Just when we’d finished reading all the articles about drought-stricken California, we started seeing pictures of Houston underwater, or videos of rain gushing in the streets of Austin. While the Texas floods of 2015 are grabbing headlines, another flood persists.
Californians are still pouring into Texas.
It’s not clear when it started, but the left-leaning Texas Tribune gives us some idea about the magnitude of the influx: “With its economic troubles, California has been losing people in droves. The plurality of those migrants have moved to Texas, as many as 70,000 in 2011 and 60,000 in 2012.”
Of course, publications like the Texas Tribune rarely offer analysis about the causes of such migrations, particularly as the resulting narrative might not be all that comfortable to sit with. (But I’m your huckleberry.)
So why have Californians continued to pour into the Lone Star State? Like many explanations, this one has multiple, interconnected factors. But here is a top five:
- Jobs, Jobs, Jobs - Jobs are a symptom, generally, as opposed to a cause. But people move for opportunities. So let’s look at those opportunities, as offered by the Texas Public Policy Foundation, based on BLS data.
Over the last decade, California has had 7.1% growth in employment while Texas has had 22.4% growth in employment — “result, Texas job growth more than triples California’s” over the last ten years.
But more recently, job growth in California has been on a par with Texas. So there must be other reasons for the continued influx. (Many people don’t realize it, but shale boom was the biggest contributor to the economic recovery, and Texas is a major player in that boom.)
- Affordable Housing - When we compare major metropolitan areas in the two places, housing in Texas is far more affordable — so much so that many Californians are selling their inflated homes and buying Texas homes in cash.
- Regulatory Arbitrage - California is increasingly overregulated. The business climate in far more stable and predictable in Texas. From $15 minimum wages to the uncertainty created by an activist legislature, California entrepreneurs are relocating in more hospitable business climes. Unions also dominate in California, as indicated by Los Angeles’s minimum wage hike.
- Taxes - Both in terms of business taxes and personal taxes the Texas climate is more favorable. Combined with a zero-percent income tax in Texas, the total individual tax burden for Texans offers good reasons to move.
- Unions v. Right to Work. The labor market is more flexible in Texas. This has implications not only for setting up businesses and hiring people, but being able to make changes to the workforce, as well. When it’s easier to make such changes, entrepreneurs are generally more comfortable with hiring to start with.
When it comes to economics, a lot of more conservative Texans are concerned Californians will bring their curious voting patterns with them. After all, it looks like these Californians are unwittingly fleeing the very policies they voted for. But Texans need worry less, perhaps, according to the Texas Tribune.
First, these newcomers, on average, tend to be conservative. Pooling data from the May 2012 and February 2013 UT/Tribune surveys, we found that 57 percent of these California transplants consider themselves to be conservative, while only 27 percent consider themselves to be liberal (a fair guess as to the margin of error is somewhere around +/- 7 percentage points).
Second, these new Texans aren’t rushing to find homes in the state’s urban centers: 55 percent are heading to the suburbs, the rest evenly dividing themselves between rural and urban locations.
Depending on who you ask, maybe the continuing Texas flood isn’t such a bad thing. It just goes to show that democracy in America is more about voting with your feet than voting in the ballot box.