California, here they go! Firms itching to leave

The high taxes, onerous regulations and quality-of-life woes of doing business in blue states is taking a toll on small business owners (SBOs). Fact: 40% of employers in California are actively looking to move, while another 27% wish they could, but can’t make the business case for it right now.

Only 13% of employers in the Golden State say they’re happy where they are, according to the latest Freedom Economy Index (FEI) monthly survey of 80,000 SBOs. That distressing statistic regarding California jibes with owners’ overall dissatisfaction with traditionally blue, Democrat-run state governments.

FEI asked SBOs, “are you considering moving your business to another state?” The bosses’ answers suggest the surge of businesses moving out of states like California, New York, Illinois and Massachusetts is going to continue and might even accelerate:

• about 32% of blue staters say they’re happy where they are, compared to roughly 77% of red staters
• 30% of blue state SBOs want to move but can’t afford it, as opposed to 10% in red areas, and
• the remaining 38% of blue state SBOs are either considering or planning a move, while just 13% of red staters are looking elsewhere.

“Red states that keep taxes low and minimize regulations are where businesses are thriving,” says RedBallon CEO Andrew Crapuchettes. Red Balloon bills itself as “America’s #1 woke-free job board” for job seekers and employers.

Speaking of woke dissatisfaction …

SBOs’ opinions of where they operate aren’t just based on economics. Entrepreneurs care a lot about the quality of education in public schools and the safety of their families and employees.

Here are top factors, ranked from top to bottom, driving SBOs’ desire to move:

1. high tax rates
2. anti-business government
3. woke schools
4. heavy regulatory policies
5. high crime rates
6. high energy costs
7. staying costs more than moving
8. lack of qualified job seekers, and
9. poor transportation infrastructure.

A year ago, many small businesses expressed optimism about revenue growth and hiring. FEI is hearing more bullish viewpoints from SBOs. Here’s a sample of how survey respondents feel about the economy:

• “The economy is getting worse. I’ve seen more layoffs than hiring lately.”
• “The credit card debt in our country is through the roof. I think people are still trying to live like they did when Trump was in office, but they’re using credit to do it.”
• “Rent is rising. Food costs are rising. I think people are putting more on credit with hopes they can pay it off if/when things improve.”
• “In my area, starting wages are down $2, on average vs. last year. The positive economic data is a sham. Things are bad.”
• “Higher wages and higher supply costs make it hard for us to grow our business.”
• “Big companies are rising and crushing the little guys.”
• “Inflation is still a huge problem. A tight housing market and higher interest rates are also a big deal.”
• “I think it’s worse than the numbers indicate. Unemployment is low because people have multiple low-wage and part-time jobs.”