Simply put, the regulatory challenges a business owner has to face in California make it unworthy of the effort for many potential entrepreneurs. That's according to one blogger who posted A Milestone to Celebrate: I Have Closed All My Businesses in Ventura County, California. Via Theunbrokenwindow.com.
Although his beef is with Ventura County, not the whole state, he says:
Never have I operated in a more difficult environment. Ventura County combines a difficult government environment with a difficult employee base with a difficult customer base.
So he left. Voted with his feet. Went Galt. Here are some of his bullet points:
- The regulatory environment was so onerous it took years to do simple common sense improvements.
- California has a higher unemployment tax than other states. It was a seasonal business, and some employees collected unemployment while spending the off season in Mexico.
- The prices charged customers were locked in by an agreement with the landlord. So with the coming increase of the minimum wage they had no way to offset the new expense.
- "A local attorney held regular evening meetings with my employees to brainstorm new ways the could sue our company under arcane California law. "
- Finally, the customers from Los Angeles were not exemplary citizens: "At most locations, we would get 1 arrest every month or two (at most). In Ventura we could get 5-10 arrests a day. In the end, I found myself running a location where I would never take my own family. "
This is just one business person's anecdote, but there are probably stories like this all over the state of California. And while some states are better than others, over regulation is a national problem. One wonders why some South American country doesn't offer a free market environment and raid North America for business just like Texas is doing to California.