If you are looking to move a business or just want relocate to find a job, California and New York rank consistently on the low end of the attraction scale. The SCRAM™ Index (States Creating Real Absolute Messes), shows these two states rank number 50th and 49th, respectively, making them perfect for the Buffet Counterintuitive Relocation Strategy (BCRS) of “running to where everyone is running from”.
The SCRAM Index is a “sophisticated” model which combines a Standard of Living Rank (by state)[i] with the Tax Favorability Ranking (by state)[ii]. Looking at the Standard of Living Index, New York ranks 37 of out of 51 states, but its dead last position in Tax Favorability creates some real attributes for relocation. California places 47th in the Cost of Living Index, but ends up being the winner of SCRAM index using the BCRS model by placing 49th in Tax Favorability Ranking. California’s combination of high taxes and low standard of living makes the Golden State, well golden in the places to relocate by 6.5 points.
Perhaps the SCRAM™ index could be augmented by a study on Economic Freedom. Using the George Mason University (Mercatus Center) study of Economic Freedom, California and New York top out the list at 49 and 50 respectively. While California has a lock on the most business re-locations (approximately 5.4 per week (Vranich, 2011)), New York claims the top spot for the exodus of people. According to Forbes:
At No.1 on our list, New York is expected to wave goodbye to 49,000 more people than it gains this year. The state has seen a steady loss of residents over the past five years, losing an average of 100,000 people per year. Karp explains that, because New York is a large state, it may report greater movement than others, but notes that population size is not the only reason residents are fleeing (Goudreau, 2010).
Adding to New York’s distinction, Small Business and Entrepreneurship Council (SBEC) rated the Empire State the third worst place to start a business, behind Washington D.C. and New Jersey (Keating, 2010). California placed a disappointing sixth worst behind Rhode Island and Maine. Since New Jersey only placed 40th on the SCRAM™ index, it was not part of the consideration, but Washington D.C. should be given some consideration since if it was part of the SCRAM™ index, it placed just behind California nosing New York into third place.
Using the Buffet Counterintuitive Relocation Strategy, one must also consider staying away from the states with positive ratings in the SCRAM™ index (Delaware, Colorado, Virginia, Indiana, Missouri, South Dakota, Illinois, Utah, Washington, Michigan, Minnesota, Florida, Georgia, Pennsylvania, and Texas; as well as the SBEC ratings: South Dakota, Texas, Nevada, Wyoming, Washington, Florida, Alabama, Alaska, Ohio, Colorado, South Carolina, Mississippi, Oklahoma, Virginia, and Missouri; and the Freedom Rankings: New Hampshire, South Dakota, Indiana, Idaho, Missouri, Nevada, Colorado, Oregon, Virginia, North Dakota, Florida, Oklahoma, Iowa, Texas, and Georgia.
Relocating your family or a business is a difficult decision, but using the BCRS [when the market is selling, you should be buying] strategy, the SCRAM™ index can direct you to the right conclusion. In the Land of Opposites, government regulation and high taxes show us the way to prosperity.Opposite day will likely be in effect until November of 2012 and if you understand that, this article will make perfect sense.
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Goudreau, J. (2010, December 8) States people are fleeing. Forbes.com http://www.forbes.com/2010/12/06/top-states-people-are-moving-housing-market-opinions-new-york_2.html
Keating, R. (2010, December 9).Small Business Survival Index 2010. Business News. Retrieved from http://www.sbecouncil.org/news/display.cfm?ID=4099
Sorens, J. & Ruger, W. (2011, June 7). Freedom in the United States. George Mason University: Mercatus Center. Retrieved from http://mercatus.org/freedom-50-states-2011.
Vranich. J. (2011, June 20). California business departures increasing: Now five times higher than in 2009. The Business Relocation Coach. Retrieved from http://thebusinessrelocationcoach.blogspot.com/2011/06/calif-business-departures-increasing.html
[i] http://isteve.blogspot.com/2005/05/standard-of-living-by-state.html
[ii] http://www.taxfoundation.org/research/show/22658.html