Seven Of Top Ten Most Expensive Cities In US Are In California

San Francisco requires a whopping $339,123 a year for a family of four to live comfortably

Financial tech company Smart Asset just released a new study of the most expensive cities in the United States to live in comfortably, with seven of the top ten located in California.

Previous studies have shown a similarly high number of cities in California among the most expensive to live in in the country. In November, a study by U.S. News and World Report found that San Diego is the most expensive city to live in in 2023, with 12 of the top 20 most expensive cities located within California. However, while previous lists have largely used flat expenses, the Smart Asset survey broke it down between what single people need against what a couple with two children would need to live comfortably.

Click here to SUBSCRIBE to CA Political Review 

While New York came in as the most expensive city to live comfortably, San Jose came in a close second. According to Smart Asset, a single adult would need $65.74 an hour, or $136,739 a year to live comfortably, with a family of four needing $334,547 a year. Irvine and Santa Ana came in third in the country and second overall in California in a tie, with both cities needing an hourly wage of $60.96 for a single person, $126,797 annually for a single person, and $291,450 annually for a family of four.

In addition, San Diego, Chula Vista, San Francisco, and Oakland all made the top ten, with all four requiring between $57 and $59 an hour for a single person.

The other figures varied, with San Francisco requiring a whopping $339,123 a year for a family of four to live comfortably. Cracking the top 20 also saw the inclusion of Anaheim, Long Beach, and Los Angeles. In comparison, the cheapest Californian city, Bakersfield, was only ranked as the 36th cheapest in the country, with an hourly salary of $42.88, or $89,190 yearly, being needed for a single adult, and a family of four needing $218,150 a year.

For the study, Smart Asset used the 50/30/20 methodology. Under the method, 50% of a salary should be allocated to needs, 30% toward wants like entertainment and hobbies, and 20% toward paying off debt, saving or investing.

“This survey is interesting because large states like California, Las Vegas, Texas, Arizona and other Sun Belt states have such a wide degree of costs, ” Marilyn Dorian, a cost of living advisor based in Southern California, told the Globe. “Many large cities in California are still cheaper to live in than cities where many Californians are moving to in other states. Even those with much lower taxes. I mean, that’s Fresno, Bakersfield, Stockton, Sacramento. There’s a reason they’ve gained population.”

Click here to read the full article in California Globe

Pay mandates drive up the cost of living

Your cheeseburger and fries are going to cost more. So is the medical bill for treating the subsequent heartburn.

Two minimum wage bills Gov. Gavin Newsom signed already are digging in, worsening the inflation hitting consumers. The overall state minimum wage will rise from $15.50 an hour to $16 on Jan. 1. But Assembly Bill 1228 increased the minimum wage for fast-food workers even higher, to $20, effective next April 1, for those brands with 60 or more restaurants nationally.

Restaurants already are planning to pass the higher wage on to consumers. BJ’s Restaurant has 59 stores in California and its headquarters are in Huntington Beach. “We expect higher menu prices in restaurants throughout the state as operators look to mitigate the added costs,” CEO Greg Levin announced during an earnings call last week. “We are still finalizing our menu pricing plan for next year, but expect to be able to offset inflationary pressures.”

Senate Bill 525 increased the minimum wage for most healthcare workers to $23 an hour next July 1; $24 on July 1, 2025; and $25 on July 1, 2026. Great for those workers — if they’re not laid off. But the costs will be passed on to patients and taxpayers.

Gov. Newsom’s own Department of Finance just estimated the wage increase would cost the state government alone $4 billion more a year. Half would come from federal funds; but half will receive a transfusion from the state general fund, meaning California taxpayers. That would add $2 billion to the current estimate of a $14 billion deficit for the fiscal year beginning July 1, 2024. The $4 billion estimate does not include costs to private health care offices and systems, which could be much higher.

“Increasing the minimum wage always results in higher prices to the consumers,” Raymond Sfeir told us; he’s the director of the A. Gary Anderson Center for Economic Research at Chapman University. He pointed out the $20 fast food wage won’t apply to brands with 59 or fewer places, giving them an advantage. Companies growing fast will have a strong incentive to not rise above 59. Many firms might not even come here, meaning fewer jobs in the Golden State.

A shortage of healthcare workers was the excuse Newsom made for increasing their wage. But if that’s the case, Sfeir pointed out, why were such workers defined as also including janitors, gardeners, drivers and gift-shop clerks? And how about helping health workers — and all workers — by reducing the cost of living in this state with tax cuts and more housing?

Click here to read the full article in OC Register

Inflation Hits 9.1 Percent, Highest Level in 41 Years

Inflation picked up speed in June, rather than slowing.

Prices were 9.1 percent higher in June than a year before, exceeding expectations and surging to a 41-year high.

Department of Labor data released Wednesday morning showed that inflation picked up speed in June, rather than slowing. Prices rose by 1.3 percent during the month, up from a 1 percent increase in May. A sharp rise in energy prices, and gasoline prices particularly, helped power the annualized inflation rate to its highest levels in more than four decades. Food prices rose by 1 percent during June, and are up 10.4 percent over the past year.

Meanwhile, so-called “core inflation” which filters out the more volatile prices for energy and food, accelerated as well. That category saw a 0.7 percent increase in prices during June, up from 0.6 percent in May.

Wednesday’s topline inflation number came as a surprise—Dow Jones, which publishes expected inflation figures a few days before the official government data is released, expected 8.8 percent rather than 9.1—and might signal that the battle against rising prices will prove even more difficult.

The Federal Reserve raised interest rates by 0.75 percent at its meeting in June and is expected to do the same later this month. Economists polled by Reuters expect that further interest rate increases are on the horizon.

Higher interest rates should help slow inflation by signaling a marginal benefit to saving over spending. Inflation is the result of too many dollars chasing the same pile of goods and services, so higher interest rates make it less attractive to borrow and spend.

But how quickly that strategy will work remains an open question. Larry Summers, the former Obama administration treasury secretary who correctly warned about rising prices last year in the wake of the American Rescue Plan’s passage, believes it will be a persistent problem.

“There are no miracle cures or silver bullets,” Summers told a radio station in Boston last month. “Monetary policy, which what the Fed is doing, belatedly, does work with respect to inflation, but it takes quite a while.”

One potential glimmer of hope is in gasoline prices, which have been falling during July after rising sharply in June and being a major driver of overall inflation for much of the year. The national average today is $4.63 per gallon, according to AAA, down $0.14 from a week ago and $0.38 from this time last month. Falling gas prices might ease prices for other goods too, since they’ll make it less expensive to ship products across the country.

Another positive sign could be the glut of excess goods that retailers say they have to unload in the coming months. After months of pandemic-related supply chain snafus, department stores and other big retailers have piles of goods that they would have liked to sell long ago—which means consumers could be seeing big discounts for certain items, The Wall Street Journal reports.

Politically, however, gas prices well over $4 per gallon and persistently rising prices throughout the rest of the economy continue to be a yoke around President Joe Biden’s neck. Polls show that inflation and prices are Americans’ top concerns.

Click here to read the full article in Reason.org

California’s Cost of Living is Hurting the Middle Class

Middle classThose interests are financing a multi-million-dollar disinformation campaign claiming that the state’s roads and bridges are unsafe because Californians’ taxes were too low.

It would be funny if it wasn’t so expensive.

The reasons that Proposition 6 is so popular — despite the irresponsible and self-serving claims of its opponents – are legion. California already had the fifth-highest gas taxes in the nation, even before the tax hike. Our state income tax rates and state sales tax rate are the nation’s highest. Add to that crushing regulations and counterproductive progressive policies that result in outcomes opposite of that intended and it’s easy to understand why California is suffering from a massive outflow of citizens to other states.

That exodus to Texas, Arizona, Nevada and other states is being driven by a singular powerful force — cost of living. Few Californians are unaware of how expensive it is to live here relative to other states. Despite a rapidly growing national economy, many citizens here still feel left behind, and for good reason. California’s poverty rate is 20.6 percent, the highest in the nation, when the cost of living is taken into account. In a recent poll, 47 percent of Californians considered themselves “working poor.”

In the debate over Proposition 6, opponents understate the impact on the cost of living that results from these tax hikes. A recent study by the California Policy Center exposes just how punishing last year’s tax increases are for middle-class Californians and why they should be repealed.

According to the analysis, the gas tax and car tax hikes will impose on an average two-car family at least $1,500 in taxes a year. When adjusting for the “average” tax rate, a two-car “average” family must earn almost $2,000 in pre-tax earnings just to pay their California car and gas taxes. Obviously, this isn’t chump change.

The news for low-income families is even worse. A typical two-car low-income family may pay $1,800 in taxes a year. Because low-income families are in a lower tax bracket, that two-car low-income family still must earn almost $2,000 in pre-tax earnings just to pay their California car and gas taxes. …

Click here to read the full article from the San Bernardino Sun

Study: Dozens of millionaires fled California after 2012 tax increase

money bagCalifornia lost a very small but statistically significant percentage of high-income residents after voters approved Proposition 30 — the 2012 ballot measure that raised the top state income tax rate to 13.3 percent, the highest in the nation — according to a new working paper from three researchers.

The state lost an estimated 138 high-income individuals, or about 0.04 percent of the roughly 312,000 people subject to the tax increase, said co-author Charles Varner, associate director of the Stanford Center on Poverty and Inequality.

The research comes at a time when more Californians are at least threatening to leave the state because of high taxes and housing costs. The rumblings have escalated since the federal tax law that passed in December capped the previously unlimited federal itemized deduction for state and local taxes at $10,000.

“It remains to be seen what kind of effect (that change) might have, and we will be looking at that as the numbers come in,” said Varner, adding that he expects any effect on migration to be small. …

Click here to read the full article from the San Francisco Chronicle

Raise the Minimum Wage, or Lower the Cost of Living?

Increases to the minimum wage in California are moving closer to reality. As reported on March 30th by MyNewsLA.com, “Los Angeles County Supervisors Sheila Kuehl and Hilda Solis will ask their colleagues to approve spending up to $95,000 to have the Los Angeles Economic Development Corporation review a series of studies of the issue performed in relation to the city of Los Angeles’ proposal to raise the minimum wage to $13.25 an hour by 2017 and to $15.25 an hour by 2019.”

California’s minimum wage is currently $9.00 per hour. The federal minimum wage is currently $7.25 per hour.

Largely lost in the debate over the “fight for fifteen” (dollars per hour) is America’s inflation adjusted minimum wage based on historical precedents. It’s an interesting topic that deserves discussion, because historical minimum wages expressed in 2015 dollars vary a great deal. Since establishing the first federal minimum wage in 1938, the amount has been adjusted 22 times. As can be seen on the chart, between 1938 and 1968 the minimum wage expressed in 2015 dollars rose steadily. In 2015 dollars, for example, the 1938 minimum wage would be $4.13, rising to $11.01 per hour by 1968. Since then, it has been in decline – in 2015 dollars the minimum wage was roughly between $9.00 and $10.00 per hour during the 1970’s, then fell to roughly between $7.00 and $8.00 from 1980 through 2009, when it was last adjusted.

Historical Minimum Wages
Expressed in 2015 Dollars
20150331-UW_Ring-MinimumWage

Those who believe in minimum wage laws can draw many conclusions from this data. What they cannot easily conclude, however, is that the minimum wage, today, can rise much beyond $10.00 per hour and still conform to historical norms. Only twice, in 1968 and 1974, did the inflation adjusted minimum wage exceed $10.00 per hour.

From this perspective, California’s state minimum wage, $9.00 per hour, finds itself placed almost exactly at the median in terms of historical federal minimum wage levels expressed in 2015 dollars. From what should be a reasonably compelling economic standpoint, there is no urgent reason to increase the minimum wage above $9.00 per hour, even for those who are solidly in favor of having minimum wage laws. While one may argue that California has a higher cost of living than most other places in the United States, justifying a minimum wage higher than the historical median, one might also acknowledge that many of the benefits offered minimum wage earners today were not available until relatively recently. Examples include the earned income tax credit, not established until 1975, and the steep discount on health premiums offered under Obamacare.

It rises perhaps to the level of overkill to join the libertarian chorus extolling the virtues of an utterly unregulated wage market. Also well documented are the many ulterior motives for labor unions to lead the charge for a higher minimum wage – it gives them powerful political rhetoric to address millions of low income workers not represented by a union, and, more pragmatically, a higher minimum wage rewards union members directly whenever – as is frequently the case – their wage scales are pegged a fixed level above the prevailing minimum wage.

Two observations potentially underrepresented in this debate, however, do deserve mention. First, the fact that unions are attempting to fight for workers in low paying, competitive industries, is at least consistent with the illustrious aspects of their legacy. Unlike unions representing government professionals who perform high paying jobs for monopolistic, taxpayer funded agencies, at least the unions fighting for minimum wage workers are fighting for the little guy. If they might abandon their commitment to flood the United States with unskilled immigrants who drive down wages and threaten the solvency of social welfare programs, and if their labor agreements didn’t peg their own wage scales to float upwards as the minimum wage rises, one could almost believe in their sincerity.

The other fact is more challenging and obscure, yet ought to merit a central place in the debate over economic justice. That is the fact that California’s cost-of-living is the highest in the nation. In California’s coastal cities, the cost of housing is prohibitive; the costs for energy, water, and transportation are punishingly high. For middle class residents, the cost of health insurance is punishing as well. And it doesn’t have to be that way. Competitive resource development – free of extremist environmental hindrances, other regulatory roadblocks, costly project labor agreements and union work rules – would lower the cost of living at the same time as creating millions of new jobs. It could usher in a new golden age for California’s working class.

Those unions who fight for a higher minimum wage might consider fighting to lower the cost-of-living instead. But to do so, they will have to break ranks with the public sector unions, who hide behind oppressive environmentalist restrictions, because they know full well that infrastructure development will come at the cost of their own exorbitant compensation.

Ed Ring is the executive director of the California Policy Center.