CEOs say California worst place to do business, Texas best
sacbee.com
sacbee.com
I would attribute this to the amount of local taxes and labor laws that these states have. The "Worst" rankings are for states that have taxes and robust labor laws/strong unions.
Let's face it, they don't like Texas for their education systems. They like it because their overhead is much cheaper. Plus, East Texas is patent troll paradise.
Not that there is anything wrong with those motives, but it is useful to keep in mind.
This is little more than another exhibit to show how little American CEOs do to earn their ridiculous salaries.
Even much-vaunted New York City is not as strong as it might appear at first glance. NYC in 2011 is a single-industry town... finance IS NYC. Even the feature that defined NY for centuries -- New York Harbor -- contributes almost nothing to the state, as the freight terminals fled overegulation to New Jersey (of all places) in the 1970's.
30-40 years ago, the city had a diversified mix of finance, manufacturing and service industries. There were over 10,000 manufacturing firms in the city in 1970. Now both the NY state and city are living off of a sole benefactor -- Wall St.
"why does New York have a substantially larger economy?"
Well, location, history (it was there first), a port (its not land-locked), huge population, and many other factors you've disregarded might be the reasons, for starters.
The only quote you give
'low taxes and corrupt government good, labor protection and regulation, bad'
is not in the article: it isn't a quote so why the quote marks? That's outright deception.
What an utterly ignorant and vicious post!
So I disagree that my post is ignorant or vicious. That is not a direct quote, sure, but looking at the how the various states were obviously 'scored' it is pretty clear what is going on: CEOs value short-term and unsustainable business incentives, which may be fine as far as it goes but if you can't see why that precludes them from having a good influence on government policy then I don't have much else to say to you, I'm afraid.
That is not true (as the article shows). CEOs use many factors in choosing a state within which to locate their business.
If everyone believed as you, would that be a good thing? Did you expect, in a democracy, that everyone else would see things as you do? If you are over the age of 12, it is late in life to realize that other people do not think as you do.
*The Political Mind: Why You Can't Understand 21st-Century American Politics with an 18th-Century Brain by George Lakoff
If you want to be in tech, OTOH, the two worst states are the only ones with VCs you actually hear about on HN.
It does make you think about American management culture.
[edit: I just noticed Illinois is third worst, hehhehheh. I wonder what DHH is thinking.]
Methinks that study is missing something. I suspect the regulations make starting a certain type of businesses (manufacturing, mining, logging) pretty miserable here. But those regulations also force executives to focus on starting a certain type of high risk/high reward type of business like software, bio tech, entertainment business's essential in the state.
Why do industries concentrate in any area? It's called preferential selection and has strong historical/inertial ties. This can be seen in all sorts of other areas, for instance in NYC when building a new bridge back in the day it replaced the ferry dock, because that was where the roads already led to and it could handle the traffic. California is one of the most resource rich, and beautiful places to live in the entire country. It's easier to kill off industries than people think, and the advantages of being in a hub are getting less and less as technology improves.
It says that it's a poll of 500 assholes who read Chief Executive magazine. I bet at least 250 of these guys own monogrammed towels.
Say you manufacture toilet paper. Then you probably do want to locate your business in some state with friendly tax policies, and where you will find a ready supply of workers who will be quite happy to work for $12 an hour.
But for economic reasons, good tech people have the ability to be picky. They can move anywhere, and most of them prefer to live in beautiful places with a lot of diversity and culture. Hence places like the Bay Area. True, you can't buy a house here for a sane amount of money, but that doesn't matter either to the very rich, or to the very ambitious (who are happy to cram into some tiny apartment in their twenties).
Meanwhile, the successful and ambitious will draw many others who wisely choose to follow the action. California has a dysfunctional government, but it has a lot of things going for it. Silicon Valley isn't going anywhere anytime soon.
A study asking them to rate tax policy in each of 50 states would also be inadequate since the average CEO probably does not have enough knowledge to answer that question about all 50 states.
Not to mention for every Singapore there's an Ireland to match.
[1] http://filipspagnoli.wordpress.com/stats-on-human-rights/sta...
[2] http://filipspagnoli.files.wordpress.com/2008/06/economic-fr...
[3] http://filipspagnoli.files.wordpress.com/2008/08/economic-fr...
Any economic index, regardless of its source, will show that freer trade shows more economic growth. Singapore surpasses Ireland in terms of economic growth; also, Ireland adopted more free market principles to achieve its growth when it started to privatize its industries. All the countries you mention that have high GDP per capita and high GDP growth have high economic freedom scores.
Trying to argue against freer trade for economic growth is like trying to argue with someone who says the Earth isn't round. China, India, Poland, Russia, etc., etc., grew their economies rapidly by moving to privatization and eliminating barriers to trade. Economists across the aisle support free trade; for example, read Paul Krugman's views on free trade in his Wikipedia entry (or research Goolsbee's, Geithnner's, Stglitz's, DeLong's, Sach's, Summers', etc, etc, etc, -- not to mention the plethora of economists' from across the other aisle -- views on free trade's effects on economic growth). This concept is not even debated anymore among the world's leading economists.
In fact, it looks like you're now starting to set up a straw man by bringing in property rights and economic freedom which are so general and irrelevant to the article as to be nothing more than a dog whistle.
See also: http://www.businessweek.com/magazine/content/11_16/b42240452...
Do you really think they would still have the world's highest GDP per-capita income with a 0% tax rate if major international companies were somehow not able to exploit it?
You seem to be arguing against an idea of what I am saying rather than what I am saying. Let's just agree to disagree and leave it at that.
Median income is a more useful measure than per capita income.
I live here but if you just took a raw numbers, by simply moving your business to dallas you can improve your bottom line by about 30 percent. But then again who wants to live in Texas anyway? I'd do Florida though! :)
CA's educational standards (as well as other standards) cannot be maintained in the long run: the political system won't allow it. Within a few years we'll see significant downsizing of CA government and government services. For some this will be a lowering of standards but it is necessary.
I was talking to a friend of mine a few days ago and we were talking about the best place to live in the US. We were thinking in terms of a) reasonable cost of living (a million dollars should buy a mansion not a house), b) good weather (all four seasons at worst - no harsh summer/winter), c) low crime rate, d) high average IQ (no 'steel towns'), e) not under the constant threat of natural disasters and f) race not an issue (I don’t back down from racists which makes my fiancé nervous and ruins my day a bit ;)).
I have lived in the Pacific NW (rain sucks! I often joke I'd rather be in prison ;)), lived in So Cal (traffic sucks, homes cost way too much, the crowd is whack mostly, the air quality is bad, nothing is close etc.), short stint in Chicago (living there despite the weather is an act of arrogance against Mother Nature).
Long story short we concluded the best spots are 1) Denver, 2) San Diego, 3) Atlanta, 4) Salt Lake City.
If you have heart disease in your family (I do), don’t move to Denver. I’ve been told high altitudes are bad for heart patients (even future heart patients like myself.)
1) The weather here can get kinda crazy. Schizophrenic even, one day it could be 80, then 50 or 30 then 70. Mostly when the seasons change, and it can get really hot 80+ all summer (which I personally love as a southern native. I just spent at summer in California last year and found out that alot of people don't though). And in the winter we have a few really cold days but its mostly 30s.
2) If you are living in the suburbs crime rate is low to negligible, the city is another story.
But aside from that on cost of living, tolerance, etc. you are very correct.
Just thought I would share
We were trying to avoid harsh climate - like Chicago winters or Miami summers. I'd rather deal with 'schizophrenic but cut off before the extremes' spikes than constant, months long punishment.
Are the burbs nice? :)
Look for a place in Marietta, Alpharetta, or near Emory's campus (Druid Hills i think they call the area) for the nicest places to have homes and Midtown and Atlantic Station for the nicest condos (in the city, we just call it downtown here).
Assuming that Dallas has a talent pool that fits your ambitions and is willing to work at your company.
I wouldn't launch a paper mill in San Jose, or a startup in Montana.
I'd rather have (near) first picks from the University of Texas Austin, than third or fourth round picks from Stanford.
The top 10% of a top tier school beats trying to compete with Google, FB, MS and every known tech company in the world while being in the Valley, or paying for huge relocation costs to bring people in from other states or countries while being under the constant threat of them being picked out by recruiters for other companies.
I grew up in Durham, NC and went to college in Texas. Everybody drives in both places. Now I live in SF and take the train every day to Stanford. Transit here could be better to be sure, but it could be a lot worse.
So the CEOs are either predicting future changes, or mistaken in their analysis of what's good/bad for business. One way to distinguish those two cases would be to look at an older survey and see how the rankings fared as predictions of future state prosperity.
A company attempts to maximize profits while reducing labor costs. An employee attempts to maxamize profit from their labor, which is a fairly static quantity.
New tools can come out that enhance productivity, but that only sets the baseline productivity that much higher. Wages rarely increase to match a jump in productivity.
"Wages rarely increase to match a jump in productivity."
That's why we're all still working 80 hours a week to pay for a daily bowl of gruel and an unheated shack, right?
http://www.nytimes.com/2006/08/28/business/28wages.html
For most of the last century, wages and productivity — the key measure of the economy’s efficiency — have risen together, increasing rapidly through the 1950’s and 60’s and far more slowly in the 1970’s and 80’s.
So in this regard, Turing_Machine is indeed correct that wages have historically followed increases in productivity. My remarks were imprecise, the word rarely should have had an asterisk to a footnote that states that rarely means within the last decade or so.
But in recent years, the productivity gains have continued while the pay increases have not kept up. Worker productivity rose 16.6 percent from 2000 to 2005, while total compensation for the median worker rose 7.2 percent, according to Labor Department statistics analyzed by the Economic Policy Institute, a liberal research group. Benefits accounted for most of the increase.
The BBC had an excellent graph that displays the trend over time.
http://news.bbc.co.uk/2/hi/africa/5303590.stm
The authors of the EPI report argue that low minimum wages, weakened union power, and the loss of both blue and white-collar jobs to off shoring do much to explain the jobs picture.
Which leads us back to why Texas is popular right now. Most of the news articles are from the viewpoint of workers, discussing it in a negative connotation. I'm sure you can find other publications from the other viewpoint, that labor is getting cheaper and profits are going through the roof. Surely someone in the WSJ or The Economist has noticed.
http://www.dallasnews.com/news/state/headlines/20100908-Stud...
Please emphasize the Great Texas Desert, the skyrocketing cost of hay (for feeding your horse, of course), and the dangers of rattlesnakes, wild indians, and 200-pound snapping turtles (in the few places in Texas where there is water).
Gotta go clean the horseshit off my driveway now. Later, Dude!
P.S. Texas does produce a lot of cotton and is an important state agriculturally. But it isn't particularly telling in comparison: CA produces lots of fruits!