All the jerks with jerking knees were quick to pounce on Toyota’s announcement that it’s moving its U.S. headquarters to Plano, Texas, to join Frito-Lay, Ericsson, Capital One, JCPenney, Dr Pepper Snapple Group, and Yum! Brands on the city’s long roster of corporate HQs. The move is being held up as another indication of how liberal, pinko California drives off jobs with high taxes and burdensome regulation. Once again, it seems, freewheeling Texas bags another scalp with a business-friendly environment that lays out the red carpet for corporations and treats them not as tax spigots and immoral rapers of man’s labor and nature’s bounty, but as the ten-fingered King Midases of American prosperity.
“California’s hostile business environment and over-zealous (sic) wealth distribution policies come home to roost,” crowed somebody on my Facebook page yesterday, before any of the details were known. Clearly, this person has never been to Malibu or the Hollywood Hills or Palos Verdes or Santa Barbara or Laguna Beach or Mountain View, where a whole lot of highly concentrated wealth looks like its being redistributed rather badly.
Still, it does look grim; Texas once again grows mightier as California bleeds jobs. Well, let’s put aside for a moment the contribution to these sentiments made by the rampant schadenfreude for sunny, often-silly California that is a hobby in the rest of America (especially after this year’s particularly lousy winter).
We also won’t harp too much on Toyota’s betrayal of its workers. Having grown into the second largest car company in the world and one of the richest, with about $60 billion in cash reserves, much of it coming from the lucrative American market, Toyota, a bastion of management-labor cohesion that once produced unparalleled quality and lifetime employment, is tearing up lives and abandoning its community ostensibly to save a few bucks. Toyota wanted to become more Americanized, which generally means a greater focus on near-term costs and share price rather than long-term strategic goals. In the parlance of our times, mission accomplished, boys.
Although I am not privy to the company’s boardroom conversations, I’m taking for granted that reduced labor cost is a major reason Toyota plans to move shop (it’s stated reason, to find a “neutral location” to “build the company and the culture from the ground up,” is too ridiculous to give any credence). As ably reported by my former co-worker Mark Rechtin at Automotive News, the cost of living is 39 percent lower in Plano than the company’s current hometown of Torrance, while housing costs are 63 percent less. Texas has no state income tax while California takes up to 12.3 percent. In order to match the buying power of a $30,000 salary in Plano, you’d need to pay your Torrance employee $50,000. Combined with as-yet unspecified relocation help from the state of Texas, which is probably worth hundreds of millions of Texan taxpayer dollars, Toyota’s decision seems to have a lot of merit.
And it cannot be denied that California is not an easy place to operate for Apple or Google or Oracle or Facebook or Amgen or Disney or American Honda Motor Corp. or Hyundai Motor America, or any of the other companies remaining behind in the economic ashes wrought by Sacramento’s Democratic monopoly. For one thing, California actually enforces its pollution laws with inspections and fines, such that dangerous fertilizer plants aren’t located next to schoolhouses, and cleaner air via more expensive renewable energy is a policy priority over burning cheaper fossil fuels, which have helped give Texas some of the filthiest air in the nation. California’s air is also dirty, but at least they’re working on it.
And California’s labor laws form a dense thicket of protections for employees against health hazards, employer predation, and racism, sexism, ageism, and other forms of workplace torment and unjustified termination. Its taxes are high because a vast and complicated infrastructure is required to support 38 million people mostly crammed into coastal cities with mountainous topography and the largest and potentially most dangerous geologic fault line in North America practically underfoot. California also has a severe water shortage that requires huge infrastructure investment and pits cities against powerful agricultural interests, driving up costs and aggravation for all.
While the largest state university system in the country is New York’s, at more than 400,000 undergraduates, California has three state college systems enrolling more than 2.5 million students. Texas’s largest public school district is Houston, with just over 200,000 students. The Los Angeles Unified School District alone has more than 650,000 students enrolled in more than 1000 facilities spread over 720 square miles.
California is expensive because it’s big, it’s complicated, it’s rather crowded in the coastal fault zone where everybody wants to live, and it’s loyal to its high ideals of remaining naturally beautiful and socially equitable despite global trends in the opposite direction.
And, speaking as a Torrance resident who lives barely a mile from Toyota’s current campus, California is just a nice place to live. Which is why housing is so expensive. Houses in Toyota’s zip code of 90501, which is about four miles from the beach, run $400–$600 a square foot. The market speaks with its feet, and lots of people want to live here. Barely a day goes by without the minions of some local real estate agent eager for listings rubber-banding a business card to my front door or leaving a flyer on the front step. Recently somebody left a handwritten note claiming to be from an agent representing a nice young couple, named in the letter, desperate to move into the neighborhood, and were we even remotely thinking of selling or know somebody who might have mentioned it over the garden fence?
Were you to place on one half of a scale all of California’s negatives, from earthquakes to taxes, from regulations to recent power outages, from drought to fire to sharks and the state’s near-insolvency, just one thing seems to tip it in California’s favor: a daytime temperature at the beach that rarely drops below 50 degrees or rises above 80.
Around 4000 jobs are expected to be affected by Toyota’s announcement. This cannot possibly be spun as good news for California, because many of those people will likely not go to Texas, but instead will remain in Southern California as unemployed job seekers. When Nissan left Los Angeles in 2006 for Nashville, the company lost around 75 percent of its veteran workforce, a vast exodus of talent and experience that chose to stay behind in the fetid, festering, liberal hell of the Golden State.
Those who do go to Texas will form part of the state’s most active import commodity: liberal-educated professionals drawn to Texas because of corporate relocations and unwilling to suffer bad air, underfunded schools, and lopsided state policy that heavily favors the welfare of corporations of that of individual citizens.
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Back in California, the body count from Toyota’s flee will be a small number compared to the 130,000 aerospace jobs lost in Los Angeles County over the past two decades. That was a near collapse of an industry that the region has absorbed and bounced back from with rapidly increasing home prices, more traffic, and higher living costs. In other words, California will survive to continue both annoying the knee jerkers with its successes and delighting them with its problems.
Well, at least until the Big One. Oh, how they will rejoice back home.
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