Small businesses in California face a death by a thousand cuts. Inflated workers compensation costs, double-digit effective state tax rates, strict environmental regulations, and sky-high rents make the state a pain to do business in. A recent analysis by Chief Executive Magazine ranks California dead last among states for doing business in 2019. In June, Mitsubishi Motors announced it’s moving its U.S. headquarters from Southern California to Tennessee, joining a growing list of businesses heading east.
Then there’s the Private Attorneys General Act (PAGA), which is no mere flesh wound. For affected businesses, it’s often a near-mortal blow that tarnishes sentiment toward the Golden State. My small manufacturing business was victimized by PAGA. But instead of packing in and packing up, we’re staying to fight. The trade association I founded to reform PAGA is suing the state, arguing that the law violates the state and U.S. constitutions.