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If California Is Doing So Great, Why Are So Many Leaving?
The New Geography ^ | 12/14/2010 | Bill Watkins

Posted on 12/14/2010 7:34:50 AM PST by SeekAndFind

CAbeach.jpg

Superficially at least, California’s problems are well known. Are they well understood? Apparently not.

About a year ago Time ran an article, "Why California is Still America's future," touting California's future, a future that includes gold-rush-like prosperity in an environmentally pure little piece of heaven, brought to us by "public-sector foresight."

More recently, Brett Arends' piece at Market Watch, "The Truth About California," is more of the same. California's governor elect, Jerry Brown, liked this piece so much that he tweeted a link to it.

The optimist’s argument about California’s future ultimately hinges on the creativity of the state’s vaunted tech sector, in large part driven by regulation promulgated by an enlightened political class and funded by a powerful venture capital sector.

No fundamentalist evangelical speaks with more conviction or faith than a California cheerleader expounding on the economic benefits of environmental purity brought about by command and control regulation.

The more honest cheerleaders acknowledge that California has challenges, including persistent budget problems. Arends denies even the existence of a budget problem, demanding "Er, no, actually. It’s your assertion. You do the math." Let me help you, Brett. The non-partisan California Legislative Analyst's Office has done the math. You can find it here. They expect budget shortfalls in excess of $20 billion a year throughout their forecast horizon. This is on annual revenues of less than $100 billion.

Last week the numbers got even worse, as the Governor-elect, Jerry Brown, acknowledged. The deficit may now be as much as $28 billion this year, and over $20 billion for the foreseeable future. This is more than a nuisance. There’s a reason, after all, why California has among the worst credit ratings of any state.

Most people outside of California haven't drank from this vat of the economic equivalent of LSD-laced Kool-Aid. People know that a state is in trouble when it has persistent intractable budget deficits, chronic domestic net out-migration, and 30 percent higher unemployment than the national average. Indeed, California’s joblessness, chronic budget deficits, governors, and credit rating have made the state the butt of jokes worldwide.

How bad are things in California? California's domestic migration has been negative every year since at least 1990. In fact, since 1990, according to the U.S. Census, 3,642,490 people, net, have left California. If they were in one city, it would be the third largest city in America, with a population 800,000 more than Chicago and within 200,000 of Los Angeles’ population.

We’re seeing a reversal of the depression-era migration from the Dust Bowl to California. While California has seen 3.6 million people leave, Texas has received over 1.4 million domestic migrants. Even Oklahoma and Arkansas have had net-positive domestic migration trends from California.

Those ultimate canaries in the coal mine, illegal immigrants, recognize California's problems. Twenty years ago, about half of all United States illegal immigrants went to California. Today, that’s down to about one in four.

The result of these migration trends is that California's share of the United States population has been declining.

What do these migrants see that so many of California's political class do not see? They see a lack of opportunity. California's share of United States jobs and output has declined since 1990, and its unemployment rate has remained persistently above the United States Average, only approaching the average during the housing boom.

California's unemployment is particularly troubling. As of October 2010, only two states, Nevada at 14.2 percent and Michigan at 12.8 percent, had higher unemployment rates than California's 12.4 percent. California's unemployment problem is particularly severe in its more rural counties. Twenty-five of California's 58 counties have unemployment rates higher than Nevada's:



These unemployment rates approach depression levels. Some will excuse many of them because they are in agricultural areas, but many assert that low Midwest unemployment rates are due to a booming agricultural sector. Which one is it?

California's unemployment problems are not limited to rural and agricultural areas. Most of Riverside County's population is very urban, yet the County's unemployment rate is 14.87 percent. On December 7th, the Wall Street Journal listed the unemployment rates for 49 of America's largest urban regions. California had six of the 19 metro areas with double-digit unemployment. These include such major cities San Diego, San Jose, and Los Angeles.

Just as rural areas are not California's only depressed areas, agriculture is not California's only ailing sector. From 2000 to 2009, the only California sectors to gain jobs were government, education and health services, and leisure and hospitality.

California's cheerleaders claim that the state's future is assured by a vibrant tech sector, but the data do not support that assertion. North Dakota's Praxis Strategy Group has performed analysis by job skills. They compare Scientific, Technical, Engineering, and Math (STEM) jobs across states. Their analysis shows that California is the Nation's ninth worst state in creating STEM jobs in post dot-com-bust years. It has produced far fewer new tech jobs than Texas, and far less on average, than the country over the past decade:



In this respect, California's precipitous decline is really quite shocking. In just a couple of decades, California has gone from being America's economic star, a destination for ambitious people from around the world and abundant with opportunity, to home of some of America's most distressed communities. It has been a man-made, slow motion tragedy perpetuated by a political class that is largely deluded.

The cheerleader’s faith in command and control regulation and environmental purity is so strong they cannot see anything that contradicts that faith.

But that faith is misplaced. Joel Kotkin, Zina Klapper, and I performed an extensive review of the economic impacts of one of California's most important greenhouse gas regulation, AB 32, and found that command and control regulation in general and AB 32 in particular is inefficient, cost jobs, and depress economic activity. California's Legislative Analyst's Office agrees, as evidenced by this report.

More depressing still are the growing ranks of what could be called “the resigned”. They simply have given up. These include a business leadership that is more interested in survival and accommodation than pushing an agenda for growth. Easier to get along here, and expand jobs and opportunities elsewhere, whether in other states or overseas.

Yet ultimately California’s future is what Californians make of it. No place on Earth has more natural amenities or a more benevolent climate. No place has a location more amenable to prosperity, located between thriving Pacific Rim economies and the entire North American market. No place has more economic potential.

But unless policy is changed, California's future is dismal, with the specter of stubbornly high unemployment, limited opportunity, and the continued exodus of the middle class. California's political class needs first to confront reality before we can hope to avoid a dismal future.

Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found at clucerf.org.

Photo by Stuck in Customs



TOPICS: Business/Economy; Culture/Society; News/Current Events; US: California
KEYWORDS: california; exodus
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1 posted on 12/14/2010 7:34:52 AM PST by SeekAndFind
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To: SeekAndFind

Atlas shrugged, packed and left.


2 posted on 12/14/2010 7:36:59 AM PST by Travis McGee (---www.EnemiesForeignAndDomestic.com---)
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To: SeekAndFind

California - great place to live, just wouldn’t want to reside there.


3 posted on 12/14/2010 7:38:17 AM PST by Jim 0216
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To: SeekAndFind
If California Is Doing So Great, Why Are So Many Leaving?

To make room for the mexicans.

4 posted on 12/14/2010 7:39:31 AM PST by The Sons of Liberty (Psalm 109:8 Let his days be few and let another take his office. - Mene, Mene, Tekel, Upharsin)
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To: SeekAndFind

The spin I heard the other day on our local radio the other day was that CA has actually “gained” population.

Methinks perhaps they are counting illegal alien births in that tally.

The only businesses thriving around here are the U Haul franchises.

It will get much worse now that Moonbeam is back AND the idiots here voted to allow the demtard legislature to force any budget they want on us with a simple majority.


5 posted on 12/14/2010 7:40:14 AM PST by jazminerose (o)
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To: SeekAndFind
Welcome to The Pipple's Republik of Kalifornication...

(The pipple are continually being screwed by the Republik)

6 posted on 12/14/2010 7:40:44 AM PST by Wings-n-Wind (The main things are the plain things!)
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To: The Sons of Liberty

If you read the article, you’ll see that even the illegals are saying “No” to California. Wow, huh?


7 posted on 12/14/2010 7:44:23 AM PST by piytar (0's idea of power: the capacity to inflict unlimited pain and suffering on another human being. 1984)
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To: Jim 0216

You can’t find better weather in any other state in the mainland.

The reason why many still stay is because the great weather is probably still worth thousands of dollars in taxes.


8 posted on 12/14/2010 7:45:07 AM PST by SeekAndFind
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To: SeekAndFind
The people who are staying are the people who the politicians of California want to stay. The people who are leaving are the people who the politicians of California want to leave.

In a way, it's a consequence of the fact that Americans can move anywhere in America they like. The scumbags like nice weather and beautiful Pacific ocean views as much as any of the rest of us. More scumbags per capita moved to California, just like more of every other catagory of society per capita moved to California. Only problem is, the scum voted their own into the legislature, and that's making the state kind of unattractive to the non-scum, who don't have the patience to put up with it.

California has to hit bottom. It's always been out front of national trends; maybe it'll be out front with the "hitting bottom" trend too. We'll see.

Full disclosure: I lived there when I was a little kid, and I'll never forget what it was like back in 1960.

9 posted on 12/14/2010 7:45:16 AM PST by Steely Tom (Obama goes on long after the thrill of Obama is gone)
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To: SeekAndFind

Worse yet, the liberals moving out of California are screwing up the states they move into!


10 posted on 12/14/2010 7:45:23 AM PST by pnh102 (Regarding liberalism, always attribute to malice what you think can be explained by stupidity. - Me)
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To: SeekAndFind
Although I think California is one of the most beautiful states I would have moved a long time ago..Give it to the Mexicans and blacks and lets not forget Jerry Brown..Lets see how the place turns out then..Old Jerry will have a tough time collecting taxes from those dead beat Gangs..Let him have it..
11 posted on 12/14/2010 7:47:11 AM PST by PLD
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To: SeekAndFind

California, which has been run by democrats for decades, is now feeling the effects of all their liberal policies forced on Californians by the legislature and a steady succession of liberal and RINO governors.

California now finds itself in the same boat as Michigan, Illinois, Massachusetts and many other states that are facing huge budget deficits and the distinct possibility of bankruptcies.

If it were up to the democrats, they would have turned states like Ohio and Pennsylvania into a failed state like Michigan which has been dominated by democrats for decades.

Such is the legacy of modern day unions.

The remedy is to get state and federal spending under the strictest of control and begin a nationwide campaign for pension reform.


12 posted on 12/14/2010 7:48:08 AM PST by Ev Reeman
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To: SeekAndFind

No one in their right mind would build a plant in California. You’d go somewhere where they want you.

Like China.

California’s problems are self-inflicted and they have yet to face them. The first step toward fixing a problem is admitting that you are the problem and California keeps heading down the same road as stubborn as anyone can be.

They have oil gurgling up through the ocean floor that they refuse to go after. To sit, bankrupt and unemployed while huge resources sit untouched is criminally stupid, and thats California.


13 posted on 12/14/2010 7:48:33 AM PST by marron
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To: SeekAndFind

I left this month and am not looking back!


14 posted on 12/14/2010 7:49:31 AM PST by JRios1968 (What is the difference between 0bama and his dog, Bo? Bo has papers.)
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To: SeekAndFind

Of course Time, that piece of garbage, ran an article about the state that is out of tune with the rest of the country and far behind.


15 posted on 12/14/2010 7:51:13 AM PST by KC_Conspirator
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To: SeekAndFind
This is a public service announcement:

A message for all libs escaping CA, stay North. Do not go the the South. It's humid and the people are mean. You wouldn't like it there.

16 posted on 12/14/2010 7:53:34 AM PST by central_va (I won't be reconstructed, and I do not give a damn.)
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To: SeekAndFind
California's political class needs first to confront reality before we can hope to avoid a dismal future.

That ain't going to happen. I was born here, and have lived 50 years here.

Liberals own this state. The decline will continue because the middle class has no power or representation whatsoever. Ruling class elitists, government, and Mexicans is the future here. And I say Mexicans as in Mexican/Central/South American nationals. So, we have another leftist, corrupt, "Latino" style country that the scum at the top can play with, being created right in front of our very eyes.

17 posted on 12/14/2010 7:54:27 AM PST by ecomcon
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To: SeekAndFind
CA...the detroit of states...or rather, the mexico of states. anyone that wants to see the future of CA can take a cruise down the Salinas Valley.
18 posted on 12/14/2010 7:54:57 AM PST by paul51 (11 September 2001 - Never forget)
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To: SeekAndFind

The talented techies aren’t stupid enough to stay in California.

However, the bums are plenty smart enough to stay.


19 posted on 12/14/2010 7:56:21 AM PST by Soothesayer ("The vile person shall be no more called liberal" Isaiah 32:5-8)
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To: JRios1968

where did u move to ?


20 posted on 12/14/2010 7:57:46 AM PST by ncalburt (Get Even on Election Day)
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