California's Disappearing Businesses

California's Disappearing Businesses

California is losing businesses at a faster rate than the rest of the nation. The Bureau of Labor Statistics has the hard evidence: by the end of 2012, there were 1.3 million businesses left in California, 73,000 less than the year before, a 5.2% drop. 

The second-fastest drop in number of businesses was in Massachusetts, where 5,200 businesses were lost. The second highest percentage of businesses lost was in Kansas, where there was a 3.1% drop.

Nebraska grew fastest, with a 11.9% growth rate for businesses. Either businesses are leaving California in droves or they are closing; Kevin Klowden, an economist at the Milken Institute’s California Center, said, “It’s more likely the disappearance of a number of businesses than it is businesses leaving California,”  and added that the recession hit California quite hard.

Yet Florida, which has the second-most businesses and was hurt in a similar fashion to California as its real estate plummeted, grew new businesses at the seventh-fastest rate in the country.

California’s tax burden is the fourth highest in the nation, barely behind New York, New Jersey and Connecticut. Florida ranks 31st.