California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

Little research has been known about trends from interstate business relocation,
and its effects, specifically on employment change in California.  But a recent
report by the Public Policy Institute of California has found that contrary to
popular claims, job losses from interstate business relocations are negligible.

Although California lost more jobs from relocation out of the state than it gained from
relocation of businesses into the state, the average annual job loss over the period
1992–2004 equaled only 0.06 percent of employment, or about 11,000 jobs out of nearly
18 million jobs in today’s economy. Out-migration accounts for 1.6 percent of overall job
destruction, and in-migration accounts for 1.0 percent of overall job creation. The vast
majority of job creation is due to the expansion of existing establishments and the births of
new ones.

These findings establish that migration is too small in magnitude to account for noticeable changes
in California’s overall economic performance. The key implication is that public policy responses
should be focused on sources of job creation and loss than those associated with business relocation.

I am Tim Johnson and this has been the California Business Minute.