LAW AND GOVERNMENT
employees ’ housing costs and taxes are also lower , he says .
He has some familiar observations : California has a “ culture of regulation ” — adding a structure or a piece of capital equipment costs the company about 30 to 40 percent more in California than in Texas because of the permitting and environmental impact studies California requires , he says . Still , the quality of California ’ s rice is far better than anywhere else in the country , in part because of state environmental rules , he says . “ In many ways , we buy in and believe in everything California is doing to have a good environment and regulate so that it ’ s not a free-for-all ,” Mitchell says .
Plus , better pay and stronger job protections in California mean he has a higher-quality , more invested workforce here — though that also means he can afford fewer workers per square foot in his California facilities , he says . “ California is a premium market ,” he says . “ I ’ m not a California hater .” And it ’ s not all nirvana in Texas — low taxes mean lower-quality services , so when his employees go to the DMV in Houston , it takes all day .
California ’ s political environment could also actually attract some companies . The state is overwhelmingly Democratic , and techpreneurs tend to support liberal policies on social and economic issues , though not on business regulation , according to a 2017 paper by researchers at the Stanford Graduate School of Business . So tech companies may prefer California ’ s progressive policies , because it helps them attract employees who are similarly inclined , says Michael . “ Ultimately businesses rely on talent , and that ’ s inevitably connected to the ( political ) environment ,” he says . ( Indeed , following the Supreme Court ’ s June ruling on abortion , Gov . Gavin Newsom made a pitch to companies to come back to California , though whether it will work is anyone ’ s guess .)
In other cases , business troubles have nothing to do with state rules . Harari says a big factor in his move was the rolling power outages . At one point he served as CEO of a communications company , and they ’ d get 24 hours ’ notice of a coming outage that would last an unknown number of days , which had big impacts on their revenue . Those forced many of their customers to close shop .
Sometimes it ’ s geography . Aerojet Rocketdyne moved part of its operations — its defense headquarters — to Huntsville , Alabama in 2016 . The company said in a statement they did so to be close to major customers but are “ proud to maintain a strong presence in the Sacramento community .”
Small signs of improvement ?
For all that , a lot of California legislation gets defeated because business advocates convince leaders it would
50 comstocksmag . com | August 2022