During the Great
Depression, some 1.3 million Americans—epitomized by the Joad family in John
Steinbeck's "The Grapes of Wrath"—flocked to California from the
heartland. To keep out the so-called Okies, the state enacted a law barring
indigent migrants (the law was later declared unconstitutional). Los Angeles
even set up a border patrol on the city limits. Soon the state may need to
build a fence to keep latter-day Joads from leaving.
Over the past two
decades, a net 3.4 million people have moved out of California for other
states. But contrary to conservative lore, there has been no millionaires'
march to Texas or other states with no income tax. In fact, since 2005
California has experienced a net in-migration of households earning
more than $200,000, according to the U.S. Census's American Community Survey.
As it happens,
most of California's outward-bound migrants are low- to middle-income, with
relatively little education: those typically employed in agriculture,
construction, manufacturing, hospitality and to some extent natural-resource
extraction. Their median household income is about $40,000—two-thirds of the
statewide median—and about 95% earn less than $80,000. Only one in 10 has a
college degree, compared with 30% of California's population. Roughly 40% of the people leaving are
Hispanic.
Even while
California's Hispanic population has grown by more than 1.5 million since 2005,
thanks to high birth rates and foreign immigration, two Hispanics have moved
out for every one that has moved in from another state. By contrast, four
Hispanics from other states have settled in Texas and Arizona for every three
that have left.
It's not unusual
for immigrants or their descendants to move in pursuit of a better life. That's
the history of America. But it is ironic that many of the intended
beneficiaries of California's liberal government are running for the state
line—and that progressive policies appear to be what's driving them away.
For starters,
zoning laws, which liberals favor to control "suburban sprawl," have
constrained California's housing supply and ratcheted up prices. As Harvard
public-policy professor Daniel Shoag documents in a working paper, land
restrictions became common in high-income enclaves during the 1970s—coinciding
with the burgeoning of California's real-estate bubble—and have increased
income-based segregation and inequality.
Housing in
California is on average 2.7 times more expensive than in Texas. The median house
costs $459 per square foot in San Francisco and $323 in San Jose, but just $84
in Houston, according to chief economist Jed Kolko of the San-Francisco based
real-estate firm Trulia . Housing in
California is cheaper inland than on the coast, but good luck finding a job.
The median home in Fresno costs $95 per square foot, but the unemployment rate
is nearly 15%, compared with 6% in Houston.
California's
staggering labor and energy costs—it has the nation's most stringent fuel and
renewable standards—have helped kill hundreds of thousands of manufacturing
jobs in California's interior. Note: Those are jobs that traditionally served
as entry points to the middle class. The Golden State has shed a third of its
manufacturing base over the past decade. And while the U.S. has added nearly
500,000 manufacturing jobs over the past two years, California's heavy industry
continues to erode.
Campbell Soup announced in
September that it was closing its 65-year-old plant in Sacramento, which
employed 700 workers, and shifting production to North Carolina, Ohio and
Texas. Chevron is moving
800 technical positions—in other words, jobs that aren't physically stationed
on California rigs—to Houston.
Non-manufacturing
businesses are also moving or expanding operations where labor, land, energy
and capital are cheaper. Comcast announced in
the fall that it is moving 1,000 call-center jobs out of California because of
the "high cost of doing business." Facebook, eBay and
LegalZoom have opened up Texas offices in the past few years, while PayPal,
Yelp and Maxwell Technologies have pushed
into Phoenix.
Meanwhile, small
businesses that can't leave California so easily have been slow to invest
because they are financially squeezed. Rents are prohibitive, and Sacramento
takes 9.3% of every dollar over $49,000—and 13.3% over $1 million—that an
individual or small business owner earns.
By contrast, small
businesses in Texas have been sprouting like bluebonnets in the spring to meet
the demands of an expanding population. More people mean more mouths to feed,
bodies to clothe and homes to build. All told, Texas has added twice as many
jobs as California has since 1990. California's rate of job growth since the
recession ended in June 2009 has trailed Texas's by two-thirds.
In a sharp
reversal of the 1930s, Texas and the Sun Belt have supplanted the Golden State
as a magnet for jobs and people, while California has become America's leading
labor exporter. Democrats, however, don't seem to mind so long as the state
maintains its high-tech hegemony.
In his State of
the State address this year, Gov. Jerry Brown boasted: "We have the
inventors, the dreamers, the entrepreneurs, the venture capitalists. . . . When
I first came to Sacramento, Steve Jobs and Steve Wozniak had not yet
invented their personal computer. There was no wind-generated electricity, and
we didn't have the nation's most advanced building and appliance efficiency
standards as we later adopted."
Recall, however,
that the Okies—poor as they may have been—provided a gigantic pool of labor
that fueled California's postwar boom and helped transform the Golden State
into the world's eighth-largest economy. The Democrats who have had firm
control of the state during its years of decline would do well to remember that
a society's most valuable asset is always its people, regardless of their
wealth or clout.
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