The "U-Haul Factor"

I've been alerting all my Pilgrim buddies that folks are bailing on California like rats from a sinking ship.  

I've been doing that for years now, and more than a few have paid rapt attention.  So much so it seems that many are taking my advice and leaving.  And thus the cost to leave has gone up significantly.  And that's because those thinking of bailing are not the only ones who want to escape...

Huh?  It now costs more to leave because more want to leave?  It's a good "teachable moment," as ex-POTUS Obama used to say.  Stay tuned...

I created a comparison a few years back to explain what I then called the "U-Haul Factor."  That's very simply the difference between what it costs to rent a U-Haul truck to go one-way from Lost Angeles, as an example, to somewhere else, anywhere else, versus what it costs to go from that "somewhere" back to L.A.  The theory is based upon that old "supply and demand" economic theory that anything in greater demand will always cost more and generally be more difficult to obtain.  Gold, for instance.  And Rolls Royces.  

And cocaine...  

This theory used to be taught in Economics 101, as I'm sure you know.  Now I believe it may have been replaced by "gender studies," or "climate chaos," or "wealth redistribution,"  but I could be in error.  And considering that I am a gen-u-wine graduate economist, and actually know what I'm talking about on this one single subject, that doesn't often happen.   

Well now I have accurate data to prove that folks are rushing headlong from this, the once-Golden State, to greener pastures.  And almost any pasture is greener.  We can now compare the exact difference between leaving here and coming here, if you use a U-Haul to do it.  And that difference is expressed as a "factor."  As in, a multiple of the cost of going versus coming.

Example:  Let's say you want to travel to Houston from Lost Angeles.  Your U-Haul 26-foot truck, one-way, shall cost you $3,965.*  Now let's say you'd like to come back (although I can't imagine why).  That will set you back...ready for it?...$967.  That gives us a "factor" of 4.1:1.  Or, it costs a bit over four times as much to go from LA to Houston as it does from Houston to LA.  

Another?  Sure.  If you wish to leave San Franpoopville, your truck to Houston will set you back $4,575.  From Houston to SFO?  $1,115, for a "factor" of 4.1:1.  Again, four times as much to come here as to leave.

Why the yuuuuuge difference in price?  In an ideal world for U-Haul, it would likely prefer to have a close balance in the flows of one-way truck rentals between any two major cities (or states) to maintain balanced truck inventories in both locations, and would probably then charge about the same one-way rental rates for trucks going in either direction.  But when relative demand is significantly different, that difference is reflected in a yuuuuge imbalance in truck inventories (over supply in one location, under supply in the other), which then leads to the dynamic, market-based pricing displayed above.  

In other words, somebody has to drive that one-way truck back to where it came from.  So the inflated price U-Haul charges reflects that attempt to readjust inventory.  And the inflated price people are willing to pay reflects the extent of their desire to leave.      

What does that also tell you?  It tells you, in hard and fast economic detail, at least in this one example, that four times as many people are leaving as coming.  That's not an exact, take-it-to-the-bank statistic, but it is sure as Hell interesting, isn't it?  And it also indicates that middle-class folks, those most likely to use a U-Haul, are the ones leaving.  And it seems to show that this one simple yardstick may be telling us all we need to know about people "voting with their feet."  

Of interest, the last time I cogitated on this data was 2015.  Back then, the ration was more like 2:1.  Shocker!  In short, the desire to leave CA  by U-Haul has doubled in the past few years!

People are moving all the time.  They do that.  It's a free country.  Not as much as it used to be, but still relatively free.  But we don't often have an accurate gauge as to where, and via what method, and how much it might cost.  And now we know that people are so damned anxious to get out of this failed "paradise" that they're willing to be raked over the coals by a truck rental company to do it. 

Somebody up there in Sacrataxyou ought to take a look at data such as these and do some rapid changing of our laws.  Otherwise there won't be anyone left here in this failed experiment except sign-twirlers and Starbucks baristas...

*  U-Haul, 2019