Stampede to Leave Forced-Dues California Spikes Moving Costs

People abandoning  LA  pay a “huge premium” for U-Haul trucks “leaving California” (the largest-population state without Right to Work protections for employees) “for Texas” (the largest-population Right to Work state).  On the flip-side, should Texans want to go West, there is a “huge discount for trucks leaving Texas for California,” according to American Enterprise Institute scholar and University of Michigan-Flint professor Mark Perry’s recent post in his Carpe Diem blog. (The chart created by Dr. Perry for the post is reproduced below.)

As of the beginning of June, a person hoping to move from Los Angeles to Houston would have to pay nearly $4,000 to rent a 26-foot U-Haul truck for the one-way trip.  However, a person seeking to move from Houston to LA could rent an identical moving truck from the same company for less than $1,000!  Would-be movers from San Francisco to Dallas or Houston have similarly high U-Haul premiums.

Why the huge disparity?  A huge differential in what economists call “relative demand.”  Perry’s analysis indicates that people are far more apt to want to move out of non-Right To Work California than they are to want to move in.  The opposite is the case for Right to Work Texas.  Consequently, more moving trucks are coming to Texas than leaving, and more trucks are leaving California than coming into the state.  This creates a regional imbalance in truck inventories, which U-Haul tries to even out through dynamic, market-based pricing and incentives.

A broader analysis of U-Haul rental pricing data published this April by John Burns Real Estate Consulting (JBREC), a California-based company that operates across the country, looks at average premium/discounts for taking a 20-foot U-Haul truck to a city relative to returning the same truck in 32 different major U.S. metropolitan areas.

According to JBREC’s data, the 10 metropolitan areas with the strongest current “in-migration demand” (Atlanta, Austin, Jacksonville, San Antonio, Houston, Dallas, Raleigh, Charlotte, Tampa and Nashville) are located in Right to Work states. Meanwhile, the 10 metropolitan areas with the highest “out-migration” demand (New York City, San Francisco, San Jose, the Oakland-Berkeley East Bay, Sacramento, Riverside-San Bernardino, Orange County, Calif., Los Angeles, San Diego and Chicago) are all in forced-unionism states.

Who is moving out of forced-unionism states like New York, California and Illinois?  Multi-year, age-segregated U.S. Census Bureau population data for the 50 states show that, while there is substantial net migration of people of all ages from states where the Right to Work isn’t protected to states where it is, Americans in their peak-earning years (aged 35-54) are significantly more apt to flee from Big Labor misrule than are Americans aged 65 and over, who are typically retired.

Over the past decade for which data are available, non-Right to Work states saw their peak bread winning-aged populations fall at a 70% faster rate than the national average.  (Peak-earning years population fell nationwide on average by 4.3% from 2007 to 2017 as a consequence of the aging of the baby boomers.)

Among the 44 states that were either Right to Work or forced-unionism for the entire decade from 2007 to 2017,  the 10 states with the greatest percentage losses in peak-earning population, ranging from 10% to 20%, are all forced-dues states  Meanwhile, in the 22 states that had Right to Work laws on the books for the entire decade from 2007 to 2017, there was an overall net increase of 1.6% in peak-earning-year population.

In his U-Haul post this month, Perry mentions that he last conducted a similar analysis of comparative truck rental pricing roughly three years ago.  At that time, “the ratios for the same matched cities was much smaller, ranging from 2.2 to 2.4 to 1 . . . .” This suggests that the “outbound migration” from Big Labor-dominated California to Right to Work Texas “must have accelerated over the last three years.”

Economist Mark Perry: “U-Haul charges 3-4 times more for one-way truck rentals going from San Francisco or LA to Houston or Dallas than vice-versa based on what must be a huge net outflow of trucks leaving [forced-unionism] California (leading to low inventory) and a net inflow of trucks arriving in [Right to Work] Texas (leading to high inventory). ” (Chart reproduced from Dr. Perry’s blog for the American Enterprise Institute.)