A look inside neighboring state strategy to pull in California jobs

150 150 Matthew Grant Anson

The Las Vegas Strip as seen from Frenchmen Mountain (Photo Credit: Stan Shebs via Flickr).

This piece was originally published on the California Economic Summit blog

We know Nevada and several states have set their sights on California businesses that are thinking of relocating, but courtesy of the Reno Gazette-Journal, we now know precisely what the strategy is when Nevada attempts to draw a Golden State business inland. 

Last year, 254 firms left California and, according to The Business Relocation Coach blogger Joseph Vranich, the top landing places for these businesses are, in order, Texas, Arizona, Colorado, Nevada, Utah, Virginia, and North Carolina. 

Nevada wants to move up that list, and it’s doing so via a partnership between the private and public sectors to help spur relocation. Part one of this two-pronged attack is to offer money to businesses looking to expand, on the condition that they relocate to Nevada. And if that doesn’t succeed, the next option is for a Nevada competitor to simply buy the California business and relocate it itself. 

Why are California businesses so eager to relocate or sell their businesses? Dusty Wunderlich, managing director at DCA Capital Partners, told the Gazette-Journal it’s the regulations. “I think the tipping point I’ve heard more than any other is the tedious regulation,” he said. “It gets to the point where CEOs and boards get fed up and it’s time to move.” 

And move they have. A Milken Institute study, conducted from 2000 to 2007 (notably prior to the economic downturn), found that California lost 79,000 manufacturing jobs. And those jobs didn’t just disappear: over the same period, seven California “peer” states added 62,000 of these same manufacturing jobs.

The exodus of California businesses continues every year, sacrificing scenery and weather for a better tax code and fewer crippling regulations. Surrounding states continue to get rich via regulations that aren’t even their own, a bizarre scenario where it seems everyone wins – except for California.

The California Economic Summit Action Plan works to combat this. Rather than stifle its own productivity, the Action Plan encourages California to streamline its notorious regulations in a way that can facilitate business growth and encourage businesses to stay and thrive. Our state can’t rely on a slowly recovering economy as a means for preventing relocation: it’s going to require actual creativity and innovation, because this problem isn’t going to go away and states like Nevada won’t suddenly stop their campaigns.


Matthew Grant Anson

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