Saturday, March 25, 2017

The Real Calexit: Californians leaving for lower-cost locales

Activists agitating for California to separate from the United States better start considering the border wall they’ll need to build if successful — to keep their residents in.

An analysis of Census Bureau data by the Sacramento Bee shows that between 2005 and 2015 800,000 working-class Californians on net left for other states. Twenty percent of this net working-class outflow — 156,000 — went to one state in particular: Texas. Meanwhile, new data from the Census Bureau show that six of the 10 fastest-growing counties in the United States are in Texas or Utah; none are in California.

What’s driving this exodus? For decades California has championed policies that supposedly make it a working-class Mecca. For instance, its forthcoming $15 minimum wage — or $30,000 a year full-time — will put even starting employees roughly at the U.S. median personal income level. Texas, on the other hand, does not have the supposedly helpful social programs of California, and its minimum wage is less than half California’s coming standard.

And yet employees are happily leaving for Texas — not to mention Utah and Nevada — because they’d rather have the economic opportunity and affordable cost of living they can’t find in California. The reality is that California’s dramatic minimum wage increase to $15 as well as other workplace regulations are forcing some small businesses and their employees to states like Texas. In these states, their business model is encouraged and their employment is welcomed.

For example, Competitive Edge, a communications firm in San Diego, moved its entire call center operations consisting of 75 jobs to El Paso Texas last year as a result of California’s minimum wage costs. “My employees who will move over there will get a 50 percent pay raise in a sense, because cost of living is lower there,” said Chief Executive John Nienstedt.