Growth – rapid, buoyant, unstoppable – has been part of California’s DNA since tough and greedy men from around the world came here in search of gold 170 years ago.
Now it may be a thing of the past.
The Public Policy Institute of California tells us that its recent online survey of 2,325 California residents, taken between Nov. 4 and Nov. 23, found 26% of Californians have seriously considered moving out of state and that 58% say that the American Dream is harder to achieve in California than elsewhere in the United States.
“I think we have a real challenge to our business climate. It’s just not normal for a series of big businesses to announce they’re leaving.” — Jim Wunderman
“California’s population increased by 21,200 between July 1, 2019 and July 1, 2020, to total 39.78 million, according to official population estimates … This represents a growth rate of 0.05 percent, down from 0.23 percent for the prior 12 months – another record low state population growth rate since 1900 … Now more than 7 million people born in California call other states home,” the state Department of Finance reported on Dec. 16.
There are even websites. ExitCalifornia.com gives prospective emigrants tips on how to make stress-free moves to various states such as Oregon, Texas and Idaho. Another website, leavingthebayarea.com specializes in moves from the Bay Area.
The exodus from the Golden State may be large, but nationally, California ranks fifth among states losing population. New Jersey leads, followed by New York, Illinois and Connecticut.
It’s not just residents. The list of major companies moving their headquarters out of California in recent months includes:
–Software giant Palantir
Apple and Dropbox are still headquartered in the San Francisco Bay Area, but both are expanding their workforces elsewhere.
“It’s a real challenge,” says Jim Wunderman, president of the Bay Area Council. “I think we have a real challenge to our business climate. It’s just not normal for a series of big businesses to announce they’re leaving. California used to be the place you went to. Now it’s the place you leave.”
The major problems California businesses face are “the regulatory environment and uncertainty in policymaking.” — Rob Lapsley
But there’s more to it than major firms, says Rob Lapsley, president of the California Business Roundtable.
“They’re the big names, but you don’t see so much of the smaller businesses that are being affected,” Lapsley said in a telephone interview with Capitol Weekly.
The major problems California businesses face are “the regulatory environment and uncertainty in policymaking,” he declared.
Lapsley argues that the state’s elected officials aren’t taking a close enough look at what’s going on in the California economy because they’re fixated on the figures in the state budget.
“They don’t take the time to look at the fundamentals of the economy,” he says. “You never see a signal from state government that they’re aware; we’ve seen no urgency” in dealing with what Lapsley regards as a state economy slowed by overregulation.
“There is one group that California continues to attract: college graduates.” — PPIC
Lapsley is also critical of Gov. Gavin Newsom’s attitude toward the state’s economy: “We’ve got a governor where is doesn’t matter what he says, it’s what’s he going to do?”
Newsom’s new budget, however, proposes $575 million to help California’s small businesses in addition to an initial $500 million allocation for the California Small Business COVID-19 Relief Grant, bringing the total for California’s small businesses to more than $1 billion.
“ … these proposals double down on the Newsom Administration’s commitment to rebuilding the economy, with investments across sectors and benefits for businesses of all sizes,” the governor’s officer said in a statement.
The go-go growth era may be ending in California, but the state seems to be amassing a higher percentage of the highly educated.
“There is one group that California continues to attract: college graduates,” the PPIC reports. “This interstate migration pattern—gaining large numbers of college graduates while losing large numbers of less educated adults—doesn’t happen anywhere else in the country. Over the past five years, California has attracted 162,000 more college graduates (adults with at least a bachelor’s degree) from other states than it has lost.”
A high-paying job in a burgeoning industry is fine, he said, but “jobs need to go home to a bed at night.” — Adam Fowler
There is at least one theory that California’s changing economy may bode ill for the less-educated, while attracting the more-educated to high-tech fields in Silicon Valley and San Diego’s biotechnology. In the minds of some, even with its population growth at a near standstill, increasing numbers of the highly educated could mean the state will increase its reputation as an enclave of the coastal elite.
Adam Fowler, director of research for Beacon Economics, an independent research and consulting firm based in Los Angeles, doubts, however, that a higher-than-usual influx of the well-educated will make a major difference in California’s socioeconomic status. An urban area with highly educated, affluent residents provides more abundant job possibilities for the less educated, he argues, because of an increased demand for restaurant servers or laundry workers.
“I’m the first to raise hell about overregulation,” Fowler told Capitol Weekly in a telephone interview, but, he said, the biggest problem is housing. A high-paying job in a burgeoning industry is fine, he said, but “jobs need to go home to a bed at night.”
Wunderman agrees. “Because of the cost of living, many parts of the state are out of bounds for people with modest incomes,” he said in an interview.
Does telecommuting help solve the housing problem?
“Everybody’s looking at it,” Wunderman says. “You’re much better off if you’re doing the same job from a place where you can afford a house.”
The California exodus has not always been greeted warmly by officials in the non-California arrival states.
Boise mayoral candidate Wayne Richey once proposed at an election forum to build a $26 billion wall to keep out people moving from the Golden State.
Texas Gov. Greg Abbott issued a sort-of welcome on Twitter to Californians moving to his state: “Remember those high taxes, burdensome regulations, & socialistic agenda advanced in CA? We don’t believe in that.”