April 8, 2013

Californians Stifled By Lack of Freedoms

William Ruger

Assistant Professor of Political Science, Texas State University - San Marcos

Jason Sorens

Senior Affiliated Scholar

If you’re finding it harder and harder to live in California, you’re not alone.

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If you’re finding it harder and harder to live in California, you’re not alone.

California’s beautiful Pacific coastline and beaches were not enough to keep 1.5 million California residents from fleeing the state between 2000 and 2010. That amounts to over 4 percent of the state’s 2000 population. To make matters worse, Californians saw their real personal income shrink by 0.4 percent from 2000 to 2007 – before the Great Recession wreaked its damage. Only the state of Michigan beats that record.

Meanwhile, Arizona saw 700,000 people move in from other states – 13.9 percent of its 2000 population.

In our new book, “Freedom in the 50 States,” we look at a wide array of numbers and policies from across the country, and find that California ranks 49th in the nation on overall freedom – behind only New York – while Arizona ranks 11th.

California’s biggest problem is business regulation, on which it ranks dead last. As most residents know, the state has some of the strictest local zoning regulations in the country, which reduce the housing supply and drive up home prices.

By contrast, Arizona has the nation’s most robust “regulatory taking” law, requiring state and local governments to compensate property owners for new regulations that diminish the value of their properties.

By our measure, California also has the most expensive labor laws in the country: not only a high minimum wage and no “right-to-work” law, but costly workers’ compensation, short-term disability and family leave mandates.

Even if you go into business for yourself, California regulates you much more than other states would. The state requires licenses for tree trimmers, cabinetmakers, animal trainers and many other professions, and places stricter than average educational and examination requirements on them. These rules reduce competition and drive up the prices customers pay for a whole host of services.

Every year, the U.S. Chamber of Commerce surveys business owners and managers about the quality of each state’s court system in dealing with lawsuits. California’s legal environment routinely ranks among the worst in the nation, which in turn makes liability insurance there more costly. California’s poor tort system costs businesses and consumers around $10 billion per year.

The superior business climate and personal freedoms in states like Arizona, Nevada, and Idaho allow them to grow at California’s expense.

Some freedoms mean more to people than others, of course, and if you can’t find a good job in a state, you might not care how free it is by anyone’s standards. But we’ve considered a range of social and personal freedoms, including the right to consume alcohol and tobacco, to bear arms, to home school your children and to be free from arbitrary search and seizure.

While California does well on marijuana policies and same-sex civil unions, it nonetheless lands near the bottom on overall personal freedoms. California’s high incarceration rate, tight gun laws, trans fat ban, cigarette taxes and regulations on drivers all help drive down its personal freedom score in our index.

After studying the complicated effects of more than 200 distinct public policies, we reached one simple conclusion: The more a state denies people their freedoms, increases their taxes, or passes laws that make it hard for businesses to hire and fire, the more likely they are to leave.

And while there’s clearly more to life than eating trans fats or riding a motorcycle without a helmet, the states that won’t allow you to often cause trouble for their residents in other ways.

Where legislators try to protect citizens from their own choices, it’s no great surprise that they also see fewer limitations on their power in other areas.

That costs Californians billions of dollars a year, makes their lives harder, and encourages more and more of them to move somewhere else.