Warnings about Nevada turning into “California East” sends chills down the spines of Republicans, conservatives and libertarians.
Such warnings, however, have been received with nothing more than a collective shrug by the current majority in Carson City. After all, what’s so bad about California? Our western neighbor is the 5th largest economy in the world, some of the wealthiest individuals in America live along its coast and it is home to the all-important American technology industry—the most dynamic industry in the modern economy. And that’s not to mention the beautiful beaches, the abundant natural resources, and the cultural history that makes it home to another dynamic and bustling industry: Entertainment.
It almost seems like Nevada should be clamoring to emulate the Golden State, right? Unfortunately, there’s more to Nevada’s western neighbor than its natural resources and local industries.
California currently has the highest homeless rate in the nation, government unions are so politically powerful that local budgets are busting at the seams, and lawmakers in Sacramento have been so overzealous to regulate and tax businesses that they have even driven the recreational marijuana industry back underground.
Most telling, however, is the fact that California has seen 15 consecutive years of negative domestic migration—meaning more people have been fleeing the state than moving there. Generally speaking, states that are run well, with economically and socially sound policies, don’t see a mass exodus of residents year after year.
The fact that, despite all its natural beauty and economic advantages, Californians are deciding to become Nevadans, Texans and Coloradoans instead, should tell you most of what you need to know: The economic climate in the state isn’t as sunny as the Bay Area’s beaches.
In short, California is in trouble. Residents packing up their belongings and fleeing the state makes sense. The cost of living is so high, even young professionals making six-figure salaries are hard pressed to make ends meet.
It’s been a trend for many decades, and each attempt by California lawmakers to “fix” the state’s skyrocketing price of living has resulted in a growing gap between the state’s “haves” and “have nots.”
San Francisco, for example, recently attempted to make it illegal for businesses to provide their workers with free lunches—ostensibly in an attempt to increase foot traffic for local restaurants that were struggling after the passage of minimum wage hikes. Of course, in practice, the policy was nothing more than another daily expense for tech workers who are already struggling to afford life in The City by the Bay.
Beyond the nannystate micromanaging of the economy, the state has a fundamental problem with ballooning budgets. Former Governor Jerry Brown’s boondoggled high-speed rail is a recent example of the state’s runaway spending—but it’s certainly not the only one.
Government sector unions have so dominated the political process in California, driving spending to ever-higher levels, that many local governments have tinkered on the brink of bankruptcy for years. The recent Los Angeles teacher strike, for example, put the school district more than $540 million in the red. The spending, taxing and regulatory environment in California has resulted in more than a decade of shrinking populations throughout the state—with roughly 40,000 of those fleeing ending up in Nevada each year.
Given the policies being proposed in Nevada’s 2019 legislative session, perhaps critics are right to be worried about becoming “California East.” After all, the political makeup in Nevada’s legislature looks like it would be quite at home in Sacramento.
Already there has been talk about statewide rent control—the same type of policy that actually lowered housing availability in San Francisco, further driving up the cost of new rentals in the nation’s most expensive rental market. A hike in the minimum wage has long been a top priority for Nevada Democrats—a policy that is already disproportionately hurting low-income workers and the service industry throughout California. Collective bargaining for state workers—another top priority for Nevada’s political leaders—would grant public-sector unions the same kind of power over future legislatures as they have had in California for decades.
When folks warn about Nevada turning into California, they aren’t expressing concern over beautiful weather or a robust technology sector. They’re expressing concern over the policies that are leading 6 million citizens to flee such a naturally gorgeous state.