The Great California Exodus: A Closer Look

[Valin]

The Manhattan Institute:

Tom Gray & Robert Scardamalia

Sept. 2012

 

Executive Summary

or decades after World War II, California was a destination for Americans in search of a better life. In many people’s minds, it was the state with more jobs, more space, more sunlight, and more opportunity. They voted with their feet, and California grew spectacularly (its population increased by 137 percent between 1960 and 2010). However, this golden age of migration into the state is over. For the past two decades, California has been sending more people to other American states than it receives from them. Since 1990, the state has lost nearly 3.4 million residents through this migration.

 

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What has caused California’s transformation from a “pull in” to a “push out” state? The data have revealed several crucial drivers. One is chronic economic adversity (in most years, California unemployment is above the national average). Another is density: the Los Angeles and Orange County region now has a population density of 6,999.3 per square mile—well ahead of New York or Chicago. Dense coastal areas are a source of internal migration, as people seek more space in California’s interior, as well as migration to other states. A third factor is state and local governments’ constant fiscal instability, which sends at least two discouraging messages to businesses and individuals. One is that they cannot count on state and local governments to provide essential services—much less, tax breaks or other incentives. Second, chronically out-of-balance budgets can be seen as tax hikes waiting to happen.

 

The data also reveal the motives that drive individuals and businesses to leave California. One of these, of course, is work. States with low unemployment rates, such as Texas, are drawing people from California, whose rate is above the national average. Taxation also appears to be a factor, especially as it contributes to the business climate and, in turn, jobs. Most of the destination states favored by Californians have lower taxes. States that have gained the most at California’s expense are rated as having better business climates. The data suggest that many cost drivers—taxes, regulations, the high price of housing and commercial real estate, costly electricity, union power, and high labor costs—are prompting businesses to locate outside California, thus helping to drive the exodus.

 

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Here is what the government State/Local don't seem to understand

"An economic trend cannot continue, it won't."

Herbert Stein

Why are so many businesses and of course people leaving? The question is, is the powers that be in California even able to really ask themselves this question?

[Valin]

Ricochet: California's Economic Policies: As Bad As the Dust Bowl

Troy Senik

9/25/12

 

As our guest contributor Autumn Carter has been sharing with us this wee (and as I have been noting for years), California, once a national trendsetter, has devolved into a sort of first-world banana republic, serving as an object lesson in the power of bad policy to corrupt even the most appealing slices of the map.

 

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The preferred solution of the Golden State's political class? A proposal to raise taxes to national highs on this November's ballot, calling nothing so much to mind as Churchill's quip about the "confirmed un-teachability of mankind."

 

A suggestion to California lawmakers: when the fruits of your labor are replicating the effects of a natural disaster, you're doing something wrong.

 

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Doing something wrong? Its not possible that the same party that has governed for the last 30 year could be wrong. They have the best of intentions...and that is what counts.