Remember These Facts the Next Time a Claim is Made that Businesses are Leaving California Because of "Job Killing Bills" and "The Business Climate"

As one of the authors of the study, Jed Kolko, put it, "Overall, the two-way dynamic more than cancels out employment losses."

Here are a couple more nuggets from the report itself:

This evidence has two key implications. First, any policy responses to concerns over the business climate were likely badly misdirected if they emphasized business relocation. Second, business relocation is not an informative indicator or “barometer” of the business climate. Instead, we are likely to learn much more about employment change in California by focusing on births, deaths, expansions, and contractions. [page 1]

In our view, this evidence has two implications. First, it seems difficult to interpret the shift of the locus of employment of California-headquartered firms to out of state as a reflection of a deteriorating California business climate in the state in recent years. Given that this shift was sharpest during the economic boom of the late 1990s, it cannot be attributed to business climate problems unless one is willing to argue that the business climate was worse during that period, which strikes us as implausible. [page 13]

Last June, the CalChamber issued a list of 32 "job killer" bills then pending in the California legislature--all of them by Democratic authors, a number of them subsequently signed by Governor Schwarzenegger. Among them the landmark global warming bill and a raise in the minimum wage. This year it will probably be universal health care. If history is any guide they will want present us with the same false choices between clean air and jobs and the like.

This tired old argument is also being made in other states--that they need to eliminate the positive steps their laws have made for their residents--in attempts to gin up a race to the bottom to remain "competitive." I would argue that the progressive advances that California has made--and must continue to strive for in the future--,is precisely what makes our state attractive to live and work in and that we must resist this siren's call. We need to invest in our education, infrastructure, and ourselves to be strong.

By the way, this is not the first time that the PPIC has released as study debunking the "jobs are leaving the state" argument. Last year in June they issued a 36 page report, "Interstate Business Relocation: An Industry-Level Analysis", which was criticized by the Chamber and their fellow travelers. So, you find a curious reference in today's report:

Business groups responding to our earlier research suggested that this was occurring, based in part on anecdotal or limited survey evidence,3 and we wanted to explore more systematic evidence on this hypothesis. [page 2]

Just so you know the source of this report, The Public Policy Institute of California is a private, nonprofit organization dedicated to improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett.