By Recker McDowell —
Elon Musk is promising to move Tesla’s headquarters out of California to Texas or Nevada over his frustrations with the Golden State’s COVID-19 shutdowns.
Musk will not be alone in evaluating and re-evaluating where to locate and land jobs after the pandemic ends.
COVID-19 has already cost the economy more than 21 million jobs. Some of those job losses are permanent with pandemic hastening the demise of some retailers, restaurants, department stores, media companies and small businesses.
Other jobs will come back as the economy reopens. Innovators and decisionmakers such Elon Musk will be looking at how to navigate social distancing, how to avoid outbreaks and where to locate jobs and operations.
States and communities will be judged on both their public health and economic responses to the Coronavirus. Entrepreneurs, CEOs, professional and creative workers will be deciding where they want to work and live. Some displaced workers will relocate to new places.
Musk is looking at Texas and Nevada in part because of California’s more stringent COVID-19 restrictions. Texas and Nevada also do not have state income taxes and offer cheaper costs than New York, California, and Seattle.
Arizona also has cost and regulatory advantages for businesses compared to California and other more expensive markets.
Musk is also looking at which states are best for him to grow his businesses (Tesla and SpaceX). He’s looking at which states are ‘open for business’ and open for innovation beyond COVID-19.
States and regions with Coronavirus lockdowns that did not try to find a balance between public health and jobs and the economy could suffer post-pandemic. Some governors and mayors have worked with businesses to get the economy reopen responsibly. That is the path Arizona Governor Doug Ducey has sought. Other elected officials have been more focused on shutdown orders and press appearances. They come across as tone-deaf to the economic hardships caused by the virus.
Communities will also have to prove their innovation and creativity during and after COVID-19. Cities and regions who are acting fast and finding creative ways to help small businesses and restaurants will save jobs now.
They are also likely to invite more job growth and new investments going forward.
Cities and states that are innovative and less burdensome with regulations and land-use can help save jobs now. They will also be able to parlay best practices going forward to benefit their economies.
The pandemic will also expand the use of technology and working from home. Cities have an opportunity to become leaders on those fronts or get left behind.
COVID-19 is causing unprecedented economic pain.
It is a challenge to find the balance between public health and jobs.
How state and regions respond to that challenge will impact their economies now and their economic development going forward.