California… you have me coming…
…and going… to Texas.
In this issue…
Where are businesses moving to? Let’s look at the facts.
Minimum wage is at $17 already, complete with a $2000 signing bonus.
Will stockings be hung by the chimney with care, or still on the container ship?
California should wear the cone of shame
The Hoover Institute produced an Economics Working Paper (#21117 if you must know) about the departure of company headquarters from California. From January 2018 through June 2021, 272 headquarters have moved out of state – that we know of; some just quietly reduce their presence. Texas got 114, Tennessee got 25 and Arizona, 17. Here is a list of IE companies that have made the departure:
KVP International – Chino - pet products, in particular, the “cone of shame” - Texas
Merrick Engineering – Corona - The hangers in your closet are probably made by Merrick – Texas
National Hot Rod Association (NHRA) – Pomona – Hot Rod Racing - Indiana
O.W. Lee – Ontario – VERY high end patio products. - Texas
Panic Plastics – Upland – plastic packaging – Idaho
Quetico – Chino – 3PL Logistics – Arizona
Saleen Performance Parts – Riverside to Texas
Synergy Blue – Palm Desert – casino gaming solutions – Las Vegas (that just makes sense)
The Icee Company – Ontario – I bet you didn’t even know Icee was in Ontario - Tennessee
Et tu, Icee? … sigh.
As a business owner, are you going to stay or are you going to go? Less companies here mean less competition for you. I have always said California is expensive, but everything is included, good and bad. You have to know the rules to play the game in this state which includes having the contact information of a good business attorney. And they better be familiar with employment law and PAGA.
Wages for the IE
Pepsi Beverages in Riverside is looking to fill 60 positions with hourly wages starting at $17 and going to $25 with a sign-on bonus of $2000.
Michael’s is also hiring 400 seasonal workers with similar wages
Walmart nationwide is hiring 20,000 workers; they state their average wage for supply chain workers is $20.37
While the legal minimum wage may not yet be $15/hour, competition mixed with worker’s fear of covid has pushed it up far beyond that figure.
I’m not sure what you have to do to keep workers but I’m guessing at some point you’ll have to supply them with Happy Meals and give them the time off to eat it. At any rate, the base rate for warehouse workers in the IE is set. Are you up for the Pepsi Challenge?
The Holiday Season and the Supply Chain – Again.
Lockdown in Ho Chi Minh! No, not a new MCU movie but a documentary about what Viet Nam is doing to contain covid.
Ho Chi Minh City has been in a lockdown since July 9 – really. The military will bring you your groceries.
And this matters because… Viet Nam accounts for a third of U.S. footwear manufacturing and a fifth of U.S apparel manufacturing.
More than half of Nike’s footwear is made there, so expect to pay more for your Air Jordans come Christmas, IF you can get them.
The lesson here: keep your eye on your supply chain. As a business owner, you need to account for the impact of this stuff on your vendors and, if possible, plan for a way around it.
Is there any good news? I will find some so stay tuned for next week’s Report.
