EZ Policy Blog

There is a very interesting article in today’s Los Angeles Times about the state of manufacturing jobs in Southern California. There seems to be a delicate balance between the general difficulties of doing business in California and the numerous benefits. On the one hand, the business owner profiled explains:

“Some of the smartest people in the world live here, and if I was to move the company outside of California I would lose some of those good, qualified people that I might not be able to find” elsewhere, Loyd said.

Another lure is California’s harbors, which make it easy to ship products to his company’s increasingly international customer base, Loyd said.

Yet at the same time:

But even companies that are loyal to California are frustrated by what they see as excessive regulation and a less-than-friendly attitude toward business.

The result in some cases is that companies maintain their headquarters and a core of high-end jobs in the Southland but move lower-level operations out of state.

Virco Manufacturing Corp., which makes children’s furniture, is based in Torrance but creates most of its new jobs at its Arkansas facility, where regulation is much lighter and energy costs are four times lower, said Robert Virtue, Virco’s president.

“The overregulation is a real deterrent to growth,” Virtue said. “Many of the jobs we’re adding are in Arkansas because the business climate there is good.”

Very often, the decision seems to transcend the bottom line:

“If I was a bean counter and I was in a publicly traded company, I probably would have gone,” said Loyd, the company’s president. “But being a family-owned business and privately held and having [community] values intact were the reasons we’re still here.”