The California Exodus Explained
Who is leaving California?
A study by the California Legislative Analyst’s Office (LAO) has determined the type of people who are leaving California. While the media has been mostly focusing on the wealthiest people, the people who have actually left the state are typically lower and middle class people and tend to be under the age of 65.
Looking at the California Book of Exoduses, a variety of different sizes of businesses have left the state from larger companies like Hewlett Packard Enterprise to smaller companies like Precision Swiss Products.
What are the most common reasons people want to leave California?
In a 2019 Berkeley IGS poll, they looked at reasons why people are considering leaving the state. For younger people wanting to leave the state, the high cost of housing is their main complaint with California. For older people, they complain more about the state’s high taxes and the state’s political culture. The state’s political culture reason is the most common reason cited by conservatives.
We have also kept track of reasons why businesses are choosing to leave California. Typically, they give significant praise to their new home cities, complimenting them for their “business-friendly” environment, which is clearly throwing shade at California’s failure in being a business friendly state.
A study by the Milken Institute showed Silicon Valley’s status as a hub of business has been dropping in recent years. San Jose dropped from fifth to 22nd place over the span of a year, while San Francisco plummeted from first to 24th. Also, manufacturing is now considered impossible in California. Manufacturing needs cheap land, water, and electricity, and California has none of the above.
What is the magnitude of the Exodus?
From 2010 to 2020, over 1.3 million Californians left our state with 500,000 leaving just in 2019 and 2020, according to Public Policy Institute of California. California also lost a congressional seat for the first time in its history. California lost $8.8 billion in gross adjusted income in 2019 from more people leaving the state than coming in. About $1.5 billion of that went to Texas.
Our Book of Exoduses has recorded over a hundred entries including small, medium, and large companies as well as notable celebrities that have left. California was also rated by the moving company, U-Haul, as the most moved out state of the union in 2020.
What is the time period for the California Exodus?
While the California Exodus received much attention during the COVID-19 pandemic as businesses were forced to relocate to more-open states, the movement of people and businesses out of California started long before the current pandemic. Looking at the trends for the search term “California exodus,” it only started to gain traction during the pandemic. So, articles referring to the exodus generally only cover the previous year and a half.
But we know that people started to grow disenchanted with California as early as the 1990s. A UC San Diego survey noted that from 1967 to 1985, over 70% of California residents considered California one of the best places to live. But from the 1990s to now, it has consistently been around 45%.
Source: University of California San Diego
Another look at Google Trends found that “leave California” has been growing consistently since 2009. The Exodus is the result of decades of bad policies, not just the destructive pandemic-related rules imposed in the past year.
I know many people who are staying in California, moving to California from another state, or are leaving California for unrelated reasons. Why are you insisting the California Exodus is a thing?
People move in and out of California for a variety of reasons. They may not be related to things we discuss about the Exodus. But on net, more people are leaving California than coming into it. When you look at our California Book of Exoduses, you will see common themes of why businesses and people are leaving and a lot of it has to do with California’s poor public policy.
California for decades has famously been a high population growth state, a state where everyone wanted to move to. It has only been recently that our population growth has slowed down. California even had its first negative population growth last year. That massive shift is what makes the exodus notable.
Will the California Exodus be continuing for the foreseeable future?
We have recently commented on an analysis done by Moody Analytics and CNN Business on the “Back to Normal” index of each state. We found that California is four months behind on reopening the state compared to the country as a whole. Looking at this, the past two decades of businesses leaving our state, along with the fact that California has the second worst unemployment rate in the state, the outlook does not look promising.
CORRECTION: A sentence previously mentioned that certain businesses have left California in the previous month, September 2021. Some of those businesses actually left California prior to September 2021, so that part was removed.
Brandon Ristoff is a policy analyst for the California Policy Center.