WatchI hope this hasn't already been posted. Didn't see this on the site. Thought it was interesting.
http://www.manhattan-institute.org/html/cr_71.htm
Executive Summary
For decades after World War II, California was a destination for Americans in search of a better life. In many people’s minds, it was the state with more jobs, more space, more sunlight, and more opportunity. They voted with their feet, and California grew spectacularly (its population increased by 137 percent between 1960 and 2010). However, this golden age of migration into the state is over. For the past two decades, California has been sending more people to other American states than it receives from them. Since 1990, the state has lost nearly 3.4 million residents through this migration.
This study describes the great ongoing California exodus, using data from the Census, the Internal Revenue Service, the state’s Department of Finance, the Bureau of Labor Statistics, the Federal Housing Finance Agency, and other sources. We map in detail where in California the migrants come from, and where they go when they leave the state. We then analyze the data to determine the likely causes of California’s decline and the lessons that its decline holds for other states.
The data show a pattern of movement over the past decade from California mainly to states in the western and southern U.S.: Texas, Nevada, and Arizona, in that order, are the top magnet states. Oregon, Washington, Colorado, Idaho, and Utah follow. Rounding out the top ten are two southern states: Georgia and South Carolina.
A finer-grained regional analysis reveals that the main current of migration out of California in the past decade has flowed eastward across the Colorado River, reversing the storied passages of the Dust Bowl era. Southern California had about 55 percent of the state’s population in 2000 but accounted for about 65 percent of the net out-migration in the decade that followed. More than 70 percent of the state’s net migration to Texas came from California’s south.
What has caused California’s transformation from a “pull in” to a “push out” state? The data have revealed several crucial drivers. One is chronic economic adversity (in most years, California unemployment is above the national average). Another is density: the Los Angeles and Orange County region now has a population density of 6,999.3 per square mile—well ahead of New York or Chicago. Dense coastal areas are a source of internal migration, as people seek more space in California’s interior, as well as migration to other states. A third factor is state and local governments’ constant fiscal instability, which sends at least two discouraging messages to businesses and individuals. One is that they cannot count on state and local governments to provide essential services—much less, tax breaks or other incentives. Second, chronically out-of-balance budgets can be seen as tax hikes waiting to happen.
The data also reveal the motives that drive individuals and businesses to leave California. One of these, of course, is work. States with low unemployment rates, such as Texas, are drawing people from California, whose rate is above the national average. Taxation also appears to be a factor, especially as it contributes to the business climate and, in turn, jobs. Most of the destination states favored by Californians have lower taxes. States that have gained the most at California’s expense are rated as having better business climates. The data suggest that many cost drivers—taxes, regulations, the high price of housing and commercial real estate, costly electricity, union power, and high labor costs—are prompting businesses to locate outside California, thus helping to drive the exodus.
Population change, along with the migration patterns that shape it, are important indicators of fiscal and political health. Migration choices reveal an important truth: some states understand how to get richer, while others seem to have lost the touch. California is a state in the latter group, but it can be put back on track. All it takes is the political will.
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mmmarvel says
Yeah my colleague who works with me on this project in the mid-west is from Houston. Originally from CA. He loves it there. He travels the country on IT projects , while wife and kids in Houston and works through another friend's IT company that is incorporated there. Best is he does not pay a dime in state taxes and of course he only pays 710 a month for a 2br in a gated complex with swimming pool. They sent him a rent increase notice with all kinds of reasons justifying the increase and raised the rent by a grand total of 5 dollars a month!!!!
But from what I heard Austin and Dallas are better for IT than Houston. If I wanted to continue contracting, I would move to TX-it would save me a ton in state taxes. But looking for a full time job now-so looking at the two that have moved into the final stages .
Quiet a lot of my friends moved from CA to TX and I have a cousin in Austin who has 3 houses there.
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lostand confused says
Brown as in mostly desert and/or brown 90% of the year vegetation. Aka the bottom 600 miles of Ca or the western 600 miles of Tx.
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bob2356 says
Well, not all of socal is like that. San Diego is pretty and go east on 8, you hit alpine forests and lakes and then go downhill to deserts again as it goes to AZ. Then upto Santa Barbara, it is coastal desert, with the distance from the coast determining desert or not. But north of Santa Barbara, it becomes very green -drier away from the coast. Just go under the tunnel north of santa Barbara into Buellton and it is green-and also a CHP ticket hotspot! But the coast is beautiful with pine trees and thick vegetaion. Now the central valley is probably the most productive agricultural area in this nation. After moving here to the mid west, I keep wondering why they have so mujch fallow land here-with so much water-not much irrigation here.
Even Ventura county, just north of LA is prime agricultural land. North of Santa Barbara is defnitely not brown-so only 200 mi of coastal land can be designated as brown-north of that is very green and Pismo beach can get cold in the winter.
But yes the real interiors like Barstow etc can get brown/desert -but it is the high desert. Then north of that is the Sierra nevadas-east of which is the high desert bordering Nevada and west is very thick forest. Just about an hour and half north of Santa Monica is the Tejon Pass at 4000+ feet and it can be snowed out once or twice ayear. The mountains surrounding that have snow for a lot more days. Then in Palm Springs, you have the mtns with snow in winter. So it is not the same everywhere-a few hours out of L.A or S.F -everything changes. That part I really love and miss.
TX-. I have driven the entire stretch of Highway 10 , 40 and 90. I actually loved 90-saw a lot of pronghorn antelope! the north section of TX was somewhat boring-though I drove the bulk of it after evening-so not a fair statement. But I10 is just one long stretch-I drove pretty fast, didn't meet any cops. I hear they have a toll road near Dallas at 85mph?!!
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bmwman91 says
Although asking prices probably bottomed in Spring 2012, 3 bedroom 1000-1500 square foot 1950s ranches in the Lakewood Village neighborhood have been selling in the $400s since late 2011.
There's way less inventory now than earlier in the year.
For sale now for $399 (listed as a contractors special at 1468 square feet although records show 1100 suggesting the two car garage got used as a bedroom):
http://www.trulia.com/property/3096172114-1029-Lakehaven-Dr-Sunnyvale-CA-94089
5500 square foot lot. I haven't looked at zoning regulations, although one of the neighbors just built a decent sized out building in their back yard and I'd guess that you could build a workshop.
Closed 9-6-2012:
http://www.trulia.com/homes/California/Sunnyvale/sold/7529856-820-Lakehaven-Dr-Sunnyvale-CA-94089
there are other prices on the low side of $500.
FWIW, the Techshop in San Jose does not suck (open 7 days a week until midnight) as a way to have access to large machines which you don't use much and don't fit in a small shop or budget. 3HP vertical mills, wood and metal lathes, 4x8' shop-bot CNC router, 12" helical head jointer/planer, CNC mill, Epilog laser, water jet, Sawstop cabinet saw, etc. They run membership specials - I picked up one which runs $67/month over thanksgiving.
There's also the sawdust shop in Sunnyvale which sells access by the hour (but is only open through 10pm). The highlights there would be the 22" thickness sander and decent bandsaw setup for resawing wide boards.
Starting compensation packages for new graduates at the big tech companies have broken $100K, 15 years of decent experience yields something in the $200s at large companies not including stock movement, and there are startups out there desperate enough to match that in cash for the right person. Add 50-100% for DINK couples.
While median wages shouldn't support higher prices, about 25% of Silicon Valley residents work in tech and there should be enough of them able and willing to pay a lot.
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That's a nice area of Sunnyvale that you pointed out.
Beautifully "nestled" in between 237 and 101.
For $400k you can get a contractors special directly on top of one of the countries most renown "Superfund" site.
http://iaspub.epa.gov/apex/cimc/f?p=255:41:2852475519780001::::P41_GEOSEARCH:37.3787%20-122.0225
I guess they are right when they say nothing in life is free!~
Have fun starting your family off with some Thalidomide babies!
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dunnross says
A bit of Googling found this:
page 11 shows that in 1982, median price in Chicago was $73k. in Detroit, $47.5k. In SF, $124.9k. True, this is 1982, a little after the 70s. And it's SF, not SJ. Nonetheless it's pretty clear that the Bay Area was more expensive than the Midwest in the 1970s.
now, if you meant the 1870s, you are correct. SJ was farmland then, and Chicago was already an established city.
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forgot the link
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=4&cad=rja&ved=0CEgQFjAD&url=http%3A%2F%2Fwww.nber.org%2Fchapters%2Fc8820.pdf&ei=KDXbUNvzJIfxiwKnzoCgCA&usg=AFQjCNG4mcfAJRCCdMGrdfRO4WtBQUR4cA&sig2=RmVM0lKPqXmxqo09CeOOyA&bvm=bv.1355534169,d.cGE
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Sunnyvale, CA
donjumpsuit says
It is quieter than the Linfield Oaks neighborhood in Menlo Park and downtown Palo Alto where Caltrain is nearby and the same square footage comes with a $1-$2M price tag (but nicely updated interior).
Superfund sites go with semi-conductor companies like peanut butter with jelly. Santa Clara has Siemens and Intel; Sunnyvale has AMD; Mountain View has NEC and Intel; and Palo Alto has HP.
In this case the nearest is over a mile away where $700K house prices predominate.
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Is that it, turtledove ?
No hard figures. Only percentages. Give me real numbers.
It's in the ARITHMETIC.
The massive business exodus is mostly in your mind.
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dunnross says
But its been expensive for a long time. My former neighbors bought their home back in 1979 for 100k. The house itself was in very poor shape. That amount was about 3 times more than what my parents paid for a new house in NC a few years prior. They too also mentioned the difficulty in finding affordable housing, even back in the late 70's.
turtledove says
I don't buy that "conservatives" alone are moving out of Cali. I'd even wager that of those moving, perhaps most are actually younger people who want to relocate to a major city that's more affordable, hence they're probably more liberal. A good example of this is that states that were formerly extremely right-leaning are becoming less and less so: A good example: North Carolina.
mmmarvel says
We looked into moving to Austin. First of all, there weren't really any 135k houses unless you wanted to live in suburban sprawl hell. Anywhere in the city was more like 250-300k and the tax rates ranged from 2-3%. So one could easily be on the hook for $10,000 in property taxes alone, and even though there isn't any state income tax, there's still federal. After doing the math, a lot of the cities in TX that were somewhat viable tech cities were for all practical purposes as expensive as the Bay Area, mainly because wages were less to start with and the home prices reflected this.
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male
That California is not worth it!
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121212 says
Totally worth it. 41% of 2011 American venture capital spending went into Silicon Valley.
That
1. Does wonders for the number of interesting jobs available which is far more important than home size or age (you spend fewer waking hours there).
and
2. Maximizes your chances of finding the right combination of sensible business people, fun technology, enough runway, and the right life cycle point for a liquidity event that lets you join the leisure class.
The weather is nice too. While you can always dress warmer to avoid cold, there are limits to how well you can compensate for hot weather before being arrested for public nudity. There also isn't a good work around for rain which makes you wet, either because your clothes aren't water proof enough and the precipitation gets you or they are and you drown in your own perspiration.
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male
It's not worth it. I would move back in a second if it was.
Yes the weather is lovely, but if your earning the nations average wage, forget about it.
It's not worth it.
You also forget Tehrangeles!
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male
http://www.foxnews.com/politics/2012/12/22/new-tax-increase-in-california-stirs-debate-about-adding-to-exodus/
New tax increases in California stir debate about adding to exodus
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male
....." And the recently passed tax increase for families making more than $250,000 each year could further shrink the tax base for California, whose 2012 budget deficit is projected to hit $28 billion."
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Seriously,
The Bay Area is a great place to be, but your really have to take advantage of what it has to offer, for it to be worth it.
Also, you have to have a great profession as well (programmer, engineer, IT, computers or support). If you are not in a great profession, one that has a lot of job seekers, and few open positions, then you will suffer greatly.
You must take advantage of any ocean activities or outdoor activities. The climate makes them accessible year round, whether it's biking, hiking, kayaking, sailing or surfing.
OR take advantage of being so close to Tahoe, one the worlds greatest winter sports locations. The luxury of traveling into the snow, and not having to deal with it on your morning commute is worth it's weight in gold.
Or you have a growing family that can take advantage of the "In-State" rate for UC's.
Perhaps you are a generational Californian, and have family with wealth already built into property, making it desirable to live, work, and save here. Perhaps you are a child who lives at home, while saving up for a down payment.
These are all great reasons to stay and live in this great area.
However, if you are a transplant with limited family ties, don't take advantage of the climate, and/or are in a field that pays less than 6 figures for an annual salary with little or no job security, good luck.
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turtledove says
Yeah. I know plenty of conservatives in California. They're business people, and stay where the talent and business are. They're here.
A lot of people cry about taxes, but I don't think anyone decides to move because of them really. If it were so, the best businesses in the world wouldn't start and stay here...Google, Apple, come to mind, and SF is booming despite their additional tax burdens.
Besides, conservatives are mooches (as is ebident by the red/blue give/get state maps). Maybe the conservatives that move just weren't getting enough free stuff from us? :)
In seriousness, wouldn't the decline of the "Golden Age of California" be tied to the misguided anti-tax zealots of Prop 13 and Jarvis?
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Huntington Beach, CA
This will be wildly unpopular with most homeowners, but if prop 13 goes away we would see a big improvement in the state. As it stands, about half the homeowners and most the corporations are paying tax like its 1979, a tenth or less what should be paid. To make up the enormous deficit incurred by gifting all this money to the wealthiest part of society, sales taxes, income taxes, car registration taxes, gasoline taxes, and all other manner of taxes must be raised to have enough money to give our kids a sub par education.
Young families get hosed twice: first with full pop property taxes, and second with terrible schools for their kids courtesy of the "got mine" crowd that won't pay a fair share.
I Think prop 13 is #1 on the Democratic supermajority Assembly's to-kill list in January.
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Quigley says
Well, if Prop 13 goes away, they need to halve the state income tax rate or even better than that. Nuts will probably raise both.
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lostand confused says
They might balance it out with a sweetener for the middle class. I think they're keenly aware that any obvious overreach will be met with reprisal.
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Pleasanton, CA
How many people working for those tech companies really believe they will be working for them in 20 years?
Most tech is project oriented. Projects have a beginning, a middle and an end, and if there is no new project, hasta luego job.
When the red light flashes, we need men, but when it stops flashing?
If I were making a fabulous salary in tech, I would be saving like a bandit and would not invest in any kind of house or real estate. Rent and save while the climate is good, in five years your job may be in Singapore or India, or if you are lucky, Austin.
Who really thinks that the state is going to reduce other taxes if Prop 13 is defeated? They will just abuse that take and come back for more later, once stuffed, never satisfied. Again, what is the FUTURE of taxation in CA. I remember when they thought that increasing the sales tax to 6 percent was outrageous, and most of the state infrastructure was built with relatively reasonable taxes. The loss of efficiency is staggering.
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Ceffer says
Very true. But one can always become a glorified paper pusher-that seems to be the only skill needed in IT that needs to be in this country-that is still in demand!!
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drew_eckhardt says
I am familiar with that area myself. I went through it when I was looking to buy my own place. Many of the houses appeared to be overstuffed with occupants as evidenced by the appalling lack of driveway and street parking. In some areas the number of street parked full sized pickups made two way traffic difficult. Lots of cheesy "upscale" entry doors and pillar entryways and cheap add-ons put above the garage with no thought to aesthetics or style - it looks like the owner put a large box on the garage. Most yards were not maintained well. It'd be a paradise if you don't like HOAs. Not my cup of tea though.
drew_eckhardt says
Nice work if you can get it. Please also be more specific than "tech". Those salaries you quote may be applicable to a few specific fields and even then only for top tier graduates.
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New Renter says
Nope. General engineering positions. I work in the field at one of the larger players in the industry and you HAVE to offer grads at least $85k just to remain competitive in your hiring. Google, Microsoft and Apple are paying crazy top-dollar for new talent. Now, I am not 100% sure that they are actually capitalizing on it because these grads usually bounce to a different employer within 2-3 years, which is just around they time that they become productive, but these companies still pay them. 5 years out of engineering school, if you perform well at companies like these, you can pull a base of $120-150k, with cash bonuses ranging from $10-25k and compounding stock awards vesting for anywhere from $10k to $150k. Some friends that went to Apple will basically be doubling their $125k salaries with their stock awards after they have been there ~3 years. Maybe a bit less now thanks to AAPL's mini-implosion, but it is pretty easy for a 26 year old to gross $150-200k here if they are at a large consumer electronics/web company. There are CERTAINLY more 25-35 year olds with those kinds of incomes (and many are paired up) than there houses for sale. The results of this are in plain sight right now. Add in investors and wealthy immigrants, with a dabble of RE-desperation mania and it's fun Fun FUN!
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bmwman91 says
There is no such thing.
Civil Engineers ("real engineers" if you ask them) don't make anywhere close to that kind of money. Nor do most classes of engineer.
Google, Microsoft, and Apple don't employ "General engineers". They employ, primarily, software engineers, with a smattering of EEs thrown in the mix. Those are definitely high paying jobs, but there are plenty of other engineering positions that pay relative crap.
I have a friend who is an aerospace engineer at Boeing. 10 years experience, makes about $100k. I make about 3 times that as a software engineer with only five years more experience.
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I'll concede that "general" was the wrong term. I tried to note in my post that the pay is that high if you are in at major places like those that I mentioned, whether you are an ME, EE or SE. Consumer toys are hot right now, and the money is good in that area. Anyway, these companies have quite a lot of EE's (digi design mostly, some VLSI), some ME's (lots of manufacturing/tooling experts, plastic/metal designers, some acoustics experts). There are of course more SE's since the product is ultimately software and it needs somewhere to operate and live within, but there are a lot of hardware and operations engineers at these companies.
Which Boeing campus is your friend at? $100k a year in a lot of places is as good as $300k in the SFBA. A coworker of mine used to design and run FEA's for Boeing's 787 program in Washington and claims that they pulled about $110k after about 4 years there. MechE by training.
Every engineer thinks that they are a "real" engineer. Good engineers know that a "real" engineer is proficient in multiple disciplines, and then don't run around making claims about being a "real" one except maybe when joking around with their coworkers during a break!
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bmwman91 says
I work at one of these companies and the number of EEs is relatively tiny (and most are working as de facto SEs). MEs are non existent outside of the one SV company that actually makes stuff and pays well, Apple (and even there, it's not many; most of the ME stuff is done by the companies that they contract to do the manufacturing).
That said, every SE, ME, and EE combined is a relatively small portion of all people who work in "tech".
bmwman91 says
No, there really is a huge distinction between civil engineers and the like and people who write software. They have certifications and secret societies and stuff; they also get paid poorly. Most SEs have degrees in CS, so they're really mathematicians, but we call them engineers because whenever you call somebody a scientist you assume that they're doing research.
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lostand confused says
That's large portions of the northeast winter weather (and that would be the worst of the winter weather in Baltimore), not Texas.
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Ceffer says
I agree. The same thing applies to any engineering job (used to do that and it's not steady work).
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Kevin says
300k salary writing code?? That's about triple the average for SE's in SV. Impressive, you must work for a very, very generous company.
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That's what software engineers with 15 years experience get paid by the top tier companies. I don't work in sv anymore though.
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bmwman91 says
Yes please be precise when spreading such information. That's how kids get the idea STEM careers actually pay off.
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Kevin says
I don't believe that. I know a lot of sw engineers and I'm pretty sure even the richest companies do not pay not even half that much unless the guy is a superstar. $120K is median these days. Senior people make more, but not that much more.
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New Renter says
Define "pay off"?
Most kids won't end up in a position that "pays off" in any field. The top few percent gets the "pay off". Majoring in finance is not a sure-fire recipe for the big bucks either unless you are unusually smart and unusually ruthless.
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Patrick says
You can do it at the principal / senior staff software engineer level (actual, not via title inflation) with over 15 years of experience and a bunch of meaty projects under your belt. I say that as a software engineer with 19 years in industry doing systems software for business critical applications with an emphasis on high availability and distributed systems. It means working for a big company with the problems that go with that. Lots of very good software engineers also don't have the aptitude/motivation/opportunity to make it that far ever.
Base salary can run at least $215K.
Four year RSU packages can run at least $300K at the date of issue.
Mix in a signing bonus or some stock movement and you get to $300K/year average.
For example:Glass door Google Senior Staff Software Engineer in mountainview has a $422K average total pay for the level with 5 data points and $178 minimum total package.
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Patrick says
I am a senior software engineer. My base salary is $190k, I get $50k in bonuses, and I average about $100k in equity grants per year. I have cleared $350k every year for the past 3.
More senior people get about the same base pay, but larger bonus targets and equity grants. My company issues new stock grants every summer with a 4 year vesting period, so they stack. There are hundreds, maybe thousands, of engineers at my level in the company.
Google, Apple, Microsoft, Amazon, and Facebook all pay competitively (I've had offers from all but one). Companies that aren't relevant anymore pay much less. Startups and cutting edge research pay varies widely but tends to be lower unless your idea becomes successful.
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It's the golden handcuff.
It is why employees don't leave companies like Apple, Linkedin, Facebook, etc. Every whichever month of the year or so, X amount of stocks are vested and payday. For example, an Apple employee may look like this.
RSU granted,
Vest in June 2013 - 250 - shares
Vest in June 2014 - 200 - shares
Vest in June 2015 - 175 - Shares
Vest in June 2016 - 150 - Shares
On June 2013, payday is (250*$500) or $125K
There's 400K reasons to stay another four years. The pipeline doesn't stop, as every share vested is replaced by new shares. If an employee leaves, it is because their vesting is not worth that much or another company is offering a boatload @ sign on.
RSU's are actually negative for employees as ISO's give more upside (much more shares for the same amortization expense from black scholes model to expense stock options). More shares give more upside. The transition to RSU's also give predictable payout that people can estimate and feel comfortable about taking on large purchases as well. recently, there is an uptake in granting of PSU's
Then there is the cash bonus which varies.
Finally, these companies are much more generous with 401K matching as part of employee retention as well.
So when people talk about 150K in base pay, if the company is a success, it's more like 200-300K. Employees with base pay above 100K are almost always in stock and cash bonus program.
That's the reason why a 1M - 1.5M cupertino home gets around 40 offers.
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Well, I didn't start making the big dollars until I'd started on the hedge fund stuff.
I'm an east coaster and for the most part, work in applied chemistry to IT, was capped at $110K-$120K. And for the most part, non-management staff were usually curtailed after that boundary.
On the other shoe, in trading, anything less than $200K (base salary & P/L payout) is not considered successful. We even turned away a tax consultant, asking $300K/yr+ because we figured we could do the work ourselves, pocket the fixed costs of a $300K overhead, and use an outside consultant, from time to time, to verify our results. Well, that move paid off, as we've paid out nicer bonuses to the overall team, then in maintaining high costs Bostonian-NYC financial types.
All and all, as a company grows, it's a huge waste to have ppl on a fixed cost salary of greater than $120K. That's money you'll never recovery and ultimately, if you have a series of down quarters, you'll need to be able to fire staff w/o losing valuable work. All and all, it's better to pay low and make it up on the bonus side.
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Rin says
Out of curiosity, did you start your own hedge fund and how does one become a professional trader? Does one look at their personal trading history over the years or just take people and train them?
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lostand confused says
Yes, I'm one of the principals at my firm; so while I'm not the exact founder, I'm in the starting crew and have equity.
What you're probably referencing is known as a proprietary "prop" trading firm vs an actual hedge fund. A prop trading firm does take in in-experienced persons, with a personal trading history, & allows them to sink or swim. Sometimes, if you have the stomach for it, this can be a way to a low six figure income, if you can get past the first few quarters of bumps/bruises, with minimal prior exposure to the industry. Afterwards, once you're proven, you're in demand. I was told that more than 80% don't make it, through this pathway.
For HQs, however, most ppl have some experience at either a HQ, an IB, or a prop trading firm, before applying. These folks can perform many tasks from sales (client/account management), to tax services, to prop trading support. As for the quantitative analysts "quants", there are those who get hired by other quant teams, straight out of let's say engineering school with BS to PhDs in Applied Math to EE to Financial Engineering/Operations Research. Typically, these folks work on algorithmic trading strategies but in general, the senior trader uses these tools at his discretion.