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'California Exodus': Why Are So Many People Leaving The Golden State?47:15
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Izzy Galvan, 20, wears a face mask while visiting the Griffith Observatory overlooking downtown Los Angeles, Wednesday, July 15, 2020, in Los Angeles.  (AP Photo/Jae C. Hong)
Izzy Galvan, 20, wears a face mask while visiting the Griffith Observatory overlooking downtown Los Angeles, Wednesday, July 15, 2020, in Los Angeles. (AP Photo/Jae C. Hong)

The 'California exodus.' From big tech to everyday Americans, many are leaving California. What's driving the state's record low population growth?

Guests

Lauren Hepler, economy reporter for CalMatters. (@LAHepler)

Adam J. Fowler, director of research at Beacon Economics and at the UC Riverside Center for Economic Forecasting and Development. (@adamjfowler)

Also Featured

Ben Koo, editor-in-chief of the sports and pop culture blog The Comeback. (@bkoo)

Interview Highlights

Is there a mass exodus from California?

Lauren Hepler: “It's funny because I just asked the governor's new economic advisor about this. It's the former Clinton press secretary, Dee Dee Myers. And her answer was, First of all, yes, this talk is completely overblown. It seems to have gone into overdrive after people like Tesla CEO Elon Musk have very publicly talked about how they're heading out for Texas during the pandemic.

"But she also said, Yes. On the other hand, this conversation really does sort of crystallize a lot of major long term challenges in the state with things like housing, transportation and taxes that, again, in a lot of ways it does make sense to think about right now. Because people have this time away from their grueling four hour long commutes and all of these other sort of daily circumstances that had kept things the way they were for so long.”

There were some numbers that came out that measured migration from July 1 of 2019 to July 1 of 2020. So, of course, that captures the pandemic, too. But across those 12 months, California's population grew only by roughly 21,000 people. And that's with a state that already had almost 40 million. So a .05% growth in population. That does seem miniscule.

Lauren Hepler: “That's very small. And it's a big drop from other recent years, especially after the Great Recession. There’s a major influx of people from other states, not to mention these massive migrations that we've seen in previous decades. The other statistic that's really caught a lot of people's attention was that last year, that same time frame from July 2019 to July 2020, 135,000 more people left the state than moved here. And that's only the 12th time that that's happened since 1900.

"And what really what's happening when you dig below — OK, how is the population still growing if more people are moving to other states? The bulk of the people moving to California are coming from other countries. And then when you drill down into who's moving from state to state and coming into California, it's definitely higher earners, more affluent people. So, again, you've got multiple things going on at once. But the high level takeaway is that you've got a lot more people moving to other states than coming here from other U.S. states.”

Has the pandemic slowed international migration?

Lauren Hepler: “One of the things that's tricky about all of this is that there's a lag with this kind of demographic data, those numbers on 2019 and only through July 2020 kind of just came out. So we don't even know what happened after July 2020 yet. And that's why on one hand you'll hear a lot of state policymakers say it's hard to make decisions based on this idea of an exodus right now when we don't even know how real it is when it comes to the numbers. So that's been kind of an ongoing challenge in terms of waiting for that census data to come out. Or the IRS also tracks, obviously, taxpayers moving from state to state. So that also sort of kicks the can down the road on all of this.”

The tech sector has been kind of restive in terms of its love affair with California. So Tesla moving its headquarters. But I think more interestingly, Oracle and Hewlett Packard. I mean, Hewlett Packard is a company that basically defined the birth of Silicon Valley.

Lauren Hepler: “That was a big one. And it definitely kind of dredges up things that have been familiar refrains when thinking about California compared to other states for business reasons. So for a long time, like I remember during the Great Recession, about a decade ago, you had a very similar conversation with business executives from Arizona or Texas flying in and doing these road shows, especially in Silicon Valley, saying, Hey, move all of your office workers to our state. We've got low taxes. They can buy nice big houses. It'll be great.

"And then it seems like we're kind of at that moment again. But the question is, will it be even more convincing this time around, given this kind of unprecedented shift to remote work we've seen that arguably makes location even less important? And if the idea is that people have been paying a premium to be in California for this sort of physical locational reasons, will that continue after all of this?”

Our attention was really caught by the narrative of a 'California exodus.' Where is that narrative coming from?

Lauren Hepler: “On the one hand, you'll see it sort of at a very grassroots level, like folks who are posting on Facebook about, You know, I'm sick of this. One woman I interviewed, she was in Modesto, which is a more agricultural part of California, and she said, My family has been living in a one bedroom apartment. My husband and I sleep in the one bedroom with our infant. And our school age son is living in the living room. And that's just completely unsustainable. The pandemic, being at home so much was the breaking point. They said, We're out of here, we're moving to Utah. So you definitely hear that kind of thing from working class folks who just said this is too much. And that's a very real sentiment.

“You also hear the same thing, like I alluded to, with businesses thinking about taxes and lower costs out of state. I also talked to a fair number of folks who are kind of retirement age and their homes in California have massively appreciated over time. So they're able to, you know, cash out, get a couple million dollars and then ride off into the sunset to Scottsdale or whatever other retirement destination and sort of live there, lower tax. But on the other hand, there's also definitely folks who are very interested in fueling this narrative, specifically that phrase California exodus you will see everywhere on YouTube associated with mostly right-leaning groups.

“So there's one called PragerU. That's very specifically funded by folks who are Trump mega donors. And you'll see in all of this sort of horrific footage of California. Talking about how it's a third world country, all of this, then you'll get sort of the shot, the split screen over to Texas, where it's like golden retrievers and kids bounding down a school bus and Ted Cruz talking about how great everything is. So there’s certainly very explicitly political things going on here as well, but it's very smartly tapping into real resentment and frustration on the ground.”

We're seeing a lot of headlines that are saying that it's California's progressive governance that has caused this exodus. What do you think about that?

Adam J. Fowler: “Quality of life, housing, transportation. So from an economic point of view, waiting at a light, commuting three hours, none of those are good things for productivity. That is an inefficient use of human capital. So that isn't a net winner for any sort of economy, California or otherwise.

“I think the real thing I think a lot about is why is the world this way? So as an elder millennial, when we were playing Oregon Trail and I was thinking about California or the West, I wasn't thinking about the regulatory infrastructure we find ourselves in. Some sort of baroque general plan with lots of planning regulations, zoning requirements, density, the size of my front yard, the shadow my roof can cast, those sorts of things. And I think what's interesting is I don't think of them as progressive necessarily.

"I think of them as maybe generational or some other kind of dimension of the challenge, because we know how to build houses. We have the technology elevators for more dense urban areas. We know how to do lots of things, including transit. But for some reason, the political structure isn't allowing us to do any of those things that basic planners, basic economists have figured out.”

On how California can modernize for 2021, from commutes to the economy

Lauren Hepler: “You certainly see that in areas like people's daily commutes. Granted, it's changed a bit during the pandemic, but that traffic is already coming back. I can tell you, if you're going up to Oakland or San Francisco. But one of the things you see there is just how broken the transportation infrastructure is. Because the Bay Area has 27 different transit agencies. So a lot of this is sort of like having modern systems that communicate with one another, that can build on one another instead of each operating in their own little chaotic universes. And I think that you also see California, they attempted to get ahead of the curve on something like gig work.

“They had a measure called AB5 that said, OK, we're going to take Uber drivers, these other independent contractors, and we're going to make them employees as part of this effort. They said, the left-leaning Democrats who backed the measure said, to sort of bring our workforce into the 21st century and to get at some of that inequality you mentioned. But then we saw voters this November roll that back.

"And again, I think the pandemic very much came into the messaging from companies like Uber and Lyft, saying this is not the time to be getting experimental in our policy. And ultimately now those workers have reverted back to independent contractors with much less worker protections. So smaller subsidies for health care, that kind of thing. So these are all ongoing conversations in the pandemic has influenced them in a really interesting way.”

If you were given a magic wand to start this modernization process, what would you do?

Adam J. Fowler: “I think it's going to have to come from the state legislature. … I think one of the first things is to legalize really multifamily and dense housing. In California, affordable housing is often multifamily housing, condos, apartments, things like that. We need to fast track that development around a lot of our transit investments in California. We need to take the pressure off of the existing stock. I think it's as much a moral issue as it is an economics issue. We've kind of rolled up the carpet behind the folks that got here first.

"I'm always reminded of the economist David Ricardo, who was chewing on these issues way back, and he thought about, We don't want to build an economy or a society where the good farmland is grabbed by the first generation and everyone else is constantly reduced to rockier, less productive land. We don't want to build a system where you kind of come in the world or what time you plant your flag, the entire system gives the opportunity only to those folks.

“And so I think there's great opportunity. I'm optimistic. I moved from Texas to California to go to graduate school. Why? Because the investment in the UC system. So talent is here. The interest is here. I'm still here. I'm as frustrated as anyone. But business will be where talent is. And California is one of the top locations for talent. The final thing I would say is I love your point about this is a U.S. problem. For as much as the political dialogue is kind of ‘California is its own thing.’ The California economy and its function or non-function is a huge part of the U.S. economy. And so the U.S. economy sinks or swims with California. And so we all have a vested interest in making sure we do it right here in this state. Even if you’re not in California.”

From The Reading List

CalMatters: "California Exodus: An online industry seizes COVID-19 to sell the Red State Dream" — "At first, Stephanie Morris was nervous about leaving Modesto. She’d lived in the Central Valley her whole life, but her family couldn’t keep paying $850-a-month for her sons to share a living room while she, her husband and the baby slept in their apartment’s only bedroom."

NEXT 10: "California Migration: A Comparative Analysis" — "After a slowdown in the so called California exodus during the Great Recession, California has experienced an acceleration of negative domestic migration in the last few years; more people are moving to other states than are moving to California from other parts of the country."

Berkeley News: "New poll: Half of California voters have considered moving out of state" — "More than half of California’s registered voters have given “serious” or “some” recent consideration to moving out of the state, according to a new poll from UC Berkeley’s Institute of Governmental Studies."

CalMatters: "The hidden toll of California’s Black exodus" — "In a quiet corner of Elk Grove, where the maze of subdivisions and shopping centers gives way to open fields, Sharie Wilson has spent the last three years building her dream home."

Yahoo: "Why rich people leaving California isn't what you think" — "In case you missed it, San Francisco canceled Abraham Lincoln. Yes, last week the San Francisco School board voted 6-1 to remove Lincoln’s and dozens of other historical names (see the board’s spreadsheet here) that committed transgressions from public schools, in this case, Abraham Lincoln High School."

This program aired on February 11, 2021.

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