Jamba Juice is leaving California.
No, the stores where you get all those yummy smoothies for $6 a pop will still be around but their corporate headquarters are moving.
That's another 120 jobs leaving the state on top of thousands that have already left.
Jamba has occupied leased space in Emeryville at the eastern end of the Bay Bridge since 2006. The high cost of doing business in California is prompting the company to evacuate its cool location in favor of a suburb of hot Dallas.
Jamba chief executive David Pace said, "Specifically, the move will allow us to reduce costs, attract and retain talent and provide a more central location for our market expansion plans."
The politically incorrect take on this is simply: Sacramento policies continue to destroy business in California. Let me expand on that: Liberal policies at both the state and national level are driving companies to the cheapest places to do business and that's sometimes outside of the U.S. (Remember when Hershey closed its Oakdale plant in 2007 and transported 575 jobs to Monterrey, Mexico where labor costs were 10 percent of U.S. costs yet the cost of chocolate bars continues to go so high you're tempted to swear off sweets?)
Policies adopted by the likes of Jerry Brown and Gavin Newsome are burdensome and costly. For the eighth consecutive year, California rates as the worst state for business in Chief Executive magazine. And Democrats continue to be dismissive about the results of their regulating-the-crap-out-of-everyone. Denial is not a good strategy to keep jobs in California.
If Jamba is anything like the 9,000 companies that have moved their headquarters or diverted projects to "other than California," they can expect a savings of 20 to 35 percent. It's always about the money.
A study by Joseph Vranich of Spectrum Locations Solutions, an Irvine site-selection consultancy, produced a report highlighting recent business decisions to avoid California. According to a November National Review story written by Sarah Rumpf, "California's elected officials dismiss stories about businesses leaving the state as anecdotal propaganda, but it's hard to argue with the 200-plus pages of divestment events that Vranich's report lists."
Vranich details 1,510 "divestment" events between 2008 and 2014 but notes the number is incomplete. There are untold small business decisions that aren't part of the report.
When Toyota pulled three plants from California - taking 3,000 jobs with them - as it expanded headquarters in Plano, Texas, Gov. Moonbeam told the Wall Street Journal: "We've got a few problems, we have lots of little burdens and regulations and taxes. But smart people figure out how to make it." WSJ replied: "California's problem is that smart people have figured out they can make it better elsewhere."
The problem is California has elected officials who aren't as smart as they expect business leaders to be. To borrow Brown's flippant attitude, the proper attitude should be: "California needs to reduce taxes and regulations and costs. Smart people could make that happen but Sacramento is full of dummies."
But as the Washington Times notes, neither Brown nor the state Legislature "have plans to do anything about it. Until they do, only the brave, if not foolish, set up a business in California."
The voters put them in office so blame politicians all you want, it's the people of California who continue to endorse this anti-business environment.
Lest you think it's just a lax business environment in Texas creating that huge sucking sound, think about other cost drivers other than high taxes and regulations. There is the high price of housing and commercial real estate, costly electricity, union power, and high labor costs. State policies affect those costs for sure. For instance, because of California's stiff environmental regulations, gasoline prices are some 50 to 60 cents higher than what the rest of the nation pay. Think of the "California blend" as a regressive tax on the low- and middle-income who must drive to work.
When you consider all the other companies fleeing California for places like Reno, Las Vegas, Seattle, Phoenix, Tempe, Portland, Salt Lake City, Denver, Scottsdale, Colorado Springs, Pittsburgh, Nashville, and even Cary N.C., you must trace the smell back to Sacramento where something is rotten.
It's not just the 120 payrolls Jamba is taking to Texas - it's the ripple effect. Think about the empty space which will generate no rent for the building owner. Think about the 120 people who won't be buying big screen TVs at any Bay Area retailers, or furniture at IKEA, the restaurants which won't be serving meals, the taxes that won't be paid to California.
Among the corporations which have left in recent years are:
• Nissan, which left Gardena for Tennessee;
• Farmer Brothers Coffee, taking 350 well-paying jobs to another state and saving $15 million a year outside of the Golden State;
• Raytheon Space and Airborne Systems left El Segundo to McKinney, Texas.;
• eBay, which left the Bay Area to build a $287 million data center in Salt Lake City;
• Chevron is moving 800 jobs from their Bay Area headquarters to Texas;
• Waste Connections shifted more than 100 jobs from Folsom to Texas;
• Occidental Petroleum;
• RifleGear moving to Plano, Texas;
• Carl's Jr., which located to Nashville;
• Games maker Electronic Arts opened its new facility in Salt Lake City where around 100 employees are at work;
• Awesome Products of Buena Park, a cleaning products manufacturer, spent $40 million to expand its Arkansas plant in 2010;
• Beckman Coulter, a Brea biomedical company, spent $18.2 million and creating 95 jobs in Indianapolis;
• Vetrazzo, a Richmond company that turns recycled glass into countertops, moved to Georgia;
• SMA America LLC, a Rocklin maker of components for solar power systems, built a $200 million plant in Denver and hired 200 people;
• Enfinity Corporation, a Belgium based solar development company, relocated its U.S. headquarters from Sacramento to Sandy Springs, Ga.;
• Power-One, a Camarillo maker of solar power equipment, opened a manufacturing plant in Phoenix, where it is adding 350 jobs.
Folks, you can't dismiss such losses. A look at the longer list will give you an indication of just how California is suffering.
No place is suffering in California like our Valley, where there are no high-paying jobs and few jobs outside of minimum-wage retail. Median family income in California is $70,231 but just $56,996 in Stanislaus County. Things are worse in Merced County, $48,429.
Agriculture continues to be our economic lifeblood yet we have bureaucrats in Sacramento and Washington who create water policies that favor fish over farmers and threat our water supply. Never mind the fact that we feed the world.
Instead of learning from their mistakes, lawmakers in Sacramento just keep twisting the thumbscrews to business even tighter. Gov. Brown made a deal with the devil to jack up the minimum wage to $15 an hour by the year 2022. On top of that, the state just expanded its paid family leave pay from 55 percent to 70 percent by 2018.
Sacramento lawmakers who continue to drain the profit from businesses remind me of fast-food workers who steal food thinking it's free. Every penny of doing business - either theft by employees or Sacramento extortionists - affects the bottom line. When costs get too high, businesses leave or fold up.
If we really want out of this mess, voters need to quit electing anti-business leaders in favor of ones who start emulating at what Texas is doing. I don't want to hear the likes of Jerry Brown screaming "Wait, don't leave" when you're the one who gave them reason TO leave. You can't have your cake and eat it too.
How do you feel? Let Jeff know by emailing him at firstname.lastname@example.org