Another Big Company Leaves California. What Will It Take for State Officials to Change Course?

Forgive us if we sound like a broken record, but the exodus of California businesses out of the state to more affordable and competitive economic climates grew worse last week.

The Los Angeles Times reports that the latest corporate headquarters to announce their departure is AECOM, the global engineering and construction firm.

According to the times, “a company spokesperson said AECOM is moving because ‘Dallas has emerged as a U.S. hub for corporate headquarters and a compelling corporate talent magnet, particularly among our peers and public companies in the engineering and consulting sectors.’”

Though 2,500 employees will remain at AECOM’s California locations across the state, the CEO and C-Suite will relocate to Texas on October 1. The company has 47,000 employees worldwide.

Just last week, Kerry Jackson wrote on Right by the Bay that, “excessive taxation, smothering regulations, a legal system overly accommodative to plaintiffs’ lawyers who eye businesses as treasure chests to plunder, and a briar patch of bureaucracy don’t exactly feed the fires of innovation and dynamism.”

So, what are state officials doing to try and keep companies like AECOM headquartered in California?  If you listen to Gov. Newsom’s recent comments, it’s to deny the reality of what’s happening.

In a question-and-answer session with editorial board members from the McClatchy newspapers chain, Newsom called California “the tentpole of the American economy” and noted the state had created 559,000 jobs in recent months.

“Eat your heart out, Texas and Florida,” he said.

But as Chapman University fellow in urban studies Joel Kotkin writes in PRI’s new Saving California book, “most of the new jobs pay poorly.”

“A remarkable 86 percent of all new jobs paid below the median income while almost half paid under $40,000,” he writes.  “Even Silicon Valley has created fewer high-paying positions than the national average, and far fewer than prime competitors in places such as Salt Lake City, Seattle or Austin.”

What can be done to turn things around and make California a more attractive place to retain jobs – let alone create new ones?

Among his suggested reforms, Kotkin says that state lawmakers should use some of the current record $75.7 billion budget surplus to make investments in “downtrodden areas” of the state.  He notes that states like Ohio and South Carolina “have lured private investments by providing not just reduced taxes and infrastructure, but state-supported skills training.”  Prioritizing job training for blue-collar skills is one of the prime reasons companies locate there, he notes.

If local and state leaders are interested in learning what they can do to stem the tide and keep these companies in California – and the good-paying jobs and tax revenue that come with them – they would be wise to read Saving California and pay attention to Kotkin’s chapter.

P.S. PRI’s Kerry Jackson and Wayne Winegarden have a new study coming out soon exploring the reasons why California continues to lose jobs and opportunity to states like Texas and Tennessee. Stay tuned.

Tim Anaya is the Pacific Research Institute’s senior director of communications and the Sacramento office.

This article was originally published by the Pacific Research Institute.

Comments

  1. Kerry Jackson wrote on Right by the Bay that, “excessive taxation, smothering regulations, a legal system overly accommodative to plaintiffs’ lawyers who eye businesses as treasure chests to plunder, and a briar patch of bureaucracy don’t exactly feed the fires of innovation and dynamism.”

    Kerry stated it the best of what CA government has forced on businesses – big or small… Sad, very sad….

  2. Hey Newom, I have an idea for saving your recall? Lets PRETEND IT IS NOT HAPPENING?? What do you think? Biden is using this same play book in Afghanistan, Pretending it is not happening…Just a suggestion for you

  3. Max, I RECALL that Dandy Nandy Newsom is GONE!!

  4. Disgusted Voter and Tax Payer says

    Here are a FEW recommendations – from a tax payer, retired teacher, retired employee, and voter!!!!

    1 – stop paying teachers for doing nothing – make them work!!! Make kids pass tests to graduate!
    2 – stop raising taxes to support the illegals and homeless.
    3 – stop inviting the homeless to come and squat and do drugs and NOT obey laws or even basic sanitation rules.
    4 – stop allowing Buyden to destroy our state with dumping illegals who have invaded our country!
    5 – give us back our beaches – that we’re paying for with taxes to maintain – yet the homeless are squatting there.
    6 – support our police departments!!!!
    7 – stop telling people their victims. Get real – there were NEVER black slaves in this territory!!! NEVER!!!!! American Native people, yes – blacks, NO!!!!!

    Are you seeing a pattern???? The taxpayers are forced to support all this – yet the voters are against it!!!

    Oh yeah – and MAKE OUR ELECTIONS in CA LEGAL and LEGIT and NOT FAKED!!!!!!!

  5. AECOM knows it would be tough to simply close in California and quickly displace and disrupt 2500 employees and current work load. They will go the attrition route, less disruptive.

  6. Murphy Miller says

    The California government needs to stop making excuses and confront the actual root causes of the problem. Kerry Jackson is spot on. They need to address: excessive taxation, ridiculous regulations, a legal system overhaul/tort reform, and the structure of their huge, inefficient bureaucracy. If the government is unable to do this, this trend will continue. Texas is happy to have the companies that California runs off!

    Part of the challenge will be for the people who created the problem in the first place to fix it. They likely do not understand how their tactics contributed to the looming disaster.

  7. Isn’t it funny how every policy supported by the Democrats aids the CCP? Following the money, we find that the biggest competitor to the CCP is a healthy middle class. Hence, the state and national Democrat party, now an arm of the CCP, will continue to destroy the middle class in CA, and if given the chance, in the US.

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