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California Ranks Last in ‘Business Friendliness,’ #1 in Electricity Cost – and Another Company Flees the State
Smithfield Foods, Inc. is joining the ever-going ranks of businesses fleeing California due to the exorbitant cost of business – and, especially, of energy – in the Golden State.
On Friday, Smithfield announced that it will cease all harvest and processing operations in its Vernon, California plant in early 2023 and begin planning to close all of its farms in the state.
“Smithfield is taking these steps due to the escalating cost of doing business in California,” the company said in a press release.
Fully 272 corporate headquarters left California between January 1, 2018 and June 30, 2021, a Hoover Institute study finds, with the rate of exit doubling in the first six months of 2021 from its full-year 2020 rate.
While California ranks as one of the worst states in terms of overall business cost, “business friendliness,” and business tax climate - the high cost of utilities is a major factor fueling the exodus, as California businesses have the highest average cost of electricity:
Highest average electricity price (17.74 cents per kWh) of 48 lower states and D.C. (Approve.com 2021 Business Cost Index)
48th in overall business costs (WalletHub)
Worst (50th) in terms of state “business friendliness” (CNBC study)
48th in 2022 State Business Tax Climate Index (The Tax Foundation)In California, the cost of utilities is 3.5 times higher per head to produce pork compared to the 45 other U.S. plants Smithfield operates, a company spokesman told The Wall Street Journal.
In addition to the high “fixed” costs of California’s electrical system, public programs like CARE and wildfire mitigation, are also driving up the price of electricity in the state, a UC Berkeley study concluded, Cal Matters reports.
“When households adopt solar, they’re not paying their fair share,” the study’ co-author Meredith Fowlie told Cal Matters. While solar users generate power that decreases their bills, they still rely on the state’s electric grid for much of their power consumption — without paying for its fixed costs like others do, Fowlie explained.
That's a new twist - blaming solar power for your high energy costs. Whatever - if the exodus continues, California's huge economy may come crashing down.
(Score: -1, Troll) by Anonymous Coward on Monday June 13 2022, @11:39PM (18 children)
Yes, it's all a fabrication of that vast right-wing conspiracy. And that endless stream of eastward bound cars is just your imagination. And all the old TV shows set in California are exactly what it's like living there today. The dream lives... load up the truck and move to Beverly.
Come and knock on our door
We've been waiting for you
Where kisses are hers and hers and his
Three's Company, too
(Score: 1, Interesting) by Anonymous Coward on Tuesday June 14 2022, @02:04AM (9 children)
Eh, I met some rednecks on the way out on my way in. Good riddance. I moved out of flyover country to get away from that kind of idiot. Charming idiots in their way, but still idiots.
Actually it's pretty fucking good here in the city. I haven't seen a single Confederate flag, no rolling coal, and only a couple loud trucks here and there.
I think it's more the case that the losers are leaving to go grow Smithfield bacon for us at poverty wages, because they can't handle the hard work we do in the city. I know that the work is hard, because it's valued so highly according to the exchange theory of value.
Only a Marxist would argue that an hour of my time watching build scripts from my air conditioned 15th floor office and making the occasional tweak here and there is equivalent to an hour doing tractor repair in hundred degree heat.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @02:42AM (6 children)
An I-5 commute and 15th floor script kiddie life might appeal to you now. Don't assume you are a cross-section of anything. You make Wally sound productive.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @03:25AM (5 children)
I could see myself retiring back to flyover country when I'm 50 or so. I wouldn't have to work another day in my life.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @04:56PM (4 children)
When you hit the magic four-oh, and those young bucks start flooding the place, and you realize there isn't an automatic pathway to the top floor... there's a line bein' drawn.
Some people saw that line when outgo was always going to exceed income, when property tax meant they could no longer max-out their 401-K, when they looked around the middle-class neighborhood and realized that nearly every house had five, six or seven cars parked out front, and they wondered where all those people could sleep. When the... oh, just mark this post as "Troll" and let the whole thing be a surprise.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @05:35PM (1 child)
lol. You sound like a capitalcel. Hit the magic four-oh, and I'm netting more than I ever have. (Yep, retirement looms in under a decade! W007!) All I had to do was move out of flyover country.
Maybe all those people are just living beyond their means. They should stop buying iphones with $300/month plans. Do they really need a $200/mo 10 gigabit internet with ESPN? They need better budgeting skills. They shouldn't be having children they can't afford, and don't tell me I need to pay for your kids like some kind of Trotskyist, Luxemburgist, or Marxist-Leninist! Don't go into debt, especially not at 25% APR! Why haven't they invested any of their money? You should be saving during good times so you aren't crushed when there are bad times. Make sure you have a spare gas can for when you run out of gas on the side of the road.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @05:45PM
As I said earlier, "Don't assume you are a cross-section of anything." It sounds like you're trying not to become a victim of hubris, but it's amazing what happens around us when we try to mind our own business. How about a new catchphrase... Well, You know, California Happens.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @07:26PM (1 child)
Whenever I see more than 5 cars parked at a house it's either godfather's birthday or that neighbourhood has really poor public transport.
Imagine the traffic jams!
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @09:17PM
I noticed it first in the Bay Area, >30-years ago. Drive through a regular neighborhood, and parking was bumper-to-bumper on both sides of the street. They had/have funny regulations on building, so before they priced themselves out of the market, it was already tough on regular people.
There's just one like that in my non-CA neighborhood. It's like they have some kind of factory in the garage, too. No morning commute, because they apparently work in the factory. No kids, no pets, no chemical smells.
Garage businesses aren't unusual these days, except that CA probably has restrictions against it. I needed a big cutting job done, and this guy had a huge laser-cutting rig in his garage. Wonder what he does in his spare bedroom. Wonder what his electric bill is like.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @03:29PM (1 child)
"I know that the work is hard, because it's valued so highly according to the exchange theory of value."
The exchange theory of value ... *sigh* ... is not the only theory out there. And it is itself contextually dependent, and has no bearing on the hardness of labour. Even if you followed it to the last detail, nothing in the exchange theory of value relates the value of an exchange to the labour involved in production at any side of an exchange.
I mean, great rhetorical spin. 10/10 for theatrics. 0/10 for economics.
"Only a Marxist would argue that an hour of my time watching build scripts from my air conditioned 15th floor office and making the occasional tweak here and there is equivalent to an hour doing tractor repair in hundred degree heat."
Well, actually, you see - no. Marxists wouldn't generally argue that for a number of reasons, and you also fail at getting marxism right. At an absolute minimum, the context of the work in terms of the embodied labour in the equipment would play a role in the calculus.
You managed to completely misconstrue two different theories of value in one post. Maybe you'd like to give up the economics and concentrate on coding? At least in code the compiler will tell you when you can't even get your semantics right.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @04:39PM
Marxism isn't about economics. It's about fairness or equity or meeting new people while standing in lines for food, or something like that.
(Score: 5, Touché) by DeathMonkey on Tuesday June 14 2022, @03:01PM (6 children)
And yet, the population of CA continues to increase. [worldpopulationreview.com]
People move around for all sort of reasons and Texans even move to California.
Wake me up if their population actually drops.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @04:29PM
Now, look at the population mix in California now, versus earlier. Productive, constructive, creative people are the ones who are leaving. You know, the people who want to actively participate in a growing, vibrant, society.
(Score: -1, Troll) by Anonymous Coward on Tuesday June 14 2022, @05:19PM (2 children)
Now do a search for "california population decline 2022" for a list of articles saying exactly the opposite.
(Score: 2) by DeathMonkey on Tuesday June 14 2022, @08:01PM (1 child)
Needing to narrow your scope to half a year is a pretty good indicator of a cherry-pick.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @09:21PM
Okay, live in the past. This is about California today. The article linked above says "And yet, the population of CA continues to increase." Continues means, ahem, now.
(Score: 1) by khallow on Wednesday June 15 2022, @11:11PM (1 child)
Something wrong with the narrative.
(Score: 0) by Anonymous Coward on Thursday June 16 2022, @04:38AM
California numbers are known to be iffy. And then you have the southern influx to that "sanctuary state" nobody wants to count accurately, except when asking for money. Maybe U-Haul knows for sure. All that glitters isn't the Golden State:
Census Bureau Says It "Significantly" Miscounted Population In More Than 1/4 Of States In 2020 Census [notthebee.com]
(Score: -1, Troll) by Anonymous Coward on Tuesday June 14 2022, @05:16PM
- Report: Thousands of Californians Flee to Mexico in Search of More Affordable Living [breitbart.com]