CA middle class fleeing to lower-cost states

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New data has brought a new urgency to the souring fortunes of California’s middle class.

“Not only are Californians leaving the state in large numbers, but the people heading for the exits are disproportionately middle class working families — the demographic backbone of American society,” the American Interest recently noted.

Looking at labor force categories provides more evidence that California is losing working young professional families,” argued Hoover Institution research fellow Carson Bruno; “while there is a narrative that the rich are fleeing California, the real flight is among the middle-class.”

“Knowing that net out-migrants are more likely to be middle-class working young professional families provides some hints as to why people are leaving California for greener pastures. For one, California is an extraordinarily high cost-of-living state. Whether it is the state’s housing affordability crisis — California’s median home value per square foot is, on average, 2.1 times higher than Arizona, Texas, Nevada, Oregon and Washington’s — California’s very expensive energy costs — the state’s residential electric price is about 1.5 times higher than the competing states — or the Golden State’s oppressive tax burden — California ranks 6th, nationally, in state-local tax burdens — those living in California are hit with a variety of higher bills, which cuts into their bottom line.”

Real estate indicators

“In 2006, 38 percent of middle-class households in California used more than 30 percent of their income to cover rent. Today, that figure is over 53 percent,” according to Christopher Thornberg, director of the UC Riverside School of Business Administration Center for Economics Forecasting and Development. “The national figure, as a point of comparison, is 31 percent. It is even worse for those who have borrowed to buy a home — over two-thirds of middle-class households with a mortgage are cost-burdened in California — compared to 40 percent in the nation overall.”

Recent studies illustrated a continuing plunge in homeowning among traditional buyers in-state. “California’s middle class is being hammered,” wrote Joel Kotkin at the Orange County Register. “The state now ranks third from the bottom, ahead of only New York and the District of Columbia, for the lowest homeownership rate, some 54 percent, a number that since 2009 has declined 5 percent more than the national average.”

Low on houses

Some analysts looking to explain the trend have pointed to a so-called housing shortage statewide. “With supply falling far below demand, California needs to build at least 1 million more homes for low- and middle-income Californians in the next 10 years,” CAFWD suggested, adding that, although Gov. Jerry Brown “did not mention housing in the State of the State address,” he has “not explicitly ruled out addressing the issue in the next three years.”

Giving ammunition to the housing shortage thesis, meanwhile, was “a new report from the California Legislative Analyst’s Office that found that poorer neighborhoods that have added more market-rate housing in the Bay Area since 2000 have been less likely to experience displacement,” the Washington Post noted. But experts have differed significantly on how to read the tea leaves of the data, and analysts disagree on whether increasing density — or what kind of density — is the right answer.

A cloudy picture

The Golden State has been haunted in recent times by sharply mixed economic indicators. “While California has added 2.1 million jobs since 2010, employment in six industries is still below 2007 levels, before the Great Recession, according to the center’s analysis. Those sectors — including construction, finance and manufacturing — generally pay more than the service-type jobs that we’re adding in droves,” the Sacramento Bee noted late last year.

Economic growth concentrated in Silicon Valley has also not done much to relieve the income or jobs picture for middle-classers. “In a recent survey of states where ‘the middle class is dying,’ based on earning trajectories for middle-income cohorts, Business Insider ranked California first, with shrinking middle-class earnings and the third-highest proportion of wealth concentrated in the top 20 percent of residents,” Kotkin observed.

42 comments

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  1. Ronald
    Ronald 24 February, 2016, 06:20

    Seem that our Sacramento legislatures are trying to clone the Disney business model.

    Disney “controls” admissions, by constantly raising the admission fees so those that do attend can enjoy the park. If Disney did not raise the admission fees, the park would be overcrowded and no one would enjoy the park.

    The California over regulations and exorbitant fees on businesses is resulting in California similarly controlling migrations from other States into California to control population growth, so that those that live here can enjoy the attributes of California without excessive overcrowding.

    California seems to be cloning the Disney business model, as the cost to enjoy our state is high and getting higher, but the unintended consequences of a business friendly state would mean even higher population growth and more congestion, traffic, etc., and result in no one enjoying that mess.

    Without affordable housing, only those that can afford to live in California, will be living here.

    Maybe Sacramento has some Disney blood !!!!

    Reply this comment
    • Richard Rider
      Richard Rider 25 February, 2016, 09:13

      Not quite correct. We’ll keep most of our poor here with great benefits and high occupancy per home. Plus government-mandated “affordable housing” — which is actually quite expensive.

      As the article explains, it’s the MIDDLE CLASS that is most likely to leave — these folks are so déclassé.

      Makes one wonder why we need all these colleges producing graduates who have strong incentives to then leave the state for better economic opportunities (assuming they can’t land a waiter job in CA — a position which pays surprisingly well).

      Reply this comment
    • CindyR
      CindyR 27 February, 2016, 20:09

      California is not controlling the fact that many who cannot afford real California do in fact live here. They live on state-subsidized protections, i.e., section 8, low cost utilities, freebies in state schools.
      The wealthy pay for their own educations and homes. The poor have those items subsidized. The left out are the middle class and I applaud them for leaving. I will as soon as my mom dies, and I am a 4th generation Californian.

      Reply this comment
      • jason walther
        jason walther 14 November, 2017, 22:47

        Me too!

        Reply this comment
      • MJ
        MJ 28 March, 2018, 21:07

        Well said Cindy R. Also, I would like to point out that there is a vast difference between subsidized housing and affordable housing. There is hardly any affordable housing in most of CA with rare exception. Then in some of those cases, the locations are far from all services, so one has to drive long distances for everything they need to get to work or for whatever they need. Add those additional costs to the rent or the mortgage & upkeep plus the high taxes and what that equals is chaos. None of this is really very affordable, prudent or what one would consider equitable, sensible or quality of life for someone who works or is even retired. Section 8 housing subsidized by the state or the federal gov’t keeps market rates artificially high. Market rents are not affordable for the hard working person, unless they are willing to pay much of what they earn or go into debt in order to even afford a small one bedroom apt. In my area,(N. CA) small old cottages are being rented for close to $2,000 a month if you can even find one to rent. This encourages non productivity and worse. It is generally easier for someone who does not work to qualify for these subsidized apts/homes. I know of numerous situations where the person pays less than $200 a month for a beautiful apt that is close to new with their own private back and front porches who receive gov’t benefits in some cases claiming to be disabled and are not. There are also people who are forced to live in squalor in over crowded conditions. Then there are people living in their cars, in their RV’s, couch surfing or are homeless living in the streets near where I live. Then there is the noise and safety issues from packing too many homes in small spaces and gridlock traffic on the roads that are mostly filled with potholes. The high taxes one wonders, where is all the money really going? There are also the dangers of fires and disasters that nobody wants to address until it happens to you or all around you. When money rules and greed rears up its ugly head, all kinds of disasters occur and they do, in all forms. I am out of here as soon as I get something else set up. By the way, the very wealthy are having a difficult time finding laborers to fix their homes or tend to their lives, so it is really a no win for all. Welcome to California. Once a Paradise for nature lovers and kind people. Now a Disneyland for wino’s, drug dealers, carper baggers and crooked politicians. When all of the old timers are forced to leave their homes and communities, the corruptness is epidemic.

        Reply this comment
    • sinnie
      sinnie 28 February, 2016, 11:42

      Disney survives through the middle classers and if the middle class people are moving out then it would affect Disney too.

      The riches might have money but they have different ways to enjoy and entertain themselves with their yacht and plane and not walking around big park to get sweat and get lost.

      California government and politicians have to watch what they are doing with their burden rules and regulations and high taxes. They might loose most of the taxpayers and get replaced with the illegal aliens.

      I know some mid-managers who are leaving California to a less expensive living cost. Is the shortage of homes in CA because of too many illegal’s?

      Reply this comment
    • James
      James 29 May, 2018, 13:08

      Mickey Mouse appears to be running the show.

      Reply this comment
  2. Spurwing Plover
    Spurwing Plover 24 February, 2016, 07:42

    The Beverly Hillbillies have left california and the disiedales and Miss Hathaway are going with them

    Reply this comment
    • ricky65
      ricky65 25 February, 2016, 08:27

      Yeah, it’s the Grapes of Wrath in reverse. In the thirties, the dust bowl Okies left drought and famine for the golden state looking for its legendary promise of jobs, homes, and freedom.
      Today the middle class refugees are fleeing the liberal green tyrants who intend to destroy them through their bought and paid for D-Rat hack politicians. The intent is to drive out the untermenschen by destroying their jobs, lives and the economy through crushing taxes and regulations. The green oligarchs and their lackey politicians have driven up housing costs and increased the cost of utilities, gasoline, groceries, car ownership and the essentials necessary to have a prosperous middle class.
      It’s all part of their plan to depopulate and deconstruct the state so that Gaia can heal and be available only to the elite as their recreational needs demand.
      I can see it now. The reverse Okies headed east on I-15 chugging over Cajon pass with their unsafe, dented U haul trailers rented from Uly. Squeaky wheel bearings, no taillights, and pee soaked mattresses tied on top headed for the new promised land and freedom again.

      Reply this comment
      • Cali Refugee
        Cali Refugee 28 June, 2017, 09:30

        So vividly explained thank you. At least one person understands what it’s like to be part of the conservative underground “resistance” in this mental asylum of a state. The Disney example in this thread is appropriate since both organizations seem to be based in fantasy rather than reality.

        My local government is living the same dream-world as they are adding housing for more than 5000 new residents within a mile from my house. There are no new roads or infrastructure planned to support these new developments in the downtown area of Fullerton.

        “So they loaded up the truck and they moved to Beverly…TEXAS that is oil pools, Lone Stars…”

        Reply this comment
  3. Ulysses Uhaul
    Ulysses Uhaul 24 February, 2016, 08:31

    Pack and Ship with Uly Uhaul…..

    We love you doomers…….

    This month we throw in a soothing/relaxing massage in Sunset Beach or Adelanto and a travel map printed in Mumbai with lots of pictures of truck stops and locations of Cracker Barrel and Waffle Houses.

    Just Lovin It!

    Reply this comment
  4. Spurwing Plover
    Spurwing Plover 24 February, 2016, 16:51

    The song used to be CALIFORNIA HERE I COME now its CALIFORNIA HERE I LEAVE

    Reply this comment
  5. Richard Rider
    Richard Rider 25 February, 2016, 09:05

    Consider California’s net domestic migration (migration between states). From 1992 through 2014, California lost a NET 3.7 million people to other states. Net departures slowed in 2008 only because people couldn’t sell their homes.

    But more people still leave each year — in 2014 we lost 79,340. Again, note that these are NET losses. Sadly, our policies have split up many California families.
    https://twitter.com/SenTedCruz/status/464827967747526656/photo/1
    and
    http://riderrants.blogspot.com/2015/04/were-california-real-estate-prices.html

    It’s likely that it’s not the welfare kings and queens departing. They are primarily the young, the educated, the productive, the entrepreneurial, the ambitious, the wealthy (such as Tiger Woods) – and retirees seeking to make their nest-eggs provide more bang for the buck.

    Reply this comment
    • Larry
      Larry 26 February, 2016, 11:35

      The pop has gone up 15%+ since 2000 and 5%+ since 2010. Six million more immigrants?

      “Starting in the year 2010, for the first time since the California Gold Rush, California-born residents make up the majority of the state’s population. Along with the rest of the U.S., California’s immigration pattern has also shifted over the course of the late 2000s-early 2010s. Immigration from Latin American countries has dropped significantly with most immigrants now coming from Asia In total for 2011, there were 277,304 immigrants. 57% came from Asian countries vs. 22% from Latin American countries. Net immigration from Mexico, previously the most common country of origin for new immigrants has dropped to zero/less than zero, since more Mexican nationals are departing for their home country than immigrating. As a result it is estimated that Hispanics citizens will constitute 49% of the population by 2060, instead of the previously projected 2050, due primarily to domestic births.” – Wikipedia

      Reply this comment
    • CardiClan
      CardiClan 27 February, 2016, 07:58

      Yes, as one of the retirees who fled California when Brown was elected for his third term, that is exactly why we left California. The handwriting was on the wall and I couldn’t afford to stay there any longer. We moved to Idaho and our pension and social security are enough to live here quite comfortably. My energy bills are a third of what they were in CA in the winter and even less in the summer. I have 5 acres, a house, a barn, and a small covered arena that cost less than the 50 year old tract house l left in CA. Property taxes on the ID property are a $1000 less than the tract home in CA and property insurance is $800 less than in CA. Car licenses are for two years and two cars can be licensed for less than one car for one year in CA. Drivers licenses are also much, much lower than CA. Car insurance is also much less.

      I loved California. But I hate what it has become. Not only the cost but I was afraid to go to the grocery store two blocks away after dark. They had an armed guard on the door and locked all the doors but one so the guard could monitor who was coming and going. That’s no way to live. I was in what was a quiet neighborhood once upon a time.

      Reply this comment
      • MJ
        MJ 29 February, 2016, 21:38

        I agree with everything you are saying. I have been looking for a place to call home now for quite some time. I am tired of my old house and what is going on here in CA. Idaho is next on my list to check. Can you give me any pointers on where it does not freeze or snow much in the winter? OK to e-mail me privately if possible. Thank you. MJ

        Reply this comment
        • Happily retired
          Happily retired 28 March, 2018, 10:16

          Yep, our family left California at the end of 2011 and it was by far the best move we ever made. I am a native born Californian. I never thought I would leave nor did I want to, but was saw what Calif was becoming long before what it is now. So glad we left.

          Reply this comment
          • MJ
            MJ 28 March, 2018, 18:19

            Thank you for your response. Can you or anyone else please tell me if you would, where did you end moving to, how do you like it, what are the quality of the services, schools, attitudes of the people, how are the roads, the traffic and how are the winters? I prefer to be in an area where the weather is not extreme. Cold weather in the winter does not bother me as long as I am not dealing with snow, ice and unsafe weather patterns. In other words, where it is usually above 32. Also do not like very hot summers and am seeking an area that has logical individuals making important decisions that are not based on increasing tourism like where I live now. I am seeking a functional safe community where people actually care about one another and money does not destruct the land and throw their long time residents under the bus like where I live. All ideas and comments from informed individuals will be greatly appreciated. I am looking at certain parts of Oregon and Idaho at the moment. If those places do not work, I am out of ideas. Been to many other places around the US that do not appeal to me. Seeking a small city with semi rural areas close by with clean air and water.

      • ConservativeRefugee
        ConservativeRefugee 30 August, 2016, 11:52

        We are conservatives and feel like fish out of water in CA. CardiClan, may I ask where in Idaho you moved to? I am terminally ill and want to make sure that my family is well situated in an area with normal, nice and friendly people (more like us!) before I go. Can’t breathe on the east coast, too humid! The weather in CA is great for my health, but in the future I will be spending more time indoors so that is now becoming a mute point. Boise looks like a great area, I’ve heard that the people are friendly and down to earth, but I don’t know much about Idaho in general. How is the employment and economic situation there, any decent hospitals in the area? Any information would be appreciated. Thanks!

        Reply this comment
      • See ya Cali
        See ya Cali 11 February, 2017, 08:55

        I agree with you 100%. We moved to AZ in mid 2015. I predicted 2 years prior to our move that the middle class would be disappearing from CA. CA continues to be out of control. Now they are proposing a $65 a year auto user fee in addition to the existing high registration fees, smog fees, plus an additional 15 cent a gallon gas tax that is already the highest in the US. They instituted additional fire taxes for rural areas a few years ago. They still can’t balance the budget or maintain the roads. Wait until the Calpers nightmare comes home to roost. This is just the beginning. The Gov. has already commented that you can only tax the rich so much, so get ready to be destroyed middle class. Wait until the minimum wage hits $15 per hour. Big price increases are coming!

        Like Idaho, AZ prop taxes, insurance, car reg., are less than 50% of CA. Gas prices 60 to 80 cents a gallon less at least. Home prices much less. Just avoid places like Phoenix and Tucson. You also have more freedoms and rights for off roading, shooting, CCWs, etc. The only negative is medical and you can thank liberals for that.

        I know of several retirees who had good high paying jobs that left CA immediately upon retiring. I am still working but will retire soon. I am very happy to be out of that mess!

        Reply this comment
      • Happily retired
        Happily retired 28 March, 2018, 10:15

        Yep, our family left California at the end of 2011 and it was by far the best move we ever made. I am a native born Californian. I never thought I would leave nor did I want to, but was saw what Calif was becoming long before what it is now. So glad we left.

        Reply this comment
    • Desmonic
      Desmonic 14 June, 2017, 12:25

      So … Splain to me why the state need more housing if the population keeps shrinking and the “illegals” all live in one house in San Jose?

      Reply this comment
  6. DC1
    DC1 25 February, 2016, 11:19

    I have heard this time and time again, and yet CA seems to be increasing in numbers all the time. I am no fan of the state’s economic policies of spending and taxing until they run out of other people’s money, but the actual numbers of those moving tend to be pretty small…and young people are still locating here in droves. Yes we have the worst combination of regulation, long term fiscal problems and high taxes in the country….but the economy, at least for some, continues to do well. Maybe at some point you will see a big economic impact, but so far it just doesn’t show up other than in the newspapers.

    Reply this comment
    • JimmyDeeOC
      JimmyDeeOC 25 February, 2016, 14:12

      Did you not just read RR’s comment posted two hours earlier than yours? Or do you not comprehend the concept of “net”?

      3.7 million is NOT insignificant. That’s 10% of the population. …… In roughly 20 years.

      Reply this comment
  7. J6P
    J6P 25 February, 2016, 13:48

    Been to Cal, north and south, many times for work. No thanks, you locals are welcome to it. Nice weather mostly, but overcrowded, dangerous, damned expensive and chock-full of insane lefties. Your state government is a pathetic joke and your governor is a brain-fried 60’s hippie. Most of the rest of us in the West would like to see it made illegal to have your denizens leave there as they just screw up other still-decent places like they did Cal. You made your mess; stew in it. Meanwhile, don’t bother replying to this comment. I won’t be back.

    Reply this comment
    • JimmyDeeOC
      JimmyDeeOC 25 February, 2016, 14:15

      Taking your ball and going home? LOL

      Actually most California-based posters here ARE sympathetic to the points you made.

      Reply this comment
  8. assmonkey
    assmonkey 25 February, 2016, 17:21

    As soon as you leave CA you get a 15% raise by not paying the state income tax and the very high sales tax.

    Reply this comment
  9. Desmond
    Desmond 25 February, 2016, 18:02

    Yea, yea, but where else can you live where the lieutenant governor f([email protected]$ sheep and goats. That is worth something.

    Reply this comment
  10. davidS_2016
    davidS_2016 25 February, 2016, 19:51

    “You don’t want to turn that (new) state into the state you’re fleeing from.”
    Individual political leaning has zero to do with any given state. The person fleeing might simply not agree with the general ideas of the majority in that state.

    Reply this comment
  11. newshound4life
    newshound4life 25 February, 2016, 20:45

    We successfully escaped CA in 2009. I’ve been back only once and continue to feel sad over our friends left behind. Our current home State in the Mid-West has 2.8% unemployment rate and my HS daughter has a P/T job at Best Buy that pays $12.50/hr. Here in NE 5 acres, 40 trees, a 2100 sqf home 5 mins from Walmart runs about $150K. We should have left two decades ago. But the political class could care less about the citizenry as long s they can control the show.

    Reply this comment
  12. David
    David 8 April, 2016, 21:32

    No news here. My wife and I left in 2006 and moved to Texas. Best move we ever made.

    Reply this comment
  13. epeon
    epeon 15 January, 2017, 01:16

    My wife and I are both engineers. We left California in 2006 and moved to Texas. We figured that over the last years we have saved about $200,000 in state income taxes by leaving.

    Reply this comment
  14. Me123
    Me123 5 March, 2017, 09:53

    It’s actually the poor, and some middle class, that are mostly fleeing due to housing costs.

    Reply this comment

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