We might pay you less but, on the other hand, it costs more to live here
The U.S. Dept. of Commerce estimates variations in the cost of living by state relative to the U.S. average. Above is a chart* showing the results for 2012. [Click on the chart to enlarge.] California is a high cost state. An article in the San Francisco Chronicle also gives data from the same source by metropolitan area. You will not be surprised to learn that the San Francisco area and Silicon Valley area are particularly expensive places to live, as is the LA area. Keep the cost disadvantage in mind when you see comparison of UC faculty pay with other universities. Typically, such comparisons are just in nominal dollars, unadjusted for local costs of living.