Your Non-Convention News (If Anyone Cares): Bearish on California
[guest post by JVW]
[UPDATE: Ah, hang on: I see now that Elias is claiming that there was a net increase of workers making $50,000 per year into California. That is an interesting assertion. Since he’s a newspaper columnist, his format doesn’t require him to provide links to supporting data, so I would be interested in hearing exactly where he found that number. He claims it is in the Beacon Economics report that he references, but I don’t have access to the full report so I would have to take his word for it, which I’m not really willing to do.
But my other point made in the post below stands: according to the Governor’s own numbers, the middle-class workers who come either either remain childless or when they have children they mostly leave the state for more affordable locations. This is not good for the long-term health of the California economy. – JVW]
I guess he’s never been discussed ’round these parts, but we have a columnist in the local Southern California paper The Daily Breeze (part of the Los Angeles News Group) named Tom Elias who has all of the requisite trendy lefty opinions as befits this region. One of his main recurring themes is that things in California are really quite splendid for businesses, proving that a highly-regulated progressive state can succeed and thrive. He was at it again today in a column that attempted to argue that despite what those nasty conservatives say, the wealthy are not leaving California in droves for other states:
For more than a generation, opportunistic California politicians have barraged voters with woeful tales about how the most productive, inventive, wealthy and enterprising Californians are leaving this state in droves to avoid high taxes and excessive government regulation.
These stories, used successfully by the likes of Pete Wilson and Arnold Schwarzenegger while running for governor, and unsuccessfully by failed candidates from Bill Simon to Meg Whitman and Neel Kashkari, tell of rich Californians seeking greener pastures in more laissez faire states like Texas and Idaho.
There’s only one problem with those stories: They don’t match the facts, even though they are often purveyed by folks with a financial stake in the fables, some of them business relocation experts.
As per his wont, Elias is employing an easily-wrecked strawman. In point of fact, California Republicans, especially wealthy ones like Schwarzenegger, Simon, Whitman, and Kashkari, have never claimed that the wealthy are leaving the state. The wealthy are the ones who can withstand the brutal tax and regulation policies demanded by the state’s left-wing hallelujah chorus, and wealthy progressives whose personal fortunes are already secure are largely the ones driving this demented agenda. What Schwarzenegger et al. have correctly pointed out is that California’s dreadful business environment and high cost of living inhibits job creation, especially jobs for the middle class. More on that in a moment.
Elias is such an awful thinker that he very quickly invokes Josef Goebbels to try to discredit any pushback to his puerile arguments:
It’s not just that California has outpaced the rest of America economically for most of the last 20 years. It’s not merely that innovative businesses and venture capital investments here are the largest and most successful in the world.
It’s not only that coastal California real estate, property in the state’s most populous areas, brings more cash than comparable real estate anywhere else in America except Manhattan, but also that there are plenty of buyers around with the cash to pay seemingly outrageous prices.
It’s also that truth matters little anymore, with one of the principles peddled by master Nazi propagandist Josef Goebbels in the 1930s and ’40s proving at least somewhat correct: The more often you repeat and broadcast an untruth, the more people will come to believe it.
Yep, it’s true: the layers and layers of editors that the LA News Group no doubt employs somehow failed to redline Mr. Elias’s obnoxious Nazi reference, thereby setting a new record for fulfilling Godwin’s Law.
And here’s where Elias either tries to get cute, or exposes himself as a numerical illiterate. In arguing that California still attracts plenty of well-educated people seeking jobs, he cites these figures (bolded emphasis is mine):
That especially holds when some numbers appear to back up the untruth. In terms of people leaving California, there is such a number: California had a net population outflow to other states of 625,000 residents between 2007 and 2014. Newborn children and immigrants more than made up for that loss, so don’t expect the state to lose congressional or Electoral College clout after the next Census in 2020.
[. . . ]
[O]f those who left during the latest years for which statistics exist, the vast majority earned less than $30,000 per year. A net total of 469,000 of those leaving possessed no college degree. Given the prevailing levels of rents and home prices in California, it’s easy to see their financial motive in leaving for far lower-priced states like Texas, Nevada, Oregon and Arizona.
But as lower-income residents left there was a net increase of 52,700 residents from other states making more than $50,000 per year who do have at least a bachelor’s degree. The figures come from a Beacon Economics study released this spring.
Let’s put aside the stupid notion that as long as California’s population stays stable we won’t lose any Congressional seats. (Mr. Elias, as the population of the country grows, if the number of residents in California remains flat our Congressional districts will be reassigned to other states which are rapidly growing. It’s unconscionable that you don’t know this.) Let me instead introduce some high-level mathematics to this discussion. Forgive me for getting lost in the weeds, and I completely understand if you can’t follow these complex calculations, but here is what we are looking at, per Elias:
Yep, he seriously thinks it’s no big deal that nearly three times (message me if you want to see my advanced calculations there) as many college-educated people left the state than relocated here over that period. [Note, see my updated correction at the top of the post.]
The rest of the column is blather about how there are really good middle-class high-tech jobs in California, with only a token acknowledgement that what is considered middle-class pay no longer supports a family trying to reside in San Francisco, San Jose, Los Angeles, San Diego, or most of the areas where jobs are being created. Entrepreneurs backed by millions in venture capital are providing some jobs in programming and marketing to those working in start-ups, but hardly paying enough to allow these workers to live comfortably in places like Silicon Valley or the Venice/Marina del Rey tech hub. I fired off a letter to the editor pointing out that Elias also ignores the demographic data from Governor Brown’s 2015-16 state budget which clearly shows that California’s population is skewing heavily towards retired senior citizens and that the number of school-aged kids (ages 4 to 17) is expected to grow at an anemic .3% (yes, that’s three-tenths of one percent) between 2014-2019 while the number of college-aged Californians (ages 18 to 24) is expected to decline by 4.5%. California’s major cities are becoming overwhelming elderly, single, and childless, and that is going to cause a loss of middle-class jobs in education, hospitality, recreation, and other key parts of the economy, just as the cities and state find themselves on the hook for greater and greater healthcare and pension costs borne by the already-overextended taxpayer. This is not going to be pretty, and shame on hacks like Elias for trying to convince us otherwise.
– JVW
