People moving out of California have lower income than those who stay.

[Sbane]

A little old, but I doubt this pattern has changed much. Actually it might have intensified in the last few years as construction jobs were eliminated.

This is not what one would expect when you hear that it's high tax rates that are pushing people out. Rather it seems to be the cost of living that is the "problem". It is interesting that those moving into California have lost the most income in these years. Probably has to do with the fact that high skill immigration from Asia slowed during the 2001 recession, as well as techies moving in from other states.

http://californiabudgetbites.org/2009/02/05/another-urban-legend/

[opebo]

Its like Okies in re-verse.

[Sbane]

Its like Okies in re-verse.

I bet a lot of those leaving are descendants of those people.

[Grumpier Than Uncle Joe]

Its like Okies in re-verse.

Only the privileged can stay in CA.

[phk]

The exodus on higher and middle income people would be larger if people weren't tied down by their homes.

[Sbane]

Its like Okies in re-verse.

Only the privileged can stay in CA.

Unless you get a job in an inland area, that is basically the case.

I just don't like it when people bitch and moan and blame Mexicans for ruining the state when it's financial considerations that are making them move. Maybe I have been reading too much of the city data forums. Oh well.

[Grumpier Than Uncle Joe]

Its like Okies in re-verse.

Only the privileged can stay in CA.

Unless you get a job in an inland area, that is basically the case.

I just don't like it when people bitch and moan and blame Mexicans for ruining the state when it's financial considerations that are making them move. Maybe I have been reading too much of the city data forums. Oh well.

A certain member here blames them for everything......cough, cough, wink, wink.

[Sbane]

The exodus on higher and middle income people would be larger if people weren't tied down by their homes.

Middle income, maybe, but not higher income people.

Obviously it also depends on what you want in life. If you want a huge house at a low cost, but don't care if you are surrounded by flat land a 1,000 miles each way, then California is certainly not the place for you. But I do think the majority of people would prefer to live in California if they could. Other considerations like costs (taxes would be included here, but other costs are much more pertinent imho) and schools are what push people out. Don't think this affects people making 100k+ living in areas with good schools.

[Torie]

Outside of say, the Fresno suburbs or something, being lower middle class with a family must be a living hell in California. I don't know how folks manage it really.

[opebo]

Outside of say, the Fresno suburbs or something, being lower middle class with a family must be a living hell in California. I don't know how folks manage it really.

You know it is a living hell for those people wherever they live, Torie.

[phk]

Despite the left-liberal nature of California, and apart from suburban areas in the San Joaquin Valley and Inland Empire, it's the second worst state to be poor in.

[memphis]

Yeah, it's hard to see how people could last a month in CA without a six figure income. Mixture of filled to the brim metros (particularly LA and the Bay) and incredibly remote areas with no jobs. Makes you wonder why it is that more people aren't fleeing for cheaper pastures. You could live like a king in my neck of the woods for what it takes to just get by in CA.

[Free Palestine]

A two-bedroom house here costs about the same as a fcking mansion anywhere else.  My parents and I were lucky to find a house with three bedrooms for just a thousand dollars a month.

[○∙◄☻¥tπ[╪AV┼cVê└]

Yeah, it's hard to see how people could last a month in CA without a six figure income. Mixture of filled to the brim metros (particularly LA and the Bay) and incredibly remote areas with no jobs. Makes you wonder why it is that more people aren't fleeing for cheaper pastures. You could live like a king in my neck of the woods for what it takes to just get by in CA.

One doesn't need a 6-digit income to survive in California, but in many areas you couldn't afford a house with only a high 5-digit income. Of course you still have to subsidize the upper middle class elsewhere.

[opebo]

A two-bedroom house here costs about the same as a fcking mansion anywhere else.  My parents and I were lucky to find a house with three bedrooms for just a thousand dollars a month.

Where's here?  A thousand a month for a three bedroom house isn't so out of line - in St. Louis a very nice three bedroom would be that, unless I'm very out of date, and only in rural or slum areas could it be much lower.

Of course it would be cheaper per month to buy such a house now than rent it, I guess, if you could somehow get it financed.

[angus]

My parents and I were lucky to find a house with three bedrooms for just a thousand dollars a month.

You were indeed lucky.  Here in Cedar Falls, a nice three-bedroom apartment at a complex with amenities would cost you more than a thousand a month.  (We were paying 1150 per month the first year we lived here for such a place, then we bought a house.)  And when I was living in Boston we paid well over a thousand a month for a three-bedroom apartment which was decidedly not well-appointed.  In California, I paid 1375 per month for a largish one-bedroom flat.  In Manhattan, I paid 2950 per month for a tiny one-bedroom flat with a bathroom so small that I had to close the door before I sat on the toilet, and even then my knees hit the door.  Those were all unfurnished places.  Rents are high everywhere.

A three-bedroom place for one grand in California is a pretty good deal, even in the sticks.

[Grumpier Than Uncle Joe]

Rents are high everywhere.

Tell us about it!

[angus]

Ha!  That guy is a hard act to follow in debate.

He should also post in the Facial Hair thread.


Really, though, the fact that the subset of emigrants from California having a smaller median income that the residents of that state is not surprising.  At least not surprising to me.  Those who earn enough money to stay and enjoy the living stay.  Those who don't leave unless they're tied by family or an underwater mortgage.  Every person I know who once lived in California, or who once considered, but then turned down, a job offer there talks about how nice the climate is but how high the cost of living is.  If those are the two things people in the rest of the country think when they think of California, and the main advantages and disadvantages people list when considering moving there from outside, then it should come as no surprise that those who already live there are reluctant to leave, but who will leave if they don't have enough money to stay.  Actually, the net effect should be a stabilizing of real estate.  Higher average income, once the low end renters leave, will put upward pressure on rents, but this will be counteracted by a downward pressure because vacancies will open up.  Which effect will be greater?  Probably the downward pressure because of wage stagnation, and the net effect may be an overall decrease reaching a new equilibrium price for rents being slightly, but not very much, lower than they are now. 

[memphis]

My parents and I were lucky to find a house with three bedrooms for just a thousand dollars a month.

You were indeed lucky.  Here in Cedar Falls, a nice three-bedroom apartment at a complex with amenities would cost you more than a thousand a month.  (We were paying 1150 per month the first year we lived here for such a place, then we bought a house.)  And when I was living in Boston we paid well over a thousand a month for a three-bedroom apartment which was decidedly not well-appointed.  In California, I paid 1375 per month for a largish one-bedroom flat.  In Manhattan, I paid 2950 per month for a tiny one-bedroom flat with a bathroom so small that I had to close the door before I sat on the toilet, and even then my knees hit the door.  Those were all unfurnished places.  Rents are high everywhere.

A three-bedroom place for one grand in California is a pretty good deal, even in the sticks.

Nothing like that here.  My dad has a one bedroom in a fancy part of town for $609/month. You can easily get a bigger/cheaper place in a less desirable area. Not hard to get a house for less than 100k either.

[Franzl]

Not hard to get a house for less than 100k either.

That's suggests to me that they aren't very good houses.

[memphis]

Not hard to get a house for less than 100k either.

That's suggests to me that they aren't very good houses.

Right down the street from me and has been for sale for $84k for several months. In the "good" school district and half a block from the local park. It's a smaller house but it's in good condition and in a nice neighborhood.

[Beet]

Not hard to get a house for less than 100k either.

That's suggests to me that they aren't very good houses.

They're good houses; they're just in a "bad" location. But it also says that a place like where memphis is is much more ripe for growth. I mean, if you're a small business owner, where would you rather be, a place where it costs $450k to get a roof over your head, or a place where it costs $100k? In the memphis-style place, your employees will be able to get almost the same utility if you pay them $350k less. That's why you see the redneck parts of the country growing faster.

[angus]

Nothing like that here.  My dad has a one bedroom in a fancy part of town for $609/month. You can easily get a bigger/cheaper place in a less desirable area. Not hard to get a house for less than 100k either.

Perhaps "everywhere" is overstated.  We also paid the equivalent of about 400 US dollars for a month's rent in a furnished flat on the 32nd floor of a modern building in a very nice part of the city of Nanjing.  Nanjing would be, if it were in the United States, the second most populous city, being a bit more populous than LA and a bit less populous than New York.  In China, it doesn't even make it into the list of the top 20 most populous cities.  But I digress.  Sure, in less economically-developed areas the rent will be cheaper.  Nanjing and Memphis are less rich than New York or California, so you'd expect cheaper rent in those places, for sure (although I'd venture a guess that Nanjing, and in fact all of Jiangsu Province, has a higher per-capita GDP than Memphis and all of Tennessee.)   But my point is that even in the sticks, in a city of 40 thousand people in Iowa, you'll have to pay more than a thousand dollars for a decent 3-bed/2-bath apartment, therefore one is indeed "lucky" to get such a place in California for that price.

As for houses, opebo made the point earlier about how cheap they are.  They may be.  Houses are different than apartment, and apparently follow different trends.  You can look at Price-to-rent ratios for various cities and all that, but statistics aside, I have also noticed that houses are not so expensive as apartments.  For example, we pay just over two thousand dollars a month for our house, and it is much more than two times the size of our apartment, and it has a connected 3-car garage, and a full basement, and a large yard, and is much newer, having been built about ten years ago.  And since we can probably sell the house for as much as we paid for it--no, there's no "zestimate."  I tried that and got an "insufficient data for a zestimate" message for every address I tried in Cedar Falls--but generally the housing "bubble" seemed not to affect Iowa, but then neither did the housing "bust."  (Median house prices here have risen at a slow but predictable rate of about 2% for each of the past ten years, so Iowa isn't exactly a speculator's market.)  So in our circumstance, mortgaging a house was actually less expensive than renting.  Presumably you find the same thing to be true where you live. 

[memphis]

Per capita GDP in Nanjing is about $9000/year. I feel pretty confident it's higher than that here.

[angus]

Per capita GDP in Nanjing is about $9000/year. I feel pretty confident it's higher than that here.

I wonder.  Not to nitpick but you're dividing a city product, in yuan, by the number of inhabitants and taking that ratio and converting it to US Dollars using an exchange rate set by the central bank of China.  That exchange rate was pegged to the dollar for a long time, then was allowed to float, and then pegged again at the start of the 2008 credit crunch.  During the float period, the value of the yuan relative to the US Dollar rose dramatically, and most economists say it will do so again once we get past the point where the Chinese feel constant pressure to lend us money to buy more of their goods, in a vicious cycle, so I'm not so sure that your analysis is the best benchmark  Sure, you can find a statistic somewhere that'll let you refute my claim.  Clearly you did, but that's a skewed statistic, and we all know it.  I'm sure I've driven all over Memphis.  Stayed there a few times.  Had a great time each time I visited, by the way.  Memphis is a fun place, full of history and entertainment.  I tried to wait out the ghost of Elvis outside the walls of Graceland after visiting the mansion and leaving flowers for The King.  I've danced on Beal Street with the exotic, strong, lovely, dark women that populate your fine city.  I've eaten the smoked barbeque at Leonard's, walked the beautiful campus of Rhodes College, and had a moment of Silence for Martin Luther King, Junior near where he was slain.  Been all over Nanjing too.  Climbed the Ming Dynasty walls and rang the bells at the Gu Lou and gave the rooster a quarter and watched the women play ma jiong and the men play Xiàngqí at Black Dragon Park.  Rode the bumper cars and the ferris wheel at Purple Mountain.  Burned incense and paper money at a Buddhist monastery and stepped in a pool of child's piss at a confucian temple.  I climbed a thousand steps of Linggu and raised my arms to Heaven, in order to live a hundred years.  I saw a frail, old Japanese man break down and cry at the museum memorial to the Rape of Nanjing, his dutiful and obediant daughter wiping his tears as she cried with him.  I've toured the beautiful and prestigious Nanjing University and I've gazed upon a presence spanning 25 centuries as I feasted on roasted duck on an iron bench on a cobbled street.  I've even sampled the highly efficient and modern health services there, when my son got a little cough.  And, thinking about those two cities, Memphis and Nanjing, I get the impression of one being much wealthier than the other.  I'd say that Nanjing gives off the impression of a dynamic and thriving business climate.  There are new high-rise buildings on every block, usually right next to structures hundreds of years old.  There is little evidence of poverty in Nanjing, believe it or not.  Can you say that about Memphis?  Of course, Nanjing hasn't reclaimed its former glory.  There was a National Geographic article in the February 1938 issue about Nanjing, back when it was the capital of Nationalist China and a thriving commercial hub.  Women were wearing the latest fashions imported from Milan and Paris.  Japan had just started harassing, raping the women and killing their husbands.  French, American, and British merchants were pleading with their own governments to do something about the Japanese invasion, but by then it was too late.  Nanjing suffered.  First it was the Japanese.  Later the Communists.  It hasn't fully recovered, but despite what the deliberately skewed statistics that you trotted out suggest, I'd still wager that the real per-capita wealth of Nanjing is probably greater than that of Memphis.  That's just my impression.  If you're patient enough to wait out the Chinese government's intransigence regarding its central bank, then we can find the relevant statistics to demonstrate that fact.  

But that's all digression and irrelevant to the thread isn't it.  I guess I'm agreeing with you that the rent in Memphis is lower so I shouldn't use the word "everywhere."  But in California it's high.  And we should also treat housing separately from rent, as you suggest, as those prices don't always track directly with rent.  I used the price-to-rent ratio and other such statistics to help make the decision to buy, but like all statistics, those don't really do justice to the individual situation.  You just have to go in and feel the market out before deciding whether to buy a house or rent a house.  I'm also not sure how much Memphis got into the housing bubble.  Iowa largely avoided that bubble, and as a result folks here are not underwater in mortages, and houses can generally be sold for what you paid for them, or more.  In California, some folks may feel trapped by their mortgages.  But among those who aren't, it isn't surprising that the low end is leaving in greater numbers than the affluent.