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Obstacles in keeping companies, job lossess, structural problems in the big cities and authorities stubbornly trying to control individual and economic freedoms. States governed by Democrats, such as New York and California, are doing badly. And there are states, like Florida, that are smiling. The latest beneficiary is Texas, specifically its capital, Austin.
According to a Fox News report, Texas’ capital “is attracting corporate jobs and remote workers, lured by low costs and taxes. In that sense, there is something that is becoming very clear in recent days: high tax rates in the United States are benefiting states with lower tax burdens.” Basically, businesses don’t want to operate to fund expensive, populist Democratic policies.
The Austin case is the perfect example. The relocation of businesses to this city, reported in 2020, is estimated to create approximately 10,000 jobs. This figure, according to the Austin Chamber of Commerce, is the highest number in the city for a single year.
The generation of this level of employment would not only help to lower unemployment, but to also stimulate the local economy, as it would benefit the city’s restaurants, bars and shops that depend on tourism, and have been affected by the pandemic.
But what are the reasons that allowAustin to capture these corporate and remote jobs? According to Fox News, there are many developments that benefit Texas.
The first one is that the state doesn’t impose a state income tax. Another factor is the capital’s climate -Austin’s winters are relatively short and mild- and, with all the pandemic and health measures, this makes social distancing “easier in a city where houses tend to be spacious and many have backyards.”
All factors play a role, but one important thing is that Austin has managed to “remain cheaper than San Francisco, Brooklyn, and Manhattan by building tens of thousands of apartments over the last decade.
The benefits are obvious: those who migrate from New York and California are amazed at how easily they can get a house, how much cheaper they are, and how the state is not interested in lowering the income and profits of high-tax payers.
It is also worth making one thing clear: the pandemic accelerates the process of moving and finding new opportunities, but it is not the underlying reason.
There are facts that illustrate this. For example, in 2018, Texas was the second state in the country – only behind Florida – in receiving the most internal migration. Where did most of those people who decided to pack their bags in search of Texas benefits come from? From the state of California.
This according to a study by Yardi Systems reported in the Dallas News. “Texas ranks second on the list of the states where most people went to live in 2018, with almost 564,000 new residents,” the report says. Arizona, by the way, is another state that has received tens of thousands of Californians.
Capital embraces Austin
Fox News explains it well: “Some companies planted flag in Austin after receiving local tax incentives, such as Tesla Inc., based in Palo Alto, California. The electric car manufacturer said in July that it plans to build a factory outside Austin that could eventually employ more than 5,000 people.”
But Tesla isn’t alone. Other companies, such as asset manager Pacific Investment Management Co. –mostly known as Pimco– opened an office in Austin in 2018.
According to the Fox Network report, Patrick Feigley -head of sales for U.S. global wealth management and director of Pimco’s Austin office- said, “The city is somewhat centrally located and has a large number of qualified college graduates.”
In that regard, the company is expanding the Austin office and moving jobs in marketing and human resources from New York.
On the other hand, Greg Schwartz, executive director of the real estate company Tomo Newworks, mentioned that in Austin “it is much easier to hire. It’s much easier to get a house. It’s much easier to get business licenses than in other places.”
The company, based in Stamford, Connecticut, is preparing to open a branch office in the Texas capital.
As a sign of the development of the Texas capital, Austin not only attracts and seeks jobs and businesses, but also infrastructure improvements that benefit the city’s planning. According to the National Association of Apartments, “Austin added more new apartments -relative to the size of its real estate market- than any other major U.S. city between 2014 and 2018.”
Similarly, just as the city is showing many benefits for newcomers, it is also worth noting that conditions must improve for locals to continue to increase competitiveness. For in Austin, according to Fox, there is a perception that the city has never been less affordable. The key fact is that Dallas and Houston, being more cosmopolitan, the cost of living is cheaper than in Austin.
Democrats, beware, because not only Texas is profiting
It’s not just Austin who benefits from this “Run for your life!” According to a report by Blomberg, Goldman Sachs Group Inc. is seriously considering moving part of its asset management operations to Miami, Florida. Something that would put in check the financial sector’s concentration in New York, as explained in a previous article on El American.
And here’s a key fact, remote working, throughout 2020, represented an escape route to save jobs, maintain business productivity and even generate jobs. This “good fortune” of producing from home has been very successful for companies such as Goldman Sachs, since they can avoid costly rentals by reducing expenses and, in addition, facilitate operational moves.
So this whole cocktail that is motivating companies and the middle class to move from Democratic to Republican states is nothing new, much less surprising. In fact, it’s the logical thing to do.
Let’s be emphatic about one thing: migrating is one of the hardest things in the world. Leaving home in search of better opportunities, quality of life, happiness and freedom; it’s not for everyone.
For Californians and New Yorkers to move to Texas, Florida or other states where tax rates are not burdensome are serious symptoms of harmful state policies in New York and California.
That Goldman Sachs, a company that owes much of its fame to the “City that Never Sleeps,” is considering moving to Miami says a lot about the role of that state in creating the problem.
That Elon Musk is making his bags, and companies are leaving Silicon Valley and going straight to Texas is just another sign of the failure of Progressives in California.
And that Austin is taking jobs and businesses from Democratic states is the icing on the cake, showing that people are running away from regulations, high taxes, declining quality of life, and restrictions on freedom.