After three consecutive years of population decline, the exodus from California may slow. But the effects continue to haunt the Golden State, from reduced tax revenues to the loss of skilled workers.
I am sick of high housing costs California residents have left their homes in droves during the pandemic, with other quality-of-life issues and remote work freeing them from the office. An increase in deaths due to COVID-19 restrictions and a sharp decline in immigration from overseas also contributed to the population decline.
According to recently released census data, the state’s population will decline by more than 75,000 people in 2023, or 0.2% from the previous year, to just under 39 million. This rate of decline was smaller than the 0.3% annualized decline in 2022 and the 0.9% annualized decline in 2021. In three years, the state’s population declined by 1.4%, or more than 538,000 people.
Officials and experts believe a return to growth is on the horizon, but there is still much to learn about recent migration changes and their potential lasting effects. Here are five charts to help explain who left, where they went, and how much money they took with them.
California lost $29 billion in taxable income to other states.
Residents who fled California took billions of dollars in personal income with them to other states in 2021, according to a Bay Area News Group analysis of the latest available Internal Revenue Service data.
On a net basis, the Golden State lost $5.6 billion in taxable income to residents in Texas alone. California also lost $4.4 billion to Nevada, $3.5 billion to Florida, and $2.6 billion to Arizona. In total, the state lost $29 billion to the rest of the country.
Jeff Bellisario, executive director of the Bay Area Council Economic Institute, said there is no doubt that declining taxable income is contributing to California’s current budget shortfall of at least $37.9 billion, but wealthy residents It is likely that stock market fluctuations, which have squeezed investment returns, were a bigger factor. , a professional business think tank. Gov. Gavin Newsom on Wednesday announced an annual spending plan to close the budget gap.
Bellisario said it’s no surprise that Sunbelt states like Texas and Florida, which have been the main destinations for people evacuating California during the pandemic, saw the biggest increases. In addition to offering cheaper housing and a lower cost of living, many boast growing high-tech sectors that attract high-income workers.
The five-county Bay Area region lost $1.2 billion in taxable income to Travis County, Texas, home to the fast-growing tech hub of Austin. The Bay Area also lost $747 million to Clark County, Nevada, which includes Silicon Valley’s upstart rival Las Vegas.
“The big concern is that part of the population moving out is future entrepreneurs and people starting businesses,” Bellisario said. “Everyone wants a piece of San Francisco or Silicon Valley.”
More than 800,000 people evacuate the Golden State each year during the pandemic
More than 800,000 residents packed up and left California for other parts of the country in 2021 and 2022, respectively, according to the latest census data.
Compared to 2018 and 2019, two years before the pandemic hit, between 650,000 and 700,000 people left the state each year. Data for 2020 was not available.
Which state sucked the most residents out of California? The usual suspects: Texas, Arizona, Florida, Washington, and Nevada.
Among these states, California also had one of the largest increases in migration compared to pre-pandemic levels, but none experienced a surge as large as Idaho. In the Gem State, the new hotspot for Silicon Valley billionaires, the number of people moving from California has surged 191% since 2013.
But the data also shows fewer Californians will remain in 2022 than in the previous year, and experts expect this trend to continue. And with the return of international immigrants, the state’s population problems could quickly subside.
“As we turn the page to 2024, the data shows population stability across California and the Bay Area, not an exodus,” Bellisario said.
California brain drain?
During the pandemic, more people left California with graduate or professional degrees than came from other parts of the county. This was a surprising reversal for a state with a strong economy and world-class universities.
About 30,200 more people with advanced degrees left California than arrived in 2021, according to the latest data available from the Brookings Institution, a nonprofit public policy organization in Washington, D.C. The numbers in 2018 and 2019 were about the same. This data does not take into account international migration.
For most of the past 20 years, California More US residents left than came to Japan. The main cause of migration to the state is the outflow of poorly educated and low-income residents. But with the freedom of remote work and the availability of better-paying jobs in different parts of the country, highly educated workers are increasingly looking elsewhere. .
“We’ve never been able to attract talent,” said Anna Jacobi, 51, a high-tech product manager in San Francisco who has multiple advanced degrees and is considering moving to Texas or Florida for work. “In terms of location, positions are opening up and people are willing to pay more for more experience.”
Some of the state’s largest companies also pulled out. Including companies born in California, Tesla, Oracle, Hewlett Packard Enterpriseboth of which have opened new headquarters in Texas in the past few years.
But while more highly educated workers came to California in 2022 than in 2021, fewer workers left, according to the data. William Frey, a demographer at Brookings University, said this, like other recent migration changes, is evidence that the trend may be returning to pre-COVID-19 norms.
“It’s too early to tell what is permanent and what is an effect of the pandemic,” he said.