As part of its ongoing analysis of critical economic trends, the Center for Jobs and the Economy is releasing its newest feature, CaliFormers, which will track California businesses that are either leaving, relocating employees, expanding facilities or hiring in other states.

Even before the pandemic began, there was already small and large businesses leaving California for states with lower costs for both their business and their employees. While the pandemic, and the flexibility of telecommuting, may motivate additional companies to leave the California, it is too soon to determine the long-term impact on the California jobs market. The CaliFormers feature is one of the ways the Center will be tracking these issues for greater transparency and future analysis.

California policies have created the highest in the nation cost-of-living and strictest in the nation regulatory costs which have caused jobs in key sectors such as manufacturing to start-up, scale or relocate in other lower-cost states, sometimes just across the border from California.

The result of the investments from these competing states and the tech industry itself have transformed other states’ economies into new and more competitive tech hubs. With these new and burgeoning hubs established, an increasing number of tech businesses, and the state taxes they and their employees pay California each year, are now leaving.  Since these moves have occurred, it is now time to analyze how they affect the state’s economy and fiscal structure, how many more are planning to move and whether these moves will accelerate in the post-pandemic period.

Putting an exact number on how many jobs are moving from the state is complicated by the reality that moving jobs out of California can take one of several forms: (1) a company may move all of its operations, as is the case for some of the companies listed below as moving their headquarters to another state; (2) companies may move a portion of their operations, in particular back-office functions that can be performed anywhere, and often these moves are made without a public announcement; (3) companies may choose to expand in other states rather than other regions of the state as they have done in the past, and the movement of jobs, in this case, is through lost opportunities; and (4) increasingly workers are taking on this decision by themselves and choosing to move to areas with lower costs of living while retaining their jobs through telecommuting.

There also is frequently a lag between a company announcing a move and a change of employment levels within the state.

CaliFormers will be updated regularly as businesses make decisions to relocate or expand jobs outside our state. Using this data, the Center will be able to establish any potential trend lines and how that impacts the state’s unemployment outlook and General Fund solvency. Most importantly, the goal will be to further assess what is driving these businesses to choose anywhere but California.