States with higher salaries and more generous welfare programs tend to have higher costs of living. The extra spending is one factor which tends to drive up pri

States with higher salaries and more generous welfare programs tend to have higher costs of living. The extra spending is one factor which tends to drive up prices. It works with the schools too. One of the reasons colleges tuitions have risen in recent years is because subsidies have increased. When there is more money being spent on a good or service, there nearly always an increase in price. So, if the California government pays it's employees more money, and spends more on welfare than average, then the costs of living are necessarily going to increase. Of course, there is more to it than that. Highly paid technical workers can make things difficult for more poorly paid locals as well, but it's certainly part of it.