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Job growth is booming across the U.S. but not in California. Here's why

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Re: Job growth is booming across the U.S. but not in California. Here's why

#11

Post by api »

ramesh31 wrote: post #7

California is full, plain and simple. The people who live there and control the land have decided so, both implicitly and explicitly.

I realized after a while of living there that California is run as a real estate cartel. Land owners who bought when the state was cheap own it, and everyone who bought later is beholden and locked in with golden handcuffs to the high price environment they created.

I call it a cartel because the scarcity is 100% a policy choice. Density is not high, public transit is awful, and there is a ton of land left to develop on. Real estate in California is like diamonds from DeBeers.

If you aren't rich, don't stay there. All your surplus will go to landlords. If you buy at these high prices >50% of your income will go to servicing the mortgage and if the property market there ever does crash you'll be ruined. You’ve basically bought into a cartel.

I'd say for the Bay Area it's worthwhile to go to build out your career but if you aren't making at least $350k/year by age 35 leave.

Personally I’m glad I left because I loathe this property cartel and what it does to people and wouldn’t want to put my money into it.

IMHO the state has this totally fake reputation as a liberal “woke” place when in reality it’s a landlords kingdom. Texas is more progressive than California because a working class person can afford a home.

Re: Job growth is booming across the U.S. but not in California. Here's why

#12

Post by Jcampuzano2 »

7thaccount wrote: post #3
bugglebeetle wrote: post #2

> “The reason why Texas and Florida are doing well and California isn’t, it’s the cost of housing and high taxes,” said Sung Won Sohn, an economist at Loyola Marymount University in Los Angeles. “We have lost a lot of small businesses.” This former is the crux of the problem: California entered into a suicide pact with real estate speculators in the 70s, from which it seems entirely unwilling to extricate itself. It’…

I've had several offers to work in startups in California that don't do remote. Instead of just saying no outright I ask the HR person where the office is or look it up. It's usually near Silicon Valley and I have to explain that they'd have to pay me CEO pay to make up for the increase in living/home expenses. I mean...$1.5M to get a home similar to what I paid $150k for not that long ago is hard to justify.

I was born in California and moved away because I wanted to experience other things after college. It's now 15 years later and plenty of offers have been given for me to move back, but not a single one would make up for my quality of life/cost of living hit I'd make moving back.

I'd have to make like 3x more than I do now to keep the same quality of life and nowhere comes close to that at the moment.

My whole family still lives there but I'd rather them move closer to me than me move there.

Re: Job growth is booming across the U.S. but not in California. Here's why

#13

Post by nostrademons »

bugglebeetle wrote: post #2

> “The reason why Texas and Florida are doing well and California isn’t, it’s the cost of housing and high taxes,” said Sung Won Sohn, an economist at Loyola Marymount University in Los Angeles. “We have lost a lot of small businesses.” This former is the crux of the problem: California entered into a suicide pact with real estate speculators in the 70s, from which it seems entirely unwilling to extricate itself. It’…

Sort of? California's economy is shaped like a pyramid scheme in many regards, and land speculation is one of them. It also filters down into local tax revenue (housing prices must continually increase for municipalities to balance their budget, because of Prop 13), the type of industries that can be located there (only the most high-margin can survive the cost of living), the sort of folks who live there (who generally want to get rich quick or admit defeat and move home), and the public discourse (which is always hyping up the next big thing).

But in general the bottom of the pyramid lies outside California. All that money that eventually ends up in the pocket of California real estate speculators? Most of it comes from the pension funds and 401(k)s of ordinary workers in the rest of America, which invest in the darling companies of the day not realizing that everything is temporary. Those $2M ranch houses in Silicon Valley are bought by folks bringing in $500K in stock options per year, which is all fueled by their employers being worth $2T.

California's problem today is that we're between pyramid schemes. Most of the old-line web/mobile/marketplace schemes have reached maturity and are nearing collapse, but new pyramid schemes like crypto and AI are just getting started. Until the dollars start flowing in earnest California will likely teeter and stagnate at the top.

Re: Job growth is booming across the U.S. but not in California. Here's why

#14

Post by amluto »

bugglebeetle wrote: post #2

> “The reason why Texas and Florida are doing well and California isn’t, it’s the cost of housing and high taxes,” said Sung Won Sohn, an economist at Loyola Marymount University in Los Angeles. “We have lost a lot of small businesses.” This former is the crux of the problem: California entered into a suicide pact with real estate speculators in the 70s, from which it seems entirely unwilling to extricate itself. It’…

There’s also the cost of utilities (which are entirely out of control in the investor-owned utilities regions in CA, and the CPUC seems to be asleep at the wheel). This obviously drives up the cost of everything else.

And, for small businesses, there are the frankly rather silly taxes on small businesses. Want to be a small business doing business in the Great State of California? You will pay $800/year (minimum) for the privilege. Does the state get any value whatsoever from this?

Want to employ anyone? Prepare for a whole pile of taxes, each of which is small, but you need to do an utterly absurd amount of paperwork.

Would it kill the state of California to let a business employ someone and fill out one form and pay one tax?

Re: Job growth is booming across the U.S. but not in California. Here's why

#15

Post by [deleted] »

api wrote: post #11
ramesh31 wrote: post #7

California is full, plain and simple. The people who live there and control the land have decided so, both implicitly and explicitly.

I realized after a while of living there that California is run as a real estate cartel. Land owners who bought when the state was cheap own it, and everyone who bought later is beholden and locked in with golden handcuffs to the high price environment they created. I call it a cartel because the scarcity is 100% a policy choice. Density is not high, public transit is awful, and there is a ton of land left to develop…

[deleted]

Re: Job growth is booming across the U.S. but not in California. Here's why

#17

Post by readyman »

unquietwiki wrote: post #10

Living in SoCal still offers distinct advantages in terms of civil rights, a social safety net, and access to a vast number of small and large businesses (for both work and services). The entry-level job thing is compounded by requirements for degrees and experience that fully expect folks to down-skill to lower-wage roles. One factor that looms large is the gig economy: Uber/Lyft/DoorDash/etc. They've become a lynch…

[flagged]

Re: Job growth is booming across the U.S. but not in California. Here's why

#18

Post by jjtheblunt »

7thaccount wrote: post #3
bugglebeetle wrote: post #2

> “The reason why Texas and Florida are doing well and California isn’t, it’s the cost of housing and high taxes,” said Sung Won Sohn, an economist at Loyola Marymount University in Los Angeles. “We have lost a lot of small businesses.” This former is the crux of the problem: California entered into a suicide pact with real estate speculators in the 70s, from which it seems entirely unwilling to extricate itself. It’…

I've had several offers to work in startups in California that don't do remote. Instead of just saying no outright I ask the HR person where the office is or look it up. It's usually near Silicon Valley and I have to explain that they'd have to pay me CEO pay to make up for the increase in living/home expenses. I mean...$1.5M to get a home similar to what I paid $150k for not that long ago is hard to justify.

Yep.

I had for years a fantastic job in one of the inner engineering groups at Apple, loved it, loved the coworkers, the culture, and earned and saved very well, which is the point in mentioning this. but I quit to move far away eventually because I obstinately refused to pay exorbitant real estate prices to get a non shitty home.

Sadly I could understand how folks from outside the US have less perspective on what a shitty ripoff it is, but if you're from a well off suburbia in different parts of the US, it was clearly nonsense to buy there.

Re: Job growth is booming across the U.S. but not in California. Here's why

#19

Post by nostrademons »

api wrote: post #11
ramesh31 wrote: post #7

California is full, plain and simple. The people who live there and control the land have decided so, both implicitly and explicitly.

I realized after a while of living there that California is run as a real estate cartel. Land owners who bought when the state was cheap own it, and everyone who bought later is beholden and locked in with golden handcuffs to the high price environment they created. I call it a cartel because the scarcity is 100% a policy choice. Density is not high, public transit is awful, and there is a ton of land left to develop…

It's interesting to trace the impact that Prop 13 has had on further policy choices and subsequent culture.

Prop 13 caps property taxes at 1% and also limits the increase in assessed value to 2%/year. In a region where housing prices appreciate by ~7%/year and that filters down into the basic cost of living for most municipal workers, this makes it impossible for local municipalities to balance their budgets without a steady influx of new buyers. The only way they can bring their tax basis up is to ensure that new homeowners buy in at ever-increasing prices, so that the tax basis can be reassessed upwards on purchase and the new homeowners can subsidize old homeowners who are paying well below market rates on taxes. Local municipalities in turn control planning and zoning, and so they pass zoning codes and approve projects on the basis of what will increase assessed values and hence tax revenue the most. This further exacerbates the housing shortage, raising inflation and increasing the need for ever-increasing home values even more.

Basically CA voters enshrined a pyramid scheme into the state constitution in 1978, and it's filtered down into every aspect of the state's economy by now.

Re: Job growth is booming across the U.S. but not in California. Here's why

#20

Post by whatshisface »

unquietwiki wrote: post #10

Living in SoCal still offers distinct advantages in terms of civil rights, a social safety net, and access to a vast number of small and large businesses (for both work and services). The entry-level job thing is compounded by requirements for degrees and experience that fully expect folks to down-skill to lower-wage roles. One factor that looms large is the gig economy: Uber/Lyft/DoorDash/etc. They've become a lynch…

Not being beaten up by police is part of your rights, but freely deciding how you want to work with someone else, and not being forced into the gig economy, is a right too. Every state seems to have certain coalitions with way too much power, and in California it's exercised whenever well-established interests can rephrase something that benefits them in economically leftist language: "Let's all raise the wages of pizza delivery drivers (who work directly for managers who aren't using us as a minimum-wage-circumventing middle-man.)"

See also: "Supply and demand is a capitalist hoax, let's ban the construction of houses other than the ones I'm renting out."

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