WSJ: The Reverse-Joads of California
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 TRLA +4.75% . 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.
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