Walt Disney Co. recently announced that 2,000 California workers will move to Florida. Many of these workers are part of Disney’s innovative “Imaginers.” Disney units are often said to have created “magic” in Magic Kingdom. In a letter to employees, Disney Parks Chairman Josh Damaro cited Florida’s “business-friendly climate and low income tax-free living costs” as reasons for the move.
Disney’s announcement of the move of the most talented and creative workers to Florida should not be underestimated. It’s part of a California escape that began at least 10 years ago.
In 2011, California’s population increased by 350,000, about the size of Anaheim. Only ten years later, California’s population growth fell to virtually zero. This is despite the fact that California’s natural rate of unemployment (birth minus death) and foreign immigrants remain positive. However, these increases are completely offset by the ever-increasing number of people moving out of state.
That number increased from 20,000 net outflows in 2013 to 261,000 in 2020. In 2019, state-wide comparable data were available, with California losing about half of its population (-0.51) to other states. In contrast, states like Florida were soon welcoming Disney’s Imagineers, with a net influx that added more than half (+0.62) to their population.
So what explains this big gap? In other words, why do people vote on their own feet by moving from California to Florida?
Using a statistical technique known as multiple regression analysis, we identified four variables that were found to be important in explaining net domestic migration in all 50 states. These four variables are listed in descending order of importance: 1. State regulation, 2. State and local taxes, 3. Climate, 4. It was employment growth.
Surprisingly, the median home price did not seem to have a significant impact on people’s migration decisions. The desirability of the state-wide climate was an important explanatory factor, but not important in explaining the difference between a net migration outflow in California and an influx in Florida. The reason for this is that both states are ranked high in climate, with California at number one and Florida at number three. A stronger job growth of 2.1% in Florida compared to 1.5% in California helped attract people to Florida slightly, but the impact was not significant.
Our findings strictly show that regulatory policy and state and local taxes are the two main reasons for explaining the net outflow of California and the inflow of Florida. When it comes to regulation, George Mason University’s Mercatus Center ranks California as more regulated than any other state in the country. For state and local taxes, the Tax Foundation’s State Business Climate Index shows that California is the second highest in the country and Florida is the fourth lowest.
According to our equation, these differences between regulation and state and local taxes account for virtually all of California’s net immigrant outflows and Florida’s influx. More precisely, the difference between California’s -0.51% outflow and Florida’s + 0.62% inflow is 1.13%. According to our research, 0.68% of the difference is explained by California’s highly regulated business environment and 0.50% by higher taxes. The sum of these two effects (0.68% + 0.50%) is 1.18%, which is roughly equal to the 1.13% difference in net migration between California and Florida.
California’s political focus has been on tax increases and regulations, especially for the past decade. Unfortunately, California civil servants, especially the Governor of California, have decided to ignore the effects of cumbersome regulations and high relative state and local taxes on where people decide to live and work.
Ballot box voting isn’t working to change its political dynamics, so Californians are voting on their own feet. The escape of Imagineer draws attention to that reality. But at the same time harmful to California’s future, the loss of 2,000 highly talented and creative people is only part of the herd of people leaving the state.
In a recent Wall Street Journal article, Aurora Capital Partners and Jerry Palsky, chairman of the 21st Century Economic Commission in California, wrote: 40 years … (But) there are deeper long-term problems that threaten the state’s finances and its desirability as a place to live and do business. “
Mr. Pulsekey’s quote is reminiscent of John Steinbeck’s classic novel, The Grapes of Wrath. There, the Jords moved from Oklahoma to California in search of a golden state. A more realistic scenario is that the descendants of Ma and Pa Joad get their stakes and head east back to sign new opportunities in our country.
James L. Dotty is the Honorary President and Professor of Economics at Chapman University, and Raymond Sfire is the Director of A. Gary Anderson’s Center for Economic Research at Chapman University.
What explains the California exodus? – Press Enterprise Source link What explains the California exodus? – Press Enterprise