ComebackTown is published by David Sher to begin a discussion on a better Birmingham.
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Alabama beats California — and no, I’m not talking about college football.
Many Californians would bristle at the notion of being bested by Alabama. But employers aren’t so picky:
Toyota and Mazda announced recently they’ll invest north of $1.6 billion dollars to build a new factory and create over 4,000 good-paying jobs in Limestone County, Alabama. This only increases the state’s vehicle production: In 2016, Alabama assembled over one million vehicles employing over 40,000 employees.
Fifteen states were competing for the Toyota-Mazda joint venture; California was not even on the bench. Perhaps Toyota remembers its experience with GM at New United Motor Manufacturing in Fremont, where the United Auto Workers union helped shut down the plant in 2010. Today, California is home to just one automaker, Tesla — and yet some the state’s representatives seem more interested in encouraging a union organizing driving at the plant rather than encouraging the company’s continued success.
California has a well-earned reputation of being business unfriendly, and according to one analysis has lost over 1,700 companies in the past decade. It really is not difficult to figure out why, given that we have some of the highest minimum wages, tax rates, and workers compensation rates in the nation. Our state’s workers compensation loss adjustment ratio is twice as high as Alabama’s, meaning we are paying more due to litigation and permanent disability claims.
But set aside the business gripes. California no longer has a monopoly on “cool,” either.
Yes, our climate is still great — but talented young professional can find great culture and a great food scene in Birmingham just as well as Berkeley. They can also afford to live there: The median home price in Alabama is $126,500, while California it’s just shy of a half-million dollars. Companies and workers have taken note: Today, Alabama has the third most technical workforce in the United States with about 17 percent of the workforce in science, technology, and engineering, according to a Bloomberg analysis. Aerojet-Rocketdyne announced last year they were leaving California and moving to Alabama; it will cost us 1,100 jobs and a company who has been here since the 1950s.
If you couldn’t tell, I’m more than a casual observer of Alabama. The company I run, Timely Industries in Southern California, competes with Alabama daily because it’s the home of our biggest competitor. We make pre-finished steel door frames and supply our frames all over the United States and have done so since 1971. But the minimum wage for our company will be $13.25 per hour this year; in Alabama, it will be $7.25.
We’re also hamstrung by the state’s onerous legal environment. Last year, Timely was sued under the Private Attorneys General Act. A flexible work schedule was a perk and allowed our employees — over 75 of whom were immediate or extended family members — to eat together. The employees loved it, but the trial lawyers (and two disgruntled employees) did not. The PAGA lawsuit cost Timely more than a million dollars. Alabama does not have such a law; our competitor’s employees can take lunch whenever they want, and will never have to worry about paying a million dollars for something as absurd as a lunch break.
As the state legislature returns to Sacramento for a new session, my hope is that they’ll choose to be less like themselves — and more like Alabama. The future of our state’s small and mid-sized businesses (not to mention the people they employ) depends on it.
This piece originally appeared in the Orange County Register. It was republished with permission of author.
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David Sher is Co-Founder of AmSher Compassionate Collections. He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).
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