I guess I should take some solace in the fact that Illinois isn’t the only state with problems. California has plenty of problems, too:
California remains the Golden State for most of us, a place of opportunity and fantastic weather. But for an increasing number of our residents, it is a place of perpetual economic struggle.
The difficulties are detailed in a new study by United Ways of California, “Struggling to Get By: The Real Cost Measure in California 2015.†The RCM is a new formula that takes into account California’s high cost of living.
It found that 31 percent of Californians were living in poverty in 2012-13. That’s higher than the 23.4 percent poverty rate, the worst in the nation, found in an October 2014 study by the U.S. Census Bureau.
A big cause, obviously, is the high cost of housing. According to a March analysis by the California Legislative Analyst, “Today, an average California home costs $440,000, about two–and-a-half times the average national home price ($180,000).â€
Another big factor is the ongoing exodus from the state of decent-paying jobs for workers with few skills, Bill Watkins told us; he’s the executive director of the Center for Economic Research and Forecasting at California Lutheran University. “California used to manufacture Firebirds and Camaros,†he said, until General Motors’ Van Nuys assembly plant closed in 1992. Aerospace also has been hit hard by consolidation and moves to other states.
California’s population continues to grow. People with skills are leaving; they’re being replace by semi-skilled and non-skilled immigrants. Nearly 2/3s of California’s immigrant population are on some form of public assistance. It’s the cat and rat farm again. There’s a sucker born every minute.
I no longer know what to believe on California. The last time I read on it the stats showed more upper income people coming to CA than leaving. Workers leaving were mostly in the low income groups. As to the poverty rates, I think one should include health care in those calculations, and if you do that I suspect CA doesn’t look so bad compared with some other states.
However, on housing costs I am in agreement. Their high costs are largely self-imposed I believe. There is some built in since you have limited amounts of Bay front property, but from out here, it looks like policy is the bigger issue.
Steve
In the 12 month period ending in March 2014 Chinese nationals spent $22 billion on American residential real estate, mostly in California. Some of them are resident aliens; most are not. If that’s “upper income people coming to CA” that could reconcile the inconsistency.
Oops. Went and read your link. Important to read sources. Here is what they said.
“Immigrant households’ use of welfare tends to be much higher than natives for food assistance programs and Medicaid. Their use of cash and housing programs tends to be similar to native households. ”
First, illegal immigrants are not eligible for Medicaid. Otherwise, as they note, this is mostly income related. As we now know, lots of WalMart, MacDonalds and other low wage workers are on Medicaid and food stamps since they don’t pay enough to cover lots of basics. We could end this if we want, but what then happens to wages at those places and to total employment?
Steve
My point was largely that their incomes were lower. You can’t make up for lost revenue by adding people who, due to need, will increase the demands for more revenue.
CA is home to limousine and NIMBY Hollywood liberals, Silicon Valley (which seemingly has no $$ boundaries), powerful public sector unions — the political enforcers of CA fiscal policy, food producers of the country, now under duress from unattended-to water problems, and open-armed social programs luring everyone else to partake of the CA magic.
In the meantime we have a creative democratic governor who shifts monetary liabilities around in order to make the budget momentarily look good — albeit there looms huge long term issues, especially regarding the satisfaction of pension obligations. We also have some of the highest income taxes in the nation, with an overwhelmingly lop-sided democratic-run legislature, who are always at the money trough attempting to find new ways of plying revenue from those capable of paying it. Small businesses struggle to make ends meet, while others pick up stakes and move elsewhere. And, our Covered California healthcare system, while much better than the disastrous ones set up in Oregon, Maryland, NE, Vermont, HI, MA etc., still has problems shedding doctors from it’s networks, as well as creating financial difficulties for many because of promoted restrictive plans called EPOs (Exclusive Provider Organizations), which pay nothing should a person seek care outside of their designated network.
To top it all off, the state is riddled with earthquake faults, a reality recently published in the New Yorker exposing the possibility of a Cascadia Mega Earthquake (up to 9.2) in the near future of the Pacific Northwest.
Other than that, it’s a great state!
I was hoping you would comment, jan. CA is just what all liberal orthodoxy results in. It may be well intentioned, but as a practical matter it’s for the well off and anathema to the bottom third.
There is no actual evidence that doctors are leaving medicine in general, and certainly can’t find it for California. As a group, you decided to severely restrict property taxes, then complained when the revenue needed to be made up elsewhere.
http://www.forbes.com/sites/dandiamond/2015/06/02/why-doctors-really-quit/
Steve
As a follow up to your recent China piece, and why the Chinese are buying in CA.
http://ftalphaville.ft.com/2015/07/24/2135236/the-greatest-sustained-em-reserve-slump-in-20-years/
Steve
Maybe. Something depends on the source of the money. I strongly suspect that one of the reasons is that party officials are looking to park the money they’ve embezzled somewhere outside China. It’s their retirement plan.
As a group, you decided to severely restrict property taxes, then complained when the revenue needed to be made up elsewhere.
You’re probably referring to the much maligned prop 13 which social progressives perennially cast as the “kitchen sink” collection basin for all of CA’s fiscal woes. The fact that property taxes are realigned upwardly, after every transfer of ownership (even when buying out a partner’s share), doesn’t seem to permeate the echo chamber of those who erroneously field the notion that prop 13 has somehow frozen property taxes. The resulting higher evaluations and tax basis of properties (under the prop 13 guidelines), produce increased revenues for the state, year over year — especially in the runaway housing market CA is currently experiencing. These higher revenues, though, are never enough in the eyes of those who only want more social programs tacked onto the budget (with little to no oversight) rather than applying any revenue increases to solving it’s existing fiscal holes. That’s the democratic way — something Drew was alluding to in his post.
As for Obamacare effecting peoples’ access to medical care through exchanges set up in CA and elsewhere, let alone the cost of healthcare when you combine one’s unsubsidized premium prices along with their high deductibles, it’s not the kind of health care reform people were promised. Furthermore, under the mandates, restrictions etc. of the PPACA big insurance companies are consolidating and becoming bigger, availing people with fewer health insurance options. This only shrinks competition, resulting in setting up future scenarios of higher price “norms.”