Business Owners Have the Blue State Blues

News & Politics

A sneaky tsunami of businesses relocating out of blue states may be coming if these states continue down the path of anti-business policies. According to a recent survey, high taxes and burdensome regulations are on the minds of business owners.


According to the Freedom Economy Index (FEI), only 13% of employers in California are happy with their location. Forty percent are either planning a move or considering it. Another 27% want to move but can’t make the business case. Yet. And the results in California are seen nationwide. While over 75% of red state business owners say they are happy in their current location, only about 30% of blue state employers say the same. 

The FEI is a joint project between RedBalloon and PublicSquare that surveys 80,000 employers monthly. Reflecting on the February results, RedBallon CEO Andrew Crapuchettes asserted, “The debate is over. Red states that keep taxes low and minimize regulations are where businesses are thriving.” 

He added that employers are continually running the numbers. For blue state business owners, just one more ridiculous tax or punishing regulation could impact the bottom line enough to make a move financially savvy. “Eventually, there will be a visible groundswell of businesses relocating that will negatively impact blue state economies,” he predicted. 

Related: Shop With a Cop: Customers at SF Store Must Have Escorts to Prevent Theft


Anti-business policies like high taxes and heavy-handed regulations are not the only factors that have employers wanting to check out of the Hotel California and other blue state accommodations. High crime rates and high energy costs figure prominently. In California, 52.8% report that crime in their area increased significantly in the last 12 months. That is 20 points higher than the national average. 

However, the impact of woke public schools came in third, beating crime and high fuel costs as a motivation to move. Over 50% of employers cited them as factors in business decision-making. In California, over 75% point to the public education system as a consideration. 

When asked about employment trends, almost 40% of business owners report that more than 30% of their employees have a second job. The same 40% said the Great Resignation is still causing significant turnover, and 50% say that employee demands for remote and hybrid work are the same or higher than last year. Slightly more than 10% expect to lay off employees this year, and more than 60% say they will hold current employment levels steady. Only about 15% indicate they will be adding positions. 


Related: Job ‘Gains’ Are for Migrants as U.S. Men Kept Out of Workforce

When asked about the business environment, over half of respondents reported their revenue was either lower or much lower than one year ago. A similar share reported they are either pessimistic or worried about the future of their business. And despite the media and the White House trying to happy talk a slight reduction in the inflation rate, over 15% of respondents still say lower inflation is the number one thing they need to help their business grow. Seventy-five percent report supplier price increases in the last 30 days. And about half expect the Federal Reserve to increase or keep interest rates the same. 

So, while the blue state blues have some business owners dreaming of leaving states like California, the disastrous set of policies known as Bidenomics is hitting them no matter where they operate. 

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