Kevin O'Leary Calls California a "Dumpster Fire" For Business

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Chevron has announced its decision to move its headquarters from San Ramon, CA, to Houston, TX. This move adds to what has been termed the "California exodus," with numerous businesses leaving the state over the past few years.

Speaking with Fox Business, Kevin O'Leary, known for his role as a Shark Tank entrepreneur, offered his perspective on the situation. O'Leary pointed out that a notable portion of these relocations has occurred since 2019 when Gavin Newsom became California's governor. While acknowledging Newsom as a "great guy," O'Leary criticized his leadership, suggesting that he lacks effective executional skills and awareness of the state's issues. O'Leary went so far as to compare California's policies to those of Venezuela, suggesting they are flawed and detrimental to business growth.

O'Leary, the owner of multiple food companies, said he stays away from growing into California because of the state's high minimum wage. California raised its minimum wage from $16 to $20 in April, which had an effect on large food service companies. In an economy where consumers are sensitive to price fluctuations, companies such as Chipotle have boosted prices in order to offset higher operating costs. This is a risky approach.

Beyond Business Policies: Other Influencing Factors

Although O'Leary holds Newsom mostly responsible, the trend of companies departing California predates his administration. Over 237 enterprises, including 11 Fortune 1000 companies, have left the state since 2005, according to the California Policy Institute. This number has only increased due to recent announcements.

Relocations are caused by factors other than company policies. The pricey real estate market and high cost of living in California make it difficult for many workers to purchase housing. According to the Public Policy Institute of California, the state has a greater percentage of cost-burdened households than the national average, which is driving people and businesses to look for less expensive options.

Texas as a Prime Destination for Relocating Businesses

Texas has emerged as a top destination for businesses leaving California. Of the 237 companies that have relocated, 120 have moved to Texas, which now boasts more Fortune 500 companies than any other state. The Dallas and Austin areas are particularly popular among relocating businesses, according to Commercial Property Executive. Florida, known for its no-income-tax policy and business-friendly environment, is also a favored destination, with cities like Orlando and Miami attracting new companies.

What do you think? Is O'Leary being unfair or is he accurate? Leave your comment below.

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