DONNELLY: Does California Export Poverty to Texas?

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If all you read was the Sacramento Bee headline,“California exports its poor to Texas, other states, while wealthier people move in,” you might think it was true. But upon deeper inspection, it appears to be false — or, at the very least, highly debatable.

The Bee lays out a rather convoluted argument to make that case, which it states in the opening paragraphs:

Every year from 2000 through 2015, more people left California than moved in from other states. This migration was not spread evenly across all income groups, a Sacramento Bee review of U.S. Census Bureau data found. The people leaving tend to be relatively poor, and many lack college degrees. Move higher up the income spectrum, and slightly more people are coming than going.

About 2.5 million people living close to the official poverty line left California for other states from 2005 through 2015, while 1.7 million people at that income level moved in from other states – for a net loss of 800,000. During the same period, the state experienced a net gain of about 20,000 residents earning at least five times the poverty rate – or $100,000 for a family of three.

If that is all you read, you might be convinced that California really does export the working poor, and only imports the really rich.

But the devil is always in the details.

In a footnote at the bottom of the page, the Bee explains how it arrived at the counter-intuitive conclusion:

Figures for this story come from the U.S. Census Bureau Public Use Microdata Sample…The Census Bureau asks the people it surveys where they lived exactly 12 months ago, making it possible to determine if they moved in the last year. It also asks about their household income during the last 12 months and calculates poverty status based on their answer. The Bee combined answers to these questions to determine how many economically disadvantaged residents came and left California. Since the Census Bureau doesn’t ask exactly when during the last 12 months someone moved, poverty figures in the story may include income earned both in their old state and their new home.

The most obvious questions are raised by anecdote in the Bee article, but not addressed in the statistical analysis.

  • How many of these low-income households are headed by people who had been doing low-wage, transitional jobs in that final 12 months while trying to find a “good-paying job” — and were forced to move out of the state to accomplish that goal?
  • And how many were simply unemployed altogether in that 12 months previous to moving out of California —since the data does not determine the source of the income (i.e. whether from unemployment insurance, government welfare programs, loans or work)?
  • That net loss of 800,000 so-called poor Californians — how many were they perpetually “economically disadvantaged” and how many were “displaced” as a result of decades of anti-business regulations?
  • And how do you determine how many illegal aliens — who, by necessity, avoid contact with government agencies — moved into California from “rule of law” states? (After all, California offers illegal aliens a whole host of freebies that other states do not, including free college tuition if they live in California illegally and send their offspring to a California high school for 3 years. That is a pretty powerful economic incentive — and one that is not addressed in the article at all.)

Meanwhile, the Bee has an agenda relies far too heavily on “anecdotal data” to promote its questionable conclusion.

Its first anecdote of a poor California expatriate — Kiril Kundurazieff, 56 — leaves a lot to be desired.  Kiril is clearly someone who hass been among the working poor most of his adult life, going from low-paying job to low-paying job. Exiting California to Texas is a natural move for Kiril, not a news story.  After all, he works for a living — and many of California’s poor are almost completely dependent on the government, or they are illegally in the country (and therefore severely underrepresented in census data).

With California’s extraordinarily generous welfare system, why would the actual poor ever leave?

The Bee’s examples of well-heeled immigrants moving to California? Government workers. Both school teachers.  Not corporate executives, not business owners – -not private sector wealth creators.

While this newspaper is one that has steadfastly ignored and glossed over Gov. Jerry Brown’s penchant for handing out taxpayer-subsidized, unsustainable benefits to illegal aliens and public sector unions — as well as his unnatural obsession with his pet project to end “global warming” (also known as the California High-Speed Rail Authority)—the Bee does do a decent job of making the case that California is now far too expensive for anyone but the very rich and the very poor.

But the biggest economic factors driving people to flee California are barely touched on in the Bee’s analysis: namely, taxes and regulations.

Anyone who has ever owned a business in California needs no prompting to tell you story after story about stupid, unnecessary time-wasting regulations and abusive regulators.

If you Google “state with highest tax rates,” California is number one in almost every category — and when you add up income tax, sales tax, and property tax, the “tax bite” is the number one reason most people cite anecdotally for leaving California. And the only people concerned about high tax rates are those who pay them — working people, businesses and property owners.

Sales taxes hit everyone who buys something taxable — rich and poor alike — but are not likely to inspire a mass exodus.

Unfairly high and disproportionate tax rates, such as Proposition 30 — a 13.3% income tax that only applies to the most successful job creators — are what start revolutions, or migrations.

Wouldn’t it be more logical that successful people looking to shield their income and avoid government harassment would be more likely to leave than poor people the government is helping?

The author spends far more time in his article citing “experts” in the poverty industry (rather than the private sector) — “affordable housing” non-profits and lobbyists — whose only solution is to raise taxes on the “working poor” left in California in order to hand out more benefits to “non-working poor.”

If reading tea leaves from U.S. Census data and hand-selecting anecdotes constitutes evidence these days, surely everyone reading this column has a story that would contradict the Bee’s premise.

The headlines have chronicled the exodus of those who were either business owners, high-paid corporate executives or retired government pensioners. Only one family I know of — so desperate, they moved to Idaho in the dead of winter — fit the Bee‘s profile.

The hard statistics contradict the conclusion of the Sacramento Bee author.

The middle-class has been run out of California, which has the third highest cost of living — behind Hawaii and New York — and the highest poverty rate in the United States.

While California may be home to 12% of the nation’s population, it still holds the unique, albeit undesirable, distinction of being home to one-third ( 34%) of U.S. welfare recipients.

And in spite of what the Sacramento Bee characterizes as a decade-and-a-half-long exodus of the poor, how is it possible that a full 25% of Californians still live below the federal poverty line?

Only in California.

Tim Donnelly is a former California State Assemblyman.

Author, Patriot Not Politician: Win or Go Homeless


Twitter:  @PatriotNotPol


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