Gavin Newsom, with his nose growing, said that few are leaving California. Guess he does not count the 2,000 professional jobs from Disney that are moving to Florida. Or that Tesla built a $5 billion battery factory in Nevada—not California. Or that Toyota, Scwaab and others have left the State. Think about the number of friends who have left—know of anybody that moved here from Texas?
“In 2011, California’s population increased by 350,000, a gain roughly the size of Anaheim. Only ten years later, California’s population growth dropped to virtually zero. This is in spite of the fact that California’s natural rate of population increase (births minus deaths) and foreign immigration are still positive. These increases, however, are being totally offset by ever-increasing numbers of people moving out of the state.
That number has increased from a net outflow of 20,000 in 2013 to 261,000 in 2020. In 2019, the last year comparable statewide data are available, California was losing about a half percent (-0.51) of its population to other states. In sharp contrast, a state like Florida, the state that will soon welcome Disney’s Imagineers, had a net inflow that added more than a half percent (+0.62) to its population.
For the first time in history, instead of gaining congressional representation, we lost one. Were it not for illegal aliens, we would have lost 3-4 more. California is a disaster are. Failed schools, bad roads, high taxes, criminals protected and honest people forced to either buy a gun or move. If the Recall does not succeed, expect California to be locked down again.
What explains the California exodus?
By Jim Doti and Raymond Sfeir, Press Telegram, 7/30/21
Walt Disney Co. recently announced that 2,000 workers in California will be relocated to Florida. Many of these workers are part of Disney’s innovative “Imagineers,” a Disney unit often credited with creating the “magic” in the Magic Kingdom. In a letter to employees, the chairman of Disney Parks, Josh D’Amaro, cited Florida’s “business-friendly climate and its lower cost of living with no income tax” as reasons for the move.
Disney’s announced move of some of its most talented and creative workers to Florida should not be taken lightly. It’s part of a California exodus that began at least ten years ago.
In 2011, California’s population increased by 350,000, a gain roughly the size of Anaheim. Only ten years later, California’s population growth dropped to virtually zero. This is in spite of the fact that California’s natural rate of population increase (births minus deaths) and foreign immigration are still positive. These increases, however, are being totally offset by ever-increasing numbers of people moving out of the state.
That number has increased from a net outflow of 20,000 in 2013 to 261,000 in 2020. In 2019, the last year comparable statewide data are available, California was losing about a half percent (-0.51) of its population to other states. In sharp contrast, a state like Florida, the state that will soon welcome Disney’s Imagineers, had a net inflow that added more than a half percent (+0.62) to its population.
So, what explains this wide disparity? Alternatively put, why are people voting with their feet by moving out of California and into Florida?
Using a statistical technique known as multiple regression analysis, we identified four variables that were found to be significant in explaining net domestic migration in all 50 states. Those four variables were in order of importance 1. State regulation, 2. State and local taxes, 3. Climate, 4. Job growth.
Surprisingly, we did not find median housing prices as having a significant impact on people’s migration decisions. And while the desirability of a state’s overall climate was an important explanatory factor, it wasn’t significant in explaining the difference between California’s net migration outflow and Florida’s inflow. The reason for this is that both states ranked high in climate, with California at #1 and Florida at #3. And while Florida’s stronger job growth of 2.1% versus California’s 1.5% helped slightly in attracting people to Florida, the impact was not significant.
Our research findings rigorously show that the two major reasons that account for California’s net outflow and Florida’s inflow are regulatory policies and state and local taxes. In terms of regulation, George Mason University’s Mercatus Center ranks California as having more regulation than any other state in the nation. As for state and local taxes, the Tax Foundation’s State Business Climate Index places California as the second highest in the nation, while Florida is the fourth lowest.
These differences in regulation and state and local taxes, according to our equation, explain virtually all of California’s net migration outflow and Florida’s inflow. To be more precise, the difference between California’s outflow of -0.51% and Florida’s inflow of +0.62% is 1.13%. Our research indicates that 0.68% of that difference is explained by California’s highly regulated business environment and that 0.50% is explained by its higher taxes. The total of these two impacts (0.68% + 0.50%) is 1.18% — almost equal to the 1.13% difference in net migration between California and Florida.
California’s political focus, especially over the last ten years, has been on increasing taxes and regulation. Regrettably, California’s public servants and especially its Governor have decided to ignore the effects of burdensome regulation and high relative state and local taxes on where people decide to live and work.
Since voting in the ballot box isn’t working to change that political dynamic, Californians are voting with their feet. The exodus of the Imagineers brings attention to that reality. But that loss of 2,000 highly talented and creative people, as detrimental as it is to California’s future, is just a small part of the droves of people leaving the state.
In a recent Wall Street Journal article, Gerry Parsky, the chairman of Aurora Capital Partners and California’s Commission on the 21st Century Economy, wrote, “The Golden State has been a beacon of opportunity for decades, and I have been proud to live here for 40 years ….(but) there are deeper long term issues that threaten the state’s finances and its desirability as a place to live and do business.”
Mr. Parsky’s quote calls to mind John Steinbeck’s classic novel, The Grapes of Wrath, where the Joad family moved from Oklahoma to California in search of the Golden State. A more realistic plotline now would be for Ma and Pa Joad’s descendants to pick up their stakes and head back East to our nation’s new beacons of opportunity.
