Lessons of the California Exodus

Commentary, Economy, Lee Harding

“I wish they all could be California girls,” sang the Beach Boys. In their heyday, midwest farmers’ daughters, east coast girls, and northern girls would have been quite happy to embrace sunny California, as would plenty of guys. Not so anymore. Since 2007, more people have left California than arrived. The Golden State is tarnished by high taxes, a misguided approach to energy, and business-killing policies. And it’s only getting worse.

Between 2007 and 2016, five million Americans moved to California—but six million left. And the hemorrhaging isn’t done. A 2019 survey by Edelman Trust found that 53 percent of Californians are thinking of leaving, including 63 percent of millenials. Also, 62 percent feel the state’s best days are in the past.

Why would so many leave America’s most populous state, blessed with beautiful beaches and 49 of the Fortune 500 companies? Because the birthplace of the hippy movement is a socialist hipster paradise, not a practical one. It takes the highest income tax rate, the highest sales tax rate, and even the highest gas taxes of any state to pay for this wannabe utopia. The result is more hell than heaven, complete with rampant crime, homelessness, and drug addiction.

Melinda Temblador told the Facebook group “CA Exodus and Ex-CAers” that she left “Kommiefornia” due to the high cost of everything, extreme moral decay and [being] pretty sick of bearing the cost of freeloaders for their free medical, free college, free free free stuff while I slave away staying awake at night wondering how I am going to pay for my daughter’s college tuition but the illegal next door gets it for free.

Some examples illustrate. Randa Moore left Santa Rosa for Florida. She told CalMatters that she keeps more in her pocket despite making less money and working fewer hours. “We were working 10-16 hours a day, seven days a week, every holiday and were still struggling to buy groceries,” she said. “I miss what it used to be. Before the industries were destroyed as well as the middle class . . . The poor have no chance to survive.”

These are just two of the 691,000 people who left the state in 2018. Only 501,000 moved in, leaving a net loss of 190,000. Jobs are the biggest reason people leave California, according to Moneywise, accounting for 41 percent of departures. Family reasons are second at 25 percent, and retirement third at 22.

Thousands of employers, employees, and seniors cannot make ends meet. CNBC ranks California as the most expensive state to do business and second only to Hawaii in its cost of living.

Renewable energy, another big idea of the big government, has become a big waste. How ironic! Last June, the L.A. Times reported that California set two records in the same week—the most solar power ever added to the electric grid, and the most solar power ever taken offline, since 40 percent of it wasn’t needed. That problem won’t be solved soon. Sometimes California even other states to take excess solar power since the cost of storage batteries would be “laughably high.” 

California has considerable problems at 34 percent renewable power, yet still aims for 60 percent. Customers pay some of the highest electricity rates in the country, yet endure rolling blackouts that leave some without power for days. Regardless, Los Angeles Mayor Eric Garcetti plans to shut down three gas plants. That might be one reason why the L.A. County shrunk by nearly 100,000 people in 2018 alone.

San Francisco spawned both Uber and Airbnb, but new state laws threaten the gig economy. That’s unfortunate. Upwork found that nearly half of the 57 million Americans who work in the gig economy do so because they are “unable to work for a traditional employer due to personal circumstances.” These opportunities are often taken by the elderly or disabled.

Now the gig is up. New legislation called AB5 leaves companies less able to classify their workers as independent contractors. Business Insider says one million jobs are at stake, including 7,200 in media. Vox Media laid off 200 freelancers in advance of the legislation and replaced them with 20 full-time workers. The state government will spend $20 million just to enforce the new legislation, as if its $1.3 trillion of public debt wasn’t burden enough.

It’s no coincidence more Californians move to Texas than anywhere else—86,000 in 2018 alone. The annual Chief Executive survey ranked Texas first and California last for business friendliness in each of the past two years. California could stem the tide if its government embraced the oil industry and lower taxes. As it stands, the Lone Star State shines all the brighter as California keeps having blackouts.

 

Lee Harding is a Research Fellow for the Frontier Centre for Public Policy.