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Reason Foundation

Los Angeles Daily News

Politicians 'Out-force' Jobs From California

State's lawmakers create climate of hostile employment opportunity

Ted Balaker
June 8, 2005

California's lawmakers, already the best-paid in the nation, recently got a 12 percent raise.

This sort of thing always makes for a tough public-relations sell, but Assembly Speaker Fabian Nu´┐Żez defended the raise by saying that it will help attract good people to politics. Maybe so, but wouldn't it be nice if the Legislature focused on bringing new business, not new politicians, to California?

Imagine trying to recruit businesses or a new employees to California and the San Fernando Valley:

First, where would the employees live? Our tight land-use policies function as an indirect tax, driving up the cost of housing. The median price of a home across the entire state is now more than a half a million dollars. Not long ago, people were fleeing Los Angeles for the cheap houses in Santa Clarita. Now, even the median price in Santa Clarita is above $500,000. The median housing price throughout Los Angeles County recently hit $485,000, with Ventura County up more than $649,000.

In order to attract and retain good workers, businesses must pay significantly higher salaries so their employees can afford to live here.

Recruits also want to know about the schools their kids will attend. Well, home buyers in Los Angeles often decide to seek out locations that fall outside the domain of the troubled Los Angeles Unified School District -- not the best recruiting tool.

How about the commute to work?

Los Angeles typically tops the Texas Transportation Institute's annual worst-traffic list. Mounting traffic congestion restricts commuters' mobility so much that businesses are forced to hire from a shrinking talent pool. And congestion isn't created by more driving -- it's created by politics. Californians could enjoy better mobility, but our leaders just haven't pursued the right policies. Light rail anyone?

Meanwhile, our neighbors gladly scoop up California's escapees and ask for more. Nevada created billboards that tout its strengths and brashly planted them in California. Over an image of a worker with a black eye, one billboard reads, "Will your business be terminated? Nevada to the rescue." Nevada has no corporate income tax, no personal income tax, lower workers' compensation costs, and more affordable real estate.

And yet, in the midst of these mountainous problems, our state legislators choose to focus on -- and wail about -- molehills like offshore outsourcing. Last year, the Legislature passed five anti-outsourcing bills only to have them squashed by Gov. Arnold Schwarzenegger's veto pen. This year, five more anti-outsourcing bills have already popped up. Recently, Speaker Nunez even resorted to an awkward brand of performance art as as he stood among wooden crates which, in bright red letters, bore the words "Exported California Jobs."

Never let the facts get in the way of a good photo-op.

In January, the California state auditor looked into all the offshoring hoopla and discovered that "the state is spending little on services performed offshore."

And mass layoff data from the Bureau of Labor Statistics show that when jobs are lost from relocation that nearly 70 percent stay on American soil. In other words, Californians are far more likely to lose their jobs to Nevada or Arizona -- or any of the other far less regulated states across the nation -- than to someone in a faraway land.

The real threat isn't outsourcing, it is politicians who pass laws that create a climate hostile to job creation. These jobs aren't outsourced. They are pushed out by bad policies -- that is, they are outforced.

Naturally, our legislators would prefer to keep the heat on outsourcing than themselves. After all, investigating why so many jobs have been forced out of California would mean following trails of pink slips back to city councils, county commissions, and, of course, back to the state Legislature.

Ted Balaker is the Jacob's Fellow at Reason Foundation.


Ted Balaker is Producer


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