It’s no longer a secret that two of America’s biggest states have suffered a sad decline over the past few years. New York and California have dropped pretty sharply from the top of most desirable American locations to reside and do business.
But people who know both states very well believe that one is in a significantly worse state than the other. One of those persons is JP Morgan Chase CEO Jamie Dimon. Simon has had considerable experience of both cities, two places where his decades of business experience have constantly led him to.
He has compared notes on both locations and discovered that California is much worse than New York. “San Francisco is in far worse shape than New York,” Dimon declared during a recent interview. But why does he think so?
According to Dimon, California hasn’t recovered from its decline, which began during the pandemic. Between 2020 and 2022, San Francisco lost around 100,000 residents to states like Florida.
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He believed that the blame rests at the feet of the local governments. “Any city who doesn’t do a good job, it will lose its population,” he said. Over the years, poor government policies and implementation made the city less desirable for residents.
Even now, population growth projections through 2060 are pretty slim. Talking about New York, Dimon believes that the state’s challenges are mostly finance-related.
“New York’s got to worry about fiscal,” he said. “You can’t have a fiscal deficit that high where you think that constantly taxing individuals and companies more and more, where, you know, the bulk of the tax is paid by a handful of people, it’s driving people out.”
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Dimon believes that New York can solve its problem by reducing its dependence on taxes. Most residents and businesses that left the Empire State fled the overbearing tax burdens that seemed to punish the rich.
“You can’t have a fiscal deficit that high where you think that constantly taxing individuals and companies more and more, where, you know, the bulk of the tax is paid by a handful of people, it’s driving people out,” he said.
However, he believes California’s problems are more profound than that. One of the reasons why San Francisco became less of a top location to reside was the soaring housing costs. The higher the cost of housing became, the more residents moved over to states with affordable housing.
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Reports showed that the cost of accommodation in San Francisco shot up by 25% in the space of only a year. Many of its residents who stayed back or couldn’t afford to relocate ended up in homeless encampments.
In turn, these encampments made the city less attractive and discouraged intending residents. To compound the issue, a judge ruled that the government couldn’t clear the encampments without providing more respectable accommodation for the residents.
Fewer residents also mean that businesses have less customers and less profit. The workforce will also suffer a reduction, negatively impacting the economy. Things might get worse for the Golden State unless something drastic is done.
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