California Declining

For obvious reasons we cover the continuing malaise inflicting New York City more than we do the similar malaise inflicting California. Regarding New York, ours is becoming an outlying point of view. Optimism is currently reigning in the Big Apple. Young people especially are out and around, making up for the parties lost to the pandemic. Still, we remain skeptical, though it would certainly be a good thing if the city bounded back. See my post of two days ago.

For today’s daily dose of reality, we report on some demographic statistics about the current outmigration from California. They were compiled by demographer extraordinaire, Joel Kotkin. When it comes to losing people, California is competitive with New York:

California may be a great state in many ways, but it also is clearly breaking bad. Since 2000, 2.6 million net domestic migrants, a population larger than the cities of San Francisco, San Diego, and Anaheim combined, have moved from California to other parts of the United States. (See Figure 1.) California has lost more people in each of the last two decades than any state except New York—and they’re not just those struggling to compete in the high-tech “new economy.” During the 2010s, the state’s growth in college-educated residents 25 and over did not keep up with the national rate of increase, putting California a mere 34th on this measure, behind such key competitors as Florida and Texas. California’s demographic woes are real, and they pose long-term challenges that need to be confronted.

Has the wave subsided or is there more to come? Kotkin believes that the latter is closer to the truth:

The outmigration does not seem to have reached a peak. Roughly half of state residents, according to a 2019 UC Berkeley poll, have considered leaving. In Los Angeles, according to a USC survey, 10 percent plan to move out this year. The most recent Census Bureau estimates show that California started falling behind national population growth in 2016 and went negative for the first time in modern history last year.

As for the breakdown of those who are leaving and those who are staying, younger people are more likely to pick up and to leave. California is become more geriatric by the day:

California was once seen as a paragon of youthful energy, but it is gradually ditching the surfboard and adopting the walker. From 2010 to 2018, California’s population aged 50 percent more rapidly than the rest of the country, according to data from the American Community Survey. By 2036, seniors will be a larger share of the state’s population than will people under 18.

One question hanging over it all is whether the high tech workforce in Silicon Valley will continue to work remotely or will return to their offices:

The pandemic-driven shift to online and dispersed work has further eroded the once-unchallenged attractiveness of California cities for tech and other skilled workers. Such leading tech firms as Facebook, Salesforce, and Twitter now expect a large proportion of their employees to continue to work remotely after the pandemic and have announced policies to facilitate these preferences. Some three-quarters of venture capitalists and tech-firm founders, notes one recent survey, expect to operate totally or mostly online. Since the pandemic began, according to a study by Big Technology, tech growth has been most evident in metros like Madison, Wisconsin; Cleveland; and Hartford, while New York, the San Francisco Bay Area, Boston, and Chicago have declined.

And yet, California, like New York, now, thanks to the federal government, has ooodles of cash on hand. And yet, a state filled with rent seekers is obviously on a downward trajectory:

The Golden State has emerged from the pandemic flush with money from Washington and a spate of IPOs but suffering from the highest unemployment rates, continued corporate flight, and deteriorating social conditions in its big cities. This is not the California of the “dream” but a declining state for all but the most favored and those most dependent on government subsidies. The political establishment may continue to deny what is happening, but unless the state confronts some unpleasant facts and shifts direction, California’s demographic decline will likely continue.