Corporations and plastic bags

A closer look at what attracts companies to Chico

The author is a Chico native and graduate of Chico State who holds a Ph.D. in economics from the University of Wyoming and is currently a research fellow at the University of Oxford, UK.

At a campaign rally in Iowa last August, Mitt Romney infamously said, “Corporations are people, my friends.” I think he was unjustly criticized for this. His point was simply that businesses are owned and operated by living, breathing, thinking people. This is important to consider when designing strategies to promote job creation and growth in Chico.

The conservative approach to job creation is simple: Cut taxes, deregulate and “they will come.” For example, when asked what role the city of Chico should play in local job creation, conservative Tea Party candidate for the City Council Toby Schindelbeck says, “Reduce sign regulations, permit fees and eliminate other confiscatory fines and fees.” At first glance, this seems reasonable. If the cost of doing business in Modesto is less than in Chico, a profit-maximizing firm would, in Schindelbeck’s view, set up shop in Modesto.

Many people who subscribe to this way of thinking, including Toby Schindelbeck, are in fact small-business owners. Enter Mitt’s comment. Small-business owners live near their businesses. Asking people why they moved to Chico is analogous to asking them why they chose to do business in Chico. Why did Mr. Schindelbeck move to Chico? Was it to capitalize on low tax rates and lax regulations? I doubt it. According to him, Chico isn’t business friendly. Rather, he and his wife likely fell in love with Bidwell Park, One-Mile, the farmers’ market, Butte Creek and Chico State. Maybe they thought Chico would be a nice place to raise a family.

These things define Chico and make it an attractive place to live—and own a business. In this context, raising taxes to enhance these attractions may be a smart strategy to promote growth. At the very least council members, and those running for a seat on the council, should support cheap regulations that make Chico more attractive to wealthy investors moving out of progressive cities like San Francisco and Los Angeles.

A plastic bag ban, for example, sends a signal to affluent “job creators” that Chico is a green city, full of conscientious people who value a clean environment. Not only is it good environmental policy, it’s good economic policy that would bring jobs to Chico.