Californians are moving to Mexico by the thousands to escape expensive costs of living and inflation

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Thousands flock south of the border to escape the crippling cost of living under Biden and Governor Gavin Newsom

  • Californians fleeing rising prices in the state are relocating south of the border to Mexico
  • The trend comes as inflation in the US has sent gas and grocery prices soaring under President Joe Biden’s administration 
  • Some have argued that the influx of Americans in cities south of the border has begun to price out some Mexicans. 

Many feel forced out by rocketing inflation in the golden state that has gas, grocery, and living costs soaring under Governor Gavin Newsom.

Thousands of Californians are fleeing to Mexico amid soaring costs of living in the golden state. Pictured: Cars packed on the board in recent years

Thousands of Californians are fleeing to Mexico amid soaring costs of living in the golden state. Pictured: Cars packed on the board in recent years

California's population declined again in 2021 for the second consecutive year

California’s population declined again in 2021 for the second consecutive year

CNBC reported Saturday that Californians are adding Mexico to the list of destinations — including Texas, Washington, and Arizona — where they can live more cheaply while maintaining high salaries by working remotely or commuting.

Travis Grossi, a content creator who moved to Mexico in 2020,  paid $1,600 a month for a one-bedroom apartment in Hollywood, while in Mexico his rent became $850 per month for two bedrooms, three bathrooms, a shared pool, and 24-hour day security.

‘We were able to cut our budget in half, which allowed us to really focus on our careers and the things we wanted to do artistically without havening to just hustle, and hustle, and hustle, every day, every week to just meet the bare minimum,’ Travis Grossi, told CNBC.

Monthly rent in Mexico can average as little as $430 per month, while rents can average as high as $1,500 north of the border in San Diego.

“Suddenly the cost of taxes, the crime rates, the politics, all the things that people are unhappy within California are coming down to Mexico,” Darrell Graham of Baja123 Real Estate Group told CNBC.

More than 360,000 Californians left in 2021, the news outlet reported. As of 2020, CNBC reported that 800,000 U.S. citizens are living in Mexico.

California has been one of the most expensive states to live in for decades. According to CNBC, only one-quarter of California households could afford the median asking price for a home in the state — about $797,470 — during the fourth quarter of 2021.

With an estimated 39,185,605 residents at the end of the year, California is still the most populous US state, putting it far ahead of second-place Texas and its 29.5 million residents. 

But after years of strong growth brought California tantalizingly close to the 40 million milestone, the state’s population is now roughly back to where it was in 2016 after declining by 117,552 people this year.

Travis Grossi (right) moved to Mexico in 2020. His rent declined by almost half when he moved, but his apartment space more than doubled

Travis Grossi (right) moved to Mexico in 2020. His rent declined by almost half when he moved, but his apartment space more than doubled

Ariel Ruiz Soto, a policy analyst at the Migration Policy institute, told CNBC that former Californians in Mexico are pricing out local Mexican citizens

Ariel Ruiz Soto, a policy analyst at the Migration Policy institute, told CNBC that former Californians in Mexico are pricing out local Mexican citizens

Californian migrations to Mexico come amid a wider exodus to other states across the US, including Texas, Washington, and Arizona

Californian migrations to Mexico come amid a wider exodus to other states across the US, including Texas, Washington, and Arizona

Though the life is good for California ex-pats living in Mexico, the trend has begun a process of gentrification that is pricing out local Mexican citizens who aren’t paid in US dollars.  

‘Certain neighborhoods are now becoming too expensive for Mexican citizens to live in because most of the time people that are actually buying the property developments are being able to do so because they either make money in US dollars, or because they are working remotely,’ said Ariel Ruiz Soto, a policy analyst at the Migration Policy institute. 

Exactly how many Californians have relocated to Mexico has not been documented, but as of 2019 it was estimated that at least 1.2 million Americans lived in the country.

The trend comes as the average cost of a gallon of gasoline in the US has risen to $5.014 as grocery costs saw the highest surge in a year since 1979.

Gas prices are up $1.94 from this time last year, spiking 50 cents in the last month alone, according to the AAA Gas Price Index.

The national average passed the $5 mark for the first time in history over the weekend, and President Biden deflected blame for soaring prices to Russia once again. 

New data show that annual inflation in the US rose to 8.6% last month. The report led Biden to concede that inflation remains a problem in the US

New data show that annual inflation in the US rose to 8.6% last month. The report led Biden to concede that inflation remains a problem in the US

Meanwhile, the cost of groceries rose 11.9 percent from this time last year, the sharpest increase the country has seen since Jimmy Carter was president.

The Labor Department’s report on Friday showed the consumer price index jumped one percent in May from the prior month, for a 12-month increase of 8.6 percent – topping the recent peak seen in March.

The new figures released on Friday suggested the Federal Reserve could continue with its rapid interest rate hikes to combat what has been coined ‘Bidenflation,’ and markets reacted swiftly, with the Dow shedding around 600 points. 

Markets continued to drop during early trading on Monday, as fears of a recession grow stronger. 

The runaway inflation rates are hurting American wallets outside of the gas station, most notably at the grocery store. 

Grocery costs have increased at staggering rates, and are expected to only keep climbing as the crisis continues.

The price of eggs has risen 32% and poultry is up 16.6% since the year began, following a bird flu outbreak in January that killed off roughly 6% of commercial chickens. 

Embargoes against Russia have also led to increases in the prices of grain-based foods, while fats and oils are up 16.9%, and milk is up 15.9%.

As inflation-borne production costs climb, producers and retailers alike have indicated that they will be forced to continue hiking prices.

On Monday, Kraft Heinz indicated that they would raise prices on a number of products in August, according to the Wallstreet Journal, with chief of sales Cory Onell saying that the recent inflation was directly to blame for the company’s upcoming price increases.

And there’s no relief to be found in eating out, with the Labor Department report showing that restaurants have increased prices by 7.4% over the course of the year.

The rocketing prices of food have led to consumers switching brands, stores, and altering their buying habits.

The Beige Book report, compiled by 12 regional Federal Reserve banks, shows that people are opting to buy half-gallons of milk instead of full, and that they’re switching to store brands to save on costs. 

According to numbers from the Food Industry Trade Group, 35% of consumers are now buying store brands instead of name brands, and 21% are opting for less fresh seafood and meat to try to save on costs.

Speaking to reporters on Saturday, Biden said Russia’s war in Ukraine was the blame for the surge in the cost in the price of oil and gas.

‘It’s outrageous what the war in Ukraine is causing,’ Biden said. 

‘We’re trying very hard to make sure we can significantly increase the amount of barrels of oil that are being pumped out of the reserve we have,’ he added.  

Biden is facing growing political backlash as high prices increase the pain for American families, who are seeing daily records at the gas pump. 

Overall, global oil prices are rising, compounded by sanctions against Russia, a leading oil producer, because of its war against Ukraine.

In addition, there are limits on refining capacity in the U.S. because some refineries shut down during the pandemic.

The combined result is seeing the cost of filling up surging, draining money from Americans who are facing the highest rate of inflation since 1981. 

Surveys show that Americans see high inflation as the nation's top problem, and most disapprove of Biden's handling of the economy

Surveys show that Americans see high inflation as the nation’s top problem, and most disapprove of Biden’s handling of the economy 

Gas prices in the United States are now averaging $5 per gallon

After the release of the Labor Department’s May numbers, President Biden finally conceded that inflation remains stubbornly high after months of deflecting the issue. 

Biden previously claimed that inflation had peaked as far back as December, and tried to strike a hopeful note in more recent months, but his reaction to the May figure struck a more somber tone, while still blaming Vladimir Putin and Republicans in Congress.

‘Today’s report underscores why I have made fighting inflation my top economic priority,’ Biden said in a statement, conceding that ‘it is not coming down as sharply and as quickly as we must see.’

Surveys show that Americans see high inflation as the nation’s top problem, and most disapprove of Biden’s handling of the economy.

Friday’s report underscored fears that inflation is spreading beyond energy and goods whose prices are being driven higher by clogged supply chains and Russia’s invasion of Ukraine. 

If the Fed becomes more aggressive in combating inflation with rate hikes, it will mean higher-cost loans for families and businesses, and raises the risk of recession. 

‘Virtually every sector has higher-than-normal inflation,’ said Ethan Harris, head of global economic research at Bank of America. 

‘It’s made its way into every nook and cranny of the economy. That’s the thing that makes it concerning, because it means it’s likely to persist.’ 

 A top UK economist scolded the Federal Reserve Bank on Sunday, suggesting that the current inflation could have been avoided but for the naivete, or arrogance, of the central bankers who dismissed rising prices as temporary.

‘There was hope initially, that it is transitory, meaning temporary and quickly reversible,’ Mohamed El-Erain, a chief economic advisor to Allianz, said on Face the Nation Sunday. ‘There was hope, as you pointed out, that it had peaked. I never shared those hopes. I think you’ve got to be very modest about what we know about this inflation process. And I fear that it’s still going to get worse, we may well get to 9% at this rate.’

He said that ‘humility is totally called for.’

‘I was very puzzled a year ago when so many people were so confident that inflation was transitory. There was so much we didn’t understand about the post-COVID inflation, that humility would have been a good idea,’ he said.

Meanwhile, controversial YouTuber-turned-boxer Jake Paul has joined the chorus of Biden critics, taking to Twitter to air his grievances over the state of the economy.

Paul posted a direct message aimed at Biden in which he listed reasons as to why the country wasn’t doing well and where it was heading.

‘Biden accomplishments 1. Highest gas prices 2. Worst inflation 3. Plummeting crypto prices 4. Highest rent prices ever 5. Created new incomprehensible language,’ he began.

YouTuber-turned-boxer Jake Paul has lashed out at President Biden in a tweet, blaming him for high gad prices, inflation, high rent and plummeting crypto prices

YouTuber-turned-boxer Jake Paul has lashed out at President Biden in a tweet, blaming him for high gad prices, inflation, high rent and plummeting crypto prices

Source: INFOBAE, cnbc.com

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