Our economic growth continues to be frustratingly stagnant, both here in California and across the country. I strongly believe we must get the government out of the way of job creators, which is why I have led the effort in Congress to reduce the number of job-killing bureaucrats who simply create more red tape that slows down our economy.
The least business-friendly state
Earlier this year, California ranked dead last in Chief Executive magazine’s “Best and Worst States for Business” survey for the 12th year in a row, and was one of just three states (along with Connecticut and Illinois) to receive an “F” in Thumbtack.com’s “2016 Small Business Friendliness Survey.” A new CNBC study adds still more evidence, as if any was needed, of California’s anti-business attitude and policies.
In CNBC’s 10th annual “America’s Top States for Business” study, California ranked dead last among the states in the Business Friendliness category, and 49th in Cost of Doing Business. It also ranked near the bottom (47th) in the Cost of Living category.
The news was not all bad, however. The Golden State was redeemed by high marks in the Technology and Innovation (2nd), Access to Capital (tied for 2nd) and Economy (8th) categories. This performance was enough to lift the state’s overall score, albeit to a still-disappointing 32nd, five places lower than last year’s analysis.
CNBC also evaluated states’ cumulative scores over the past decade. California placed 36th in this analysis, although it did grab the top overall spot for both Technology and Innovation and Access to Capital.
CNBC’s “Top of the Tops” honors for the 10-year period went to Texas, which also topped the Chief Executive and Thumbtack business climate surveys. During this time, it placed first in the Economy and Infrastructure groups, “winning both of those categories handily,” and also notched top-10 rankings in Technology and Innovation, Business Friendliness and Access to Capital.
Unfortunately, California’s recent economic growth has largely been concentrated in the technology sector, particularly in the Silicon Valley/Bay Area. And while some have tried to knock Texas’ economic growth by claiming that it is based on menial, low-wage jobs, unlike the supposedly higher-wage jobs created in California, the truth is mostly the complete opposite. Like much of the state, here in Orange County, “We are increasing low-value-added, low-paying jobs in a county with housing costs that are unaffordable to most people,” Chapman University president and economist James Doti told the Register after the release of the school’s most recent economic forecast late last month. Meanwhile, California is bleeding skilled, higher-wage jobs, such as those in manufacturing and business services, to Texas and other states with more favorable business climates.
The secret to Texas’ success, as Gov. Rick Perry explained to CNBC in 2008, one of the years in which his state topped the list, is: “We’ve got low taxes, we’ve got a balanced regulatory climate, we’ve got a fair legal system and we continue to fund an accountable school system so that we have a good, skilled workforce.”
California could learn something from Texas, if only our policymakers could restrain themselves from intervening in our business and personal affairs. Or we could just continue to watch many of our most productive entrepreneurs and workers leave for better opportunities in Texas and other states while California brings up the rear in more business climate surveys.