Cash out. Leave the Golden State for somewhere more affordable, less crowded and probably less cool. Sure, you lose the beaches, hiking, cuisine and culture. On the other hand, you gain cheaper living, the chance to save money and make your paycheck — or 401(k) — go further.

Decades of rising costs have prompted many to make this choice. But does it really pay off the way they expect?

New data from UC Berkeley strongly suggest that for people who moved out of the Golden State, taking part in the California exodus can bring dramatically improved financial conditions.

The researchers studied the finances of people who left California over the last decade to see how well they did in their new communities. The California Policy Lab research covered people who left or arrived in California from 2016 to 2025 — millions in total. They generally left for nearby states such as Nevada and Arizona but also for hot locales such as Texas and Florida.

Among the findings:

• People who left the state found that the move saved them almost $700 in monthly housing costs.
• They became 48% more likely to own a home in their new state compared with California, where housing prices are notoriously high.

Although the research covered all types of people who left the state, the differences were most notable for those who were struggling with affordability in California.

One surprise from the California Policy Lab’s findings: Those leaving the state are increasingly moving out of its wealthiest areas. The share of Californians departing the state from its top-third median-income areas rose by 6.4 percentage points between 2016 and 2025, while the shares from low- and middle-income neighborhoods dropped.

In other words, the pandemic caused a major shift in the type of person who leaves California, with residents of higher-income areas growing.

“The average exiter now leaves from a neighborhood that is 8.7% more affluent than in the pre-pandemic period,” the report stated.

Evan White, a California Policy Lab co-founder and author of the report, said he wasn’t exactly sure what caused the trend. But he noted that tech workers in upscale Bay Area districts who can work remotely might find more affordability elsewhere. Another possibility is that lower-income residents “can’t keep up with the Joneses and aren’t able to attain the type of lifestyle they want to have,” causing them to look elsewhere, he said.

The price of a basket of typical goods and services in California from 2016 to 2025 is up about 38%, according to the California Department of Industrial Relations. Median home sale prices went up around 75% over the same span, per the state Employment Development Department.

Indeed, the data suggest that those leaving California are in significantly worse financial shape than their neighbors who stay. Those who left had $5,500 more (twice as much) student debt on average than their neighbors and 16% higher rates of credit card utilization.

The data, compiled over 10 years, are an indication of the affordability gap across California.

But it is far from a full demographic snapshot. Some of those who left California have returned, saying they missed the lifestyle and nature. California has bounced back from the pandemic, with populations rising again in big cities. Even some critics have noticed a new boom in San Francisco, hit hard by COVID-19 but now enjoying a rebound thanks to the artificial intelligence gold rush.

While the entertainment industry has seen significant retraction in Southern California, the tech sector in Northern California has generally remained strong.

Dowell Myers, a professor of policy, planning and demography at USC who was not involved in the research, said the Berkeley data reinforce the affordability challenges California faces, especially when it comes to housing.

The nearly $700 a month in lower housing costs is less than adequate compensation for those who leave the state, he argued, adding that many people leave because they have no other choice.

“It’s a really sad story,” he said.

As for young professionals who come to work in the Golden State, “we can’t hold them, that’s the lesson,” he said. “They come for opportunities, but housing is really key.”

The chart above shows the average monthly housing expenses for three separate groups between 2016 and 2025: those who moved from other states to California, those who moved within the Golden State, and those who left California for other states.

Before leaving California, those who left paid on average $2,376 in monthly housing costs. After relocating to another state, former Californians spent just $1,705 per month, a drop of $671. Those who moved from other states to California saw the opposite effect, with costs rising a similar amount.

“Pretty much anywhere else is more affordable than California,” said White, the author of the report. “People were going to dramatically less expensive locations.

“Once we learned that,” he said, “it didn’t surprise me that they then became homeowners at higher rates.” What was surprising, however, was the magnitude of the change, White said.

White said he undertook the research to contextualize the shift in population over the last few years “because people care what’s happening with their friends and neighbors,” he said. “They don’t want to be the last one at the party” as others leave.

Still, the state’s outlook remains bright, White said. California continues to mint millionaires, “so there are good reasons to stay and good reasons to come here” besides the obvious attractions such as lifestyle and weather, he said.

White, who was born in Altadena, now calls the Bay Area home. He’s a homeowner, but if he weren’t, he might consider leaving the Golden State because of high costs: “Sure, I could see that influencing me.”

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My trusty spreadsheet looked at the first Consumer Price Index report in two months to see how the cost of living behaved during the federal government’s historic shutdown, both nationally and across three local regions.

The overall U.S. inflation annual rate was 2.7% in November, down from 3% in September. However, progress is modest.

The last time U.S. inflation, as measured by CPI math, was below 2.7% was in May. And November was equal to the 2.7% rate in November 2024. That’s when Donald Trump won his second White House term and promised to quickly fix the nation’s cost-of-living woes.

It’s a different price picture across Southern California.

The Inland Empire posted the region’s fastest inflation rate of 4.5% in November, the highest since September 2023. This was up from 3.6% in September and 1.1% a year earlier.

San Diego County’s inflation rate rose to 4%, the highest since November 2023, up from 3.9% in September and 2.6% a year earlier.

And in Los Angeles and Orange counties, the 3.6% inflation rate was the highest since May 2024. It was 3.5% in September and 3.2% a year earlier.

Ponder some key consumer spending categories within the CPI to get hints at the gaps.

Cooling rents

Price hikes from landlords moderated nationally and in most local regions, as measured by the CPI.

U.S. rents rose at a 3% annual rate in November vs. 3.4% September and 4.4% a year earlier.

L.A.-Orange County rent grew at a 3.4% annual rate in November, off from 3.6% in September and 4.5% a year earlier.

San Diego rents grew 3.9% year over year in November, down from 4% in September and 4.7% a year earlier.

Yet in the Inland Empire, renters paid 5% more in a year in November – down from 5.6% in September but double 2.5% a year earlier.

Goosed by groceries

Costs at the supermarket were mixed.

Nationally, food-at-home prices rose at a 1.9% annual rate in November vs. 2.7% September and 1.6% a year earlier.

L.A.-Orange County’s grocery inflation ran 2.3% in November, down from 2.8% September but faster than the 2% a year earlier.

In the Inland Empire, groceries were 1.1% pricier for November, slower than 1.3% inflation for September – but a reversal from a 0.1% drop a year earlier.

And in San Diego, grocery prices dropped 0.1% in November. That’s an improvement from a 2% gain for September and a 2.4% increase a year earlier.

Pump pain

Last year’s dip in gas prices is a memory – but that pain is greater locally.

Nationally, unleaded regular prices rose at a 0.7% annual rate in November, up from an 8% decline a year earlier.

L.A.-Orange County pumps were priced 8% higher in the year ended in November, erasing much of the 13% drop a year earlier.

In both San Diego and the Inland Empire, unleaded was 7% more expensive in November than a year earlier, down from a 12% drop a year earlier.

Pruned pay hikes

Local inflation hurts even more as raises shrink.

One yardstick of wages and salaries in Los Angeles, Orange, Riverside, San Bernardino and Ventura counties showed compensation growing at a 3.4% annual rate in the third quarter, down from 4.8% in 2024.

Nationally, the Employment Cost Index showed raises slowing to a 3.6% annual rate from 3.8% in the third quarter of 2024.

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In honor of Labor Day, my trusty spreadsheet delved into some curious federal statistics that track the pay ladder, so to speak, across the 50 states. The latest edition of the report tracks pay for key segments of the workforce in May 2024.

The figures reveal a key pay boost that enables many Californians to afford a costly lifestyle. Yet that same cash flow also inflates the price of many California goods and services – most notably, housing.

Let me explain, starting with the annual pay for the typical worker using the median wage. That’s the midpoint between what the top-paid workers earn and the half who earn less.

California ranked No. 9 among the states at $56,900. That’s 18% above the 50-state median of $48,400. That’s not very impressive pay, considering the Golden State’s expensive living.

Top pay? Massachusetts at $62,300, Washington state at $61,600, and Alaska at $59,400. Lowest? Mississippi at $39,100, Arkansas at $41,000, and West Virginia at $43,300.

Additionally, California’s economic rival, Texas, ranked No. 30 at $47,500. Another competitor, Florida, ranked No. 35 at $46,900.

The upper half

To have a shot at personal economic viability in the Golden State, your paycheck could be in the ballpark of what statisticians call the “75th percentile” – or the median of the top half of wages.

California’s 75th-percentile income of $96,300 was 29% higher than the nation’s $74,400 and ranked No. 4 among the 50 states.

Where are the biggest paychecks for this pay grade? Massachusetts at $99,900, Washington state at $99,500, and New York at $96,400. Lowest? Mississippi at $58,900, Arkansas at $60,400, and South Dakota at $62,100.

Texas ranked 23rd at $75,600. Florida was No. 28, at $73,300.

Secret sauce

Focus on the gap between the median wage and the loftier 75th percentile.

Think of this spread as the premium pay given to high-skill jobs, highly coveted industries, or top-performing workers. It’s the secret sauce to balance the cost of living for numerous Californians.

This pay bump for California workers – the gap between the median ($56,900) and the 75th percentile ($96,300) – amounts to a 69% bonus. That’s the largest among the states and easily surpassed the 54% bump across all 50 states.

Just behind California were Maryland, New York and New Jersey, all with premium pay at 65%. The smallest gaps were in South Dakota at 36%, followed by Iowa and Kentucky at 40%.

Texas ranked 10th-biggest at 59%. Florida was No. 17 at 56%.

Mixed message

You can cheer California’s premium pay as one measurement of the state’s economic opportunity.

At the same time, it serves as an example of how income inequality makes California a challenging place for many people to thrive.

Ponder how this wage gap creates pricing pressures. Think about the size of a mortgage a worker could theoretically obtain.

For example, the median-wage worker in California who’d spend 30% of their salary on a house payment with a 6.5% mortgage rate could borrow $223,000. However, a 75-percentile paycheck gets a Californian a $377,000 loan.

Yes, both wage levels fall short of what’s needed for the common home purchase. In early 2024, the median-priced single-family home in the Golden State cost $814,000, according to the California Association of Realtors. The typical condo ran $655,000.

Well, is it any surprise that the Realtors’ “affordability” math showed just 17% of all California households could qualify to buy a single-family house? And only 24% for condos?

These gaps help explain why two-income families are the norm in California – with 1.34 jobs per household, the fifth-highest among states. Housing statewide is also densely populated, with 2.95 people per household, ranking No. 4 nationally.

Additionally, the wage gap is behind the choice of many individuals to live in inland areas or outside major job hubs. That’s where the cost of living, especially housing, can be slightly less stressful.

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California’s Fast Food Council, comprised of fast-food workers, restaurant owners and state officials, approved a motion Wednesday to consider a cost-of-living-adjustment at an upcoming meeting.

The Council’s next meeting, expected to take place in April or May, will be for further discussion and not see a vote taken on a decision about it.

Before the vote, the Council heard scores of public comments.

Business owners said not enough time has passed since the $20 minimum wage went into effect to study the effects, which they say has already led to higher consumer prices and less jobs for workers.

Workers and labor advocates said the increase was needed to address rising costs of living in one of the country’s most expensive states to live.

Veronica Gonzales, a fast-food worker, spoke remotely from a room full of workers organized under the California Fast Food Workers Union’s San Jose chapter. Through a translator, she said in Spanish that the cost of her rent and her medicine has gone up.

“I cannot live with this wage,” she said.

The possibility of a wage increase, which would be the first for the Council since the state created it last year alongside the $20 fast-food minimum wage, has become a flashpoint in a growing debate about California’s unique effort to regulate the fast-food industry.

California is home to more than half a million fast-food workers, more than any other U.S. state.

California’s law empowers the Council to regulate fast-food restaurants that are part of chains with more than 60 locations nationwide, including wage increases every year of either 3.5% or the increase in the consumer price index, whichever is smaller.

When the California legislature first approved a fast-food-specific minimum wage in 2022, McDonald’s USA President Joe Erlinger objected to what he called in a letter on its website “lopsided” legislation.

A McDonald’s spokeswoman said that Erlinger’s letter was clear that he “welcomes legislation that increases wages for all workers, as long as it is done thoughtfully and fairly.”

In the letter, Erlinger said the legislation would impose “higher costs on one type of restaurant” — those franchisees that are part of a large national chain– “while sparing another” — independent restaurants and franchisees of smaller chains as well as certain restaurants that bake bread.

Erlinger also said the bill “should raise alarm bells across the country” because it had the potential to influence other states into making similar laws.

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Satyasai’s Pacific Gas and Electric bill jumped by about $100 compared to the same month last year. Like many of PG&E’s 5.5 million customers, she’s having to rescript her monthly budget around these rising costs. 

“Everyone is getting squeezed,” Satyasai said. 

Propelled in large part by PG&E, which hiked residential electricity rates by 20% for about 16 million Californians in January, the state high electricity prices are second only to Hawaii, which is always an expensive outlier because of the costs of shipping oil to the far-flung archipelago.

A pack of New England states have historically had some of the nation’s highest electricity prices (the federal government doesn’t track rates but rather calculates prices using customer counts, sales and revenue data) due to factors like a shortage in natural gas pipeline capacity plus the region’s reliance on costly fossil fuels to generate electricity. 

But California has joined them in the last ten years, leapfrogging with Rhode Island, Connecticut, Massachusetts and New Hampshire to periodically hold the title as the most expensive state for electricity usage in the lower 48. (Even though Californians pay a high amount for each unit of electricity, their total bills tend to be lower than other states in the Northeast and South due to the West Coast’s relatively temperate climate.)

East Coast residents are paying higher prices during cold winter months with Californians paying higher electricity prices for a brief period nearly every summer since 2014, likely when people must cool their homes during heatwaves. 

It is unusual for Californians to pay higher prices than the East Coast in the depth of winter. This year alone, typical Northern and Central California households (which use about 500 kilowatt-hours of electricity each month) will pay over $400 more annually on their PG&E bill.  

PG&E currently charges the most for electricity among California’s three investor-owned utilities with an average residential rate of $0.397 per kilowatt hour. The company’s residential electricity rates have risen more dramatically than the other utilities, jumping 128% over the last decade. 

San Diego Gas and Electric’s average residential electricity rate is $0.383 per kilowatt hour and Southern California Edison’s rate is $0.338. 

PG&E has vowed to keep future rate increases between 2% and 4% annually, and said January’s dramatic hike was partly due to the slow pace of state approvals that compressed two years of rate hikes into one. 

PG&E chief executive officer Patti Poppe last week told investors during a quarterly earnings call that the company is taking dramatic steps to increase efficiency and lower costs. In an interview with the Chronicle, Poppe said the focus on lowering operational costs is new for the company and one that she hopes will show up in lower bills in the future. 

“The work we’re doing is really necessary,” Poppe said. 

Robert McCullough, an Oregon-based energy consultant who has studied California’s utility markets, said California’s historically high electricity prices can in part be tied to complicated factors like the state’s deregulation of the energy industry in the 1990s. 

But McCullough blamed January’s sticker shock hitting PG&E customers this year on the company’s deferred maintenance of its aging electric grid.

The company attributes about 85% of January’s rate increase to covering the costs to modernize, upgrade and strengthen its aging electric and natural gas infrastructure at a time when climate change has made the state increasingly vulnerable to storms and wildfires. 

“Pacific Gas and Electric fell behind on its maintenance and even without global warming that would have been a big bill,” McCullough said. 

And PG&E’s rates are set to be eclipsed by San Diego Gas and Electric before the end of 2024. The San Diego utility has temporarily dropped rates to compensate customers after previously  charging too much, according to the Public Advocate’s Office of the California Public Utilities Commission. 

Californians’ utility bills could also be impacted by a controversial proposed monthly fixed charge of about $24. 

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