Following up on the Indiana Law Blog entry from Monday, March 22, titled "Environment - Indiana's economic development advantage in the manufacturing area," and the entry from March 24 titled "More on the Iron Nugget Plant," is an article from The Fresno Bee that incidentally highlights some of Indiana's other advantages in the economic development wars between the states. The theme of the lengthy article is that people from other parts of California are relocating to the San Joaquin Valley because of its "affordable housing." However, the piece continues, the cost of housing has doubled in the Valley over the past 5 years, unemployment is high, and wages are low. Then comes the discussion that caught my eye [emphasis added]:
At Sportsmobile West Inc. in south Fresno, workers install televisions, beds, toilets, sinks and stoves into vans, turning them into custom-built motor homes.Posted by Marcia Oddi at March 28, 2004 05:54 PMEmployees complete a van a day -- and sell about 350 a year, says company president Alan Feld.
But it's not enough to keep up with demand. Feld would like to build another plant and double his 50-person work force.
Instead, he's thinking of leaving the state.
"The state of California makes more money on my product than I do," says Feld, who outgrew two locations before buying his 60,000-square-foot plant on Bagley Avenue in 2002.
Last year, company sales rose by 20%, but profits dropped 45%, Feld says.
Various taxes stripped $1.4 million from last year's $10 million in sales.
His workers' compensation insurance premiums run about $1,000 a day. In three years, the premiums went from being No. 30 on his business expense list to his third-largest cost.
Sportsmobile West's insurance premium for machine shop workers is now about 1,560% higher in California than it is at the company's plant in Huntington, Ind. The California premium for salespeople -- employees who don't work on the manufacturing side -- is about 1,940% higher than Indiana's rate.
Aware of California's high rates, other states are trying to recruit Sportsmobile.
"Is workers' compensation crushing your bottom line?" asks a brochure from New Mexico. "You might find the New Mexico business climate better for your health."