CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, AUGUST 5, 2016, OR THEREAFTER
BY THOMAS D. ELIAS
“WHO’S LEAVING STATE? NOT WHO YOU THINK”
FOR RELEASE: FRIDAY, AUGUST 5, 2016, OR THEREAFTER
BY THOMAS D. ELIAS
“WHO’S LEAVING STATE? NOT WHO YOU THINK”
For more than a generation,
opportunistic California politicians have barraged voters with woeful tales
about how the most productive, inventive, wealthy and enterprising Californians
are leaving this state in droves to avoid high taxes and excessive government
regulation.
These stories, used successfully by the likes of Pete Wilson and
Arnold Schwarzenegger while running for governor, and unsuccessfully by failed
candidates from Bill Simon to Meg Whitman and Neel Kashkari, tell of rich
Californians seeking greener pastures in more laissez faire states like Texas
and Idaho.
There’s only one problem with those
stories: They don’t match the facts, even though they are often purveyed by
folks with a financial stake in the fables, some of them business relocation
experts.
It’s not just that California has
outpaced the rest of America economically for most of the last 20 years. It’s
not merely that innovative businesses and venture capital investments here are
the largest and most successful in the world.
It’s not only that coastal California
real estate, property in the state’s most populous areas, brings more cash than
comparable real estate anywhere else in America except Manhattan, but also that
there are plenty of buyers around with the cash to pay seemingly outrageous
prices.
It’s also that truth matters little
anymore, with one of the principles peddled by master Nazi propagandist Josef
Goebbels in the 1930s and ‘40s proving at least somewhat correct: The more
often you repeat and broadcast an untruth, the more people will come to believe
it.
That especially holds when some
numbers appear to back up the untruth. In terms of people leaving California,
there is such a number: California had a net population outflow to other states
of 625,000 residents between 2007 and 2014. Newborn children and immigrants
more than made up for that loss, so don’t expect the state to lose
congressional or Electoral College clout after the next Census in 2020.
But the majority of those departing
are not the extremely prosperous residents about whom we so often hear
from folks described by Gov. Jerry Brown as California “declinists.”
Rather, of those who left during the
latest years for which statistics exist, the vast majority earned less than
$30,000 per year. A net total of 469,000
of those leaving possessed no college degree. Given the prevailing levels of
rents and home prices in California, it’s easy to see their financial motive in
leaving for far lower-priced states like Texas, Nevada, Oregon and Arizona.
But as lower-income
residents left there was a net increase of 52,700 residents from other states
making more than $50,000 per year who do have at least a bachelor’s degree. The
figures come from a Beacon Economics study released this spring (http://next10.org/sites/next10.huang.radicaldesigns.org/files/california-migration.pdf).
The upshot is that while it’s true
that a few big businesses have shifted their national headquarters out of
California primarily because it’s far cheaper for them to expand their
facilities in states with lower land prices, most of this state has not
suffered much. New businesses arise and succeed here faster and in larger
quantities than anywhere except perhaps Israel, also a center of high tech innovation.
Land values remain the primary reason
for businesses shifting headquarters or expansion outside California. It’s
difficult to attract and retain workers here with salaries under $50,000,
because of housing prices.
Said one executive, “I pay some of my
people with master’s degrees $70,000 and $80,000 a year and they still have no
hope of buying a house anywhere near Silicon Valley.”
That reality explains a lot of the
corporate expansion to cheaper states.
So does the price of raw land for expansion
in places like Las Vegas, Boise or Tucson, where empty desert abuts directly on
city limits. That situation is rare in California, but it makes large tracts of
land elsewhere available at very low prices.
The bottom line: Yes, this state has
lost some population to other states, but for the most part it has not been the
most creative, wealthiest and entrepreneurial Californians who left. Which
means that doomsaying politicians and urban “experts” who say the out-migration
numbers spell impending disaster are mostly blowing self-serving smoke.
-30-
Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, go to www.californiafocus.net
Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, go to www.californiafocus.net
No comments:
Post a Comment