.
Other big hit Bay Area counties include: 4th place Santa Clara County, which lost 28 companies. Alameda County, 5th, 20 companies lost. Lost 13 companies in 7th place in San Mateo County. Contra Costa County is in 9th place, with 6 companies lost.
According to the Hoover Institution, these Bay Area migrations “reflect high-tech companies.” […] Choose cheaper locations not only to manage your business costs, but also to seduce workers who want to avoid living in the super-expensive Silicon Valley and San Francisco. “
Where are they moving?
Lone Star has acquired 114 of California’s 265 known companies that relocated their headquarters between January 2018 and June 2021. However, Texas has been a major relocation option for at least 10 years.
According to the Hoover Institution, Tennessee was the most fascinating place after Texas. But compared to 114, who found a home in Texas, the state won only 25 businesses.
Some of the companies that left California for Texas in 2021 “Book of Escape” from the California Policy Center.
The nearby western state concludes the top five relocation destinations in Arizona, Nevada, and Colorado. Researchers have partially acknowledged the ranking of convenient short flights from California.
Why California Considered “bad for business”
The report quoted a 2021 survey by the Chief Executive Officer. In this study, US CEOs identified each of the most valuable when choosing a location for their headquarters.
- Tax system
- Regulatory environment
- Talent availability
Of all 50 states, the CEO’s survey ranked Texas as absolutely the best for business and California as the absolute worst for business.
California’s high taxes bear a lot of responsibility. The Hoover Institution cites the Tax Foundation for explanation:
“If taxes make up the majority of profits, the cost is for consumers (through higher prices), employees (through lower wages or less work), or shareholders (through lower dividends or stock value), or above. Passed on to several combinations of. Therefore, states with low tax costs are more attractive for business investment and are more likely to experience economic growth. ”
Tax Foundation Jarid Walzac and Janel Kamenga
The report also states that California is the most regulated state in the country. This makes it difficult for businesses to comply with all the rules enforced by 518 state agencies, boards and committees.
Read the full report of the Hoover Institution For more reasons due to the reason companies move out of California.
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According to a survey, companies are rapidly leaving California. Here’s where they go | WGN Radio 720
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