Uhaul Indicator of California Health
In today's Opinion Journal, the WSJ editorializes against the proposal to even further raise marginal income tax rates in California, to the highest in the country save in New York City. The Journal argues that this is chasing productive, high income people out of California:
The
latest Census Bureau data indicate that, in 2005, 239,416 more
native-born Americans left the state than moved in. California is also
on pace to lose domestic population (not counting immigrants) this
year. The outmigration is such that the cost to rent a U-Haul trailer
to move from Los Angeles to Boise, Idaho, is $2,090--or some eight
times more than the cost of moving in the opposite direction.
I had seen this Uhaul metric before. The logic is that Uhaul has to keep its fleet of trucks and trailers balanced. If everyone is going one way with them, say from California to Utah, then they are going to end up with an enormous yard full of vehicles in Utah unless they 1) pay to backhaul the trucks to CA empty, which is really expensive, or 2) increase the price of the route to Utah and decrease the price of the route back until they are in balance or until the price of the preferred direction covers the backhaul costs.
I had never tried this myself. I always wondered if the examples people use in articles like this are hand-selected or representative. So I tried, at random, LA to Salt Lake City (I have Utah on the brain, I guess, because we are going skiing up there next week, woohoo!) and chose a date far enough in the future I didn't run into any random demand peaks. A one-way 26-foot truck rental from LA to SLC on May 15 was quoted at $1888. The same truck from SLC to LA was quoted at $299! Try it yourself.
Frequent readers of my blog know I am a big supporter of open immigration, but it cannot be a good thing to send a quarter of a million of your best educated and most productive people out every year and backfill them with lower-skilled, under-educated immigrants.
Dave Schuler:
Unwillingness to manage immigration paired with unwillingness to live with “lower-skilled under-educated immigrants” is cognitive dissonance.
February 28, 2006, 12:04 pmSilentclaw:
I would suggest that some of this may be the higher cost of operating in LA; the cost of living there is quite high, as is the cost of land to run a Uhaul store on. Because the cost of living is high, the people moving could also have more money to spend, especially if they just sold a house in LA and are buying in Idaho.
Part of what's going on here may also be people moving away from an overpriced portion of the country, and moving to places where they can afford to live. Most of California is expensive enough that people will be inclined to move elsewhere, especially for retirement
February 28, 2006, 12:05 pmnick:
I picked southern california to dallas, texas, and ended up with $1980 to dallas, and $425 from dallas.
To compare in a city relatively the same cost of living index according to infoplease, it costs $1,559 from Chicago to here and $2,303 from here to Chicago to rent a u-haul.
February 28, 2006, 2:57 pmDan Lyke:
In 1995 I moved from Chattanooga Tennessee to the San Francisco Bay Area. If I remember right, at that time there was a similar imbalance in prices, I think it cost us less than a thousand to rent the truck out here, and would have cost us over two to go the other way. In the meantime, the population here has soared.
So there's something else at work.
March 1, 2006, 9:29 amPaul:
"Frequent readers of my blog know I am a big supporter of open immigration, but it cannot be a good thing to send a quarter of a million of your best educated and most productive people out every year and backfill them with lower-skilled, under-educated immigrants."
Keep in mind this is not a function of open borders, but a function of tax rates. If tax rates are lower, those who pay taxes are less likely to leave.
Further, it could very well be a good thing to replace high skilled high wage workers with low skilled low wage workers. It's just not good for government coffers.
March 1, 2006, 10:13 amTeri Pittman:
I saw the same thing when we left CA in the early 70s. And, since I do phone support, I talk to a number of folks who admit to having left the state recently. It's too expensive and in some areas, too dangerous.
March 1, 2006, 7:44 pmGlen Raphael:
Are you sure it can't it be a good thing? Why not? If one group of people think they can improve their quality of life by moving from California to Utah and another group think they can improve their quality of life by moving from Mexico to California, why isn't it good to let them do that? I can't think of a reason to believe the moves won't leave both them and us better off on net.
March 2, 2006, 6:43 pmTurbodawg:
Renting trucks is like buying an airline ticket. I used to work for Penske and it is the same thing. Uhaul is crap BTW. Check out the Penske rates from the NE to FLA. Very high. Cheap out of FLA. Everyone wants to move from the NE to FLA. It is basic supply and demand. Rates in May and June are high becuase everyone wants to move then. If you rent a local truck at the end of the month you will pay a lot more than during the middle of the month or week day. Again, supply and demand.
March 7, 2006, 2:51 pmapartment hunter:
so it seems to me that it costs more to get out from CA than to get in there! :) i see some politics here:))
March 30, 2006, 3:18 amDon:
This is a good presentation of how pricing is influenced by supply and demand. I read this article http://www.soyouwanna.com/site/syws/planetix/planetix.html on how airlines adjust prices regularly so they can maximize profits but did not realize that moving truck rental companies did that as well. I gather that the California tax situation works very similar.
Last night there was a program on cable where residents of Michigan were being asked about their thoughts on sending water from Lake Michigan to California. I guess the residents will have to pay for this somehow.
June 8, 2006, 7:11 am