Earlier this year, Tesla announced that they would be opening an office in Austin, Texas that would house around 5,000 employees. With that announcement, they joined other notable companies, such as Toyota, Charles Schwab, and Fidelity that have opened offices in Texas over the last few years. While the Lone Star State has many benefits, including good cost of living, housing at a variety of price points, access to arts and sports, and racial and ethnic diversity, it seems as if one thing is the main driving factor. Texas is very business friendly, and as a bonus has no personal or corporate state income tax.
But Texas is not the only place these businesses are moving to. Looking at the map below, Florida and some areas of both Arizona and Colorado have also become popular growth spots for headquarters since 2016. Southern Arizona, Las Vegas, Houston, Lansing, Michigan, and the San Francisco Bay area show the highest decline rates.
On the second map below, we can see the change in the number of employees at headquarters locations from 2016 to 2020.
From these maps, we noticed a few trends and patterns. First, we see a flight from expensive downtowns like San Francisco and New York City, which wasn’t surprising to us. The second is a movement from high tax/regulation states like Washington, California, New York, New Jersey, and Massachusetts towards more business-friendly locations such as Texas, Tennessee and Florida. Major areas of growth include Dallas/Fort Worth, Nashville, Tampa-St Petersburg, Orlando, Miami, Chicago, and Charlotte. Of these, the growth in Chicago is surprising given that Illinois isn’t typically seen as a business friendly state, but it is largely due to the relocation of Boeing headquarters from Seattle.
In terms of raw numbers, the counties with the most loss of employees are:
- Williamson, TX -20,821
- King, WA -19,178
- Schenectady, NY -16553
- Bergen, NJ -12,982
- Orange, CA -10,341
The counties with the most growth are:
- Cook IL -37,103
- Davidson, TN -34,936
- Olmstead, MN -27,115
- Dallas, TX -24,964
- Arlington, VA -20,077
- Orange, FL -17801
Overall, Los Angeles and the San Francisco suburbs still have growth, mostly because tech companies prefer to be in these areas. While some companies have moved (notably Toyota out of Los Angeles) there is enough new growth in businesses and employees to off-set the loss.