California Lost 5.2% of its Businesses in 2012


The good news is that California still lost less businesses than Massachusetts, the “You Didn’t Build That State” and the Soviet Union. The bad news is that it’s hard to fund a giant welfare state when all the businesses have moved to Texas. And even Canada.

Every now and then, one state governor or another will head to California to pitch businesses on leaving the Golden State. Canada’s immigration chief has been trying his luck, too

You know things are bad when Canada is poaching your businesses by promising a friendlier free enterprise environment.

There were 1.3 million businesses in California at the end of 2012, 5.2 percent fewer than in the previous year (that’s about 73,000 fewer).

But don’t worry. Most of those businesses aren’t leaving the environs of California for somewhere better.

“It’s more likely the disappearance of a number of businesses than it is businesses leaving California,” says Kevin Klowden, an economist at the Milken Institute’s California Center.

Whew. So California businesses aren’t leaving. They’re just mysteriously vanishing into thin air. Must be that recovery we keep hearing so much about.

In other words, it’s not exactly clear why California’s businesses are disappearing. Florida, another state hard hit by the bursting of the real estate bubble, and the state with the second most businesses, added new businesses at the nation’s seventh-fastest rate.

It’s a mystery all right. One state has low taxes and a Republican governor. One state has high taxes and a Democrat. One state is adding businesses and in the other state, businesses are mysteriously vanishing.

Can any junior detectives solve this mystery before all of California’s businesses disappear?

  • cynthia curran

    Well, the La area is not very business oriented and in fact Orange County to the south is doing a lot better not saying there are problems with the state government but the Bay area, Placer in Northern California near Sac and the coastal counties outside of La are doing better since they are usually under 40 percent Hispanic. The OC has unemployment similar to Houston or Dallas Texas and White not creating as many jobs has a lot less afro-americans which means it doesn’t have the two ethinic group problem of the big metro areas of Texas both Hispanics and blacks just Hispanics. Its expensive this is why conservative Republicans run to Texas .

    • Jon Johnson


  • Bryan Schmick

    It irritates me when the Democrat party complains about Republican outsourcing turns around and advocates for higher business taxes, energy costs, and employment costs. Time for the fair tax. Reduce DC corruption, promote business expansion, tax under the table payments (e.g. drug dealers, illegal immigrants, etc) at the same rate as income employed workers, get rid of the nonsense of what is taxable income, etc.

    • objectivefactsmatter

      “It irritates me when the Democrat party complains about Republican outsourcing turns around and advocates for higher business taxes, energy costs, and employment costs. ”
      They’re communists. This is their incremental plan. The only businesses left standing will be those with strong connections to the party. They’ll be more or less state run the way the Soviets did things.

    • tatave

      on outsourcing just ask Kerry’s wife,she knows quite a bit about it.Maybe she is planning to open a new plant in Detroit.

  • Matthew

    Just remember that Canada ranks 6th on the Economic Freedom Scale. The U.S. is now #10. And our current federal government has been doing everything to bring new business here.

  • cupera1

    I remember watching all pictures and video the people that drove
    out of East Germany into Hungary and across the border to West Germany.
    They came with everything they owned strapped to those little cars, Trabants: smaller than the smart car. The wall came down less than 6 months later. The cracks are showing in the dam and in a few years the remaining people that run the business with be gone from the state as well. We will see Greece in the USA. The riots of the Obama phone people start will dwarf any unrest that we have seen before

  • infrahuman

    As “objectivefactsmatter” has said below: they are not democrats, they are communists (aka progressives). They know as well as we do, how to grow an economy and achieve prosperity. Their goal for decades, has been to collapse the economy, destroy the middle class, weaken the bonds of family and religion and get as much of the populous as possible dependent on the government for survival. The result is a Communist utopia for those in power and dire poverty and helplessness for the rest of us. They are only a few pieces of legislation, executive orders and regulatory mandates from fully implementing a totalitarian regime. Obama has not made any mistakes. This is an ends-justify-the-means Dictator-in-Waiting. He won’t have to wait much longer!

  • Michael

    I really hate going to a site and having the AUDIO wake up everyone in the house when I did not click on any link to listen to anything. I won’t be back, And sadly I agree with most of what is written in the article.

  • Banksters_Rule_the_World

    The bear is facing left on their state flag. They might as well change the name to the Socialist Republic of Commiefornia.

  • cynthia curran

    — It was not surprising that Texas held out.

    For years, Texas was among a handful of states that required every resident seeking help with grocery bills to first be fingerprinted, an exercise typically associated with criminals.

    Even though Republican Gov. Rick Perry ultimately got rid of the policy, Texas — always seeking to whittle down “big government” — remains one of the most effective states at keeping its poor out of the giant federal food stamp program.

    But it is not No. 1. That distinction belongs to California.

    Liberal California discourages eligible people from signing up for food stamps at rates conservative activists elsewhere envy. Only about half of the Californians who qualify for help get it.

    That stands in contrast to other states, including some deeply Republican ones, that enroll 80% to 90% of those with incomes low enough to qualify.

    That public policy paradox — one of the country’s most liberal states is the stingiest on one of the nation’s biggest benefit programs — has several causes, some intentional, some not. It also has two clear consequences: Millions of Californians don’t get help, and the state leaves hundreds of millions of dollars of federal money on the table.
    I told conservatives that San Diego and Orange County had lower food stamp usage than Dallas and Houston and Austin, this is proof. It was Arnold and Pete Wlison that harded the requriments. Jerrry Brown is changing it though.
    The federal government pays for almost all of the food stamp program, which provides cash aid to about 46 million

  • LeavingCalifornia

    The 5.2% may not seem like a large percent, but that percentage amounts
    to about 73,000 companies less than the previous year. One would hope
    those companies have found new places to do business, but it could be
    said that the number accounts for companies that have folded as well.
    Trying to keep up with the strict laws and the amount of time needed to
    attain permits within California is another challenge business owners

    There are many who are frustrated with California and the state it is in. We have an outlet for those who are looking for a place to voice their frustration and challenges with doing business in California at