Californians dreaming of someplace else to live
My attraction to California began fifty years ago. The Rose Parade on New Years Day brought back old memories of deep snow and long pointed icicles hanging from our farmhouse roof in Northeastern Ohio. Watching the Rose Parade was a family tradition for us and millions of others living in the Snow Belt. After the cows had been fed, the porch and sidewalk shoveled of snow and grandma had her New Year’s goose in the oven, we would all gather around our old 12” black and white RCA TV to watch thousands of smiling Californians parading down the sunny streets of Pasadena. I remembered thinking how much fun it must be to live in such a wonderful land of sunshine, palm trees and parades.
The weather didn’t being me to California but our mild climate has been a historic attraction for millions of people from other states. In addition to our sunshine, greater economic opportunities exist here than any other place in the country. The California economy, as measured by the production goods and services, is one of the top ten economies in the world. The state has an abundance of natural resources, our per capita personal income at $39,358 and median family income of $62,000, ranks high among other states, we are the technology center of the world; we lead the nation in agriculture production and enjoy a diversified ethnicity. So why is it that more people are moving out of California than moving here?
Our state’s population is growing. Its growth, according to state demographer Linda Gage, with the Department of Finance, was the result of 200,000 foreign immigrants (that we can account for) and 565,000 new births. The state’s demographics also show that 238,000 souls permanently departed this life, leaving the state’s population just under 38 million. The annual study by the Department of Finance also showed that 89,000 more people moved out of California than moved here from all other states. What’s up with that?
As an example, Los Angeles County increased its population by 91,000 births and an influx of 70,000 new residents from foreign countries but L.A County experienced a net loss of 115,000 residents to other California counties and other states. Since 2000, a half million more Californians have left Los Angeles County than have moved there from other places. Orange County had 22,000 more people moving out then moving in. Despite our lower housing prices, less congestion and a high quality of life, El Dorado County’s yearly population increase of 2,427 was the lowest in recent history, mostly attributed to 2,022 new births. Last year, according to the U.S. Census, California had the nation’s second largest domestic population outflow. The exodus, according to Gage, is in some ways similar to the early 1990s, when a national recession and tumbling housing market prompted 1.2 million people to move to other states.
A record eight million people moved from one state to another last year. Why are they passing on California? Since our current housing market has taken the blame for every social and economic ill imaginable over the last two years, it’s not surprising that some want to blame falling real estate prices for the high number of Californians leaving for other places. But to say Californians are leaving because home prices are falling is over simplifying the underlying problem. Besides, weren’t the high home prices and lack of affordable housing between 2001 and 2005 preventing people from moving to our Golden State?
California is not the only state experiencing increased foreclosures, lower property values and fewer sales. Florida, Ohio, Michigan, Illinois, Nevada and Arizona all have similar housing markets, yet they all reported more people moving into their state than moving out. Has California lost its national attraction and, if so, what can be done about it?
Noted author, former presidential advisor and free-market economist, Author Laffer, recently wrote an article for the Wall Street Journal about the causes of out-migration. The article discusses, why some states continue to attract people while others continue to loose residents to other states. “Former citizens are generally the highest achievers and those with the most wealth, capital and entrepreneurial drive, leaving the state much less economically productive.” Laffer’s new research publication “Rich States/Poor States” is an in-depth analysis of policies, which foster economic growth and prosperity in one state and economic malaise in another. By using 16 variables including: property, personal and corporate taxes, right-to-work laws, education, government debt and tort litigation treatment, Laffer ranks all the states from 1 to 50, with 1 as the best for economic growth and 50 the worst. California ranked near the bottom at 41. Laffer’s findings support the theory that states which keep spending and taxes low, exhibit the best economic results, while states that follow the tax-and spend path, lag behind in attracting people and capital.
Slower growth has its advantages. It allows us to catch our breath between the next sprint. Since the Gold Rush, California has experienced many booms and their subsequent letdowns. It is troubling, however, that California has developed the reputation of exporting more residents to other states than we are attracting. State and local leaders should examine polices that attract wealth, capital and the people who are responsible for bringing them into our state and county.
The weather didn’t being me to California but our mild climate has been a historic attraction for millions of people from other states. In addition to our sunshine, greater economic opportunities exist here than any other place in the country. The California economy, as measured by the production goods and services, is one of the top ten economies in the world. The state has an abundance of natural resources, our per capita personal income at $39,358 and median family income of $62,000, ranks high among other states, we are the technology center of the world; we lead the nation in agriculture production and enjoy a diversified ethnicity. So why is it that more people are moving out of California than moving here?
Our state’s population is growing. Its growth, according to state demographer Linda Gage, with the Department of Finance, was the result of 200,000 foreign immigrants (that we can account for) and 565,000 new births. The state’s demographics also show that 238,000 souls permanently departed this life, leaving the state’s population just under 38 million. The annual study by the Department of Finance also showed that 89,000 more people moved out of California than moved here from all other states. What’s up with that?
As an example, Los Angeles County increased its population by 91,000 births and an influx of 70,000 new residents from foreign countries but L.A County experienced a net loss of 115,000 residents to other California counties and other states. Since 2000, a half million more Californians have left Los Angeles County than have moved there from other places. Orange County had 22,000 more people moving out then moving in. Despite our lower housing prices, less congestion and a high quality of life, El Dorado County’s yearly population increase of 2,427 was the lowest in recent history, mostly attributed to 2,022 new births. Last year, according to the U.S. Census, California had the nation’s second largest domestic population outflow. The exodus, according to Gage, is in some ways similar to the early 1990s, when a national recession and tumbling housing market prompted 1.2 million people to move to other states.
A record eight million people moved from one state to another last year. Why are they passing on California? Since our current housing market has taken the blame for every social and economic ill imaginable over the last two years, it’s not surprising that some want to blame falling real estate prices for the high number of Californians leaving for other places. But to say Californians are leaving because home prices are falling is over simplifying the underlying problem. Besides, weren’t the high home prices and lack of affordable housing between 2001 and 2005 preventing people from moving to our Golden State?
California is not the only state experiencing increased foreclosures, lower property values and fewer sales. Florida, Ohio, Michigan, Illinois, Nevada and Arizona all have similar housing markets, yet they all reported more people moving into their state than moving out. Has California lost its national attraction and, if so, what can be done about it?
Noted author, former presidential advisor and free-market economist, Author Laffer, recently wrote an article for the Wall Street Journal about the causes of out-migration. The article discusses, why some states continue to attract people while others continue to loose residents to other states. “Former citizens are generally the highest achievers and those with the most wealth, capital and entrepreneurial drive, leaving the state much less economically productive.” Laffer’s new research publication “Rich States/Poor States” is an in-depth analysis of policies, which foster economic growth and prosperity in one state and economic malaise in another. By using 16 variables including: property, personal and corporate taxes, right-to-work laws, education, government debt and tort litigation treatment, Laffer ranks all the states from 1 to 50, with 1 as the best for economic growth and 50 the worst. California ranked near the bottom at 41. Laffer’s findings support the theory that states which keep spending and taxes low, exhibit the best economic results, while states that follow the tax-and spend path, lag behind in attracting people and capital.
Slower growth has its advantages. It allows us to catch our breath between the next sprint. Since the Gold Rush, California has experienced many booms and their subsequent letdowns. It is troubling, however, that California has developed the reputation of exporting more residents to other states than we are attracting. State and local leaders should examine polices that attract wealth, capital and the people who are responsible for bringing them into our state and county.
posted by Ken Calhoon at 8:27 AM
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