By David M. Greenwald
We have seen a steady narrative of news stories arguing that California is losing population for the first time in its history, and that high-profile technology companies and billionaires are leaving the state.
In a study released by the University of California this week, however, they found “no evidence of an abnormal increase in residents planning to move out of the state.”
Instead the study found, among other things, that a majority of Californians still believe in the “California Dream.”
There are of course residents moving out of state, “but not at unusual rates.”
More importantly, there is no evidence of “millionaire flight” from California. On the contrary, “California’s economy attracts as much venture capital as all other states combined.”
Formed in fall 2020, the UC-led project is a research consortium “designed to bring a fact-based, empirical approach to California’s population patterns, helping to inform state policy and public knowledge.” The project includes studies conducted by scholars at UC Berkeley, UCLA, UC San Diego, as well as Cornell University and Stanford University.
The research draws on many data sources to investigate the so-called exodus: public opinion data, the U.S. Census, consumer credit histories, home ownership rates, venture capital investments, and information from the Franchise Tax Board.
“From housing affordability to post-pandemic recovery, California is faced with solving a daunting number of existential challenges. To help inform those important public discussions, UC assembled many of the state’s top researchers to provide a data-driven understanding of California’s population trends,” said UC Regent John A. Pérez.
He added, “Sliced and diced by geography, race, income and other demographic factors, our efforts have produced a clearer picture of who perceives California as the Golden State versus a failed state. The empirical data will be, at once, disappointing to those who want to write California’s obituary, as well as a call to action for policymakers to address the challenges that have caused some to lose faith in the California Dream.”
UC San Diego conducted a survey. It found that “the percentage of Californians who plan to leave the state has remained static over the past two years. Twenty-three percent of California’s voters reported that they were seriously considering leaving California, which is slightly lower than the 24 percent found in a 2019 survey conducted by UC Berkeley.”
In fact, you could argue it’s within the clear margin of error.
They also found, “By nearly a 2-to-1 margin, Californians respond that they still believe in the ‘California Dream’ (that it’s a great place to live and raise a family) but belief in that dream depends on demographics, economic status and partisan affiliation.”
Interestingly enough: “Spanish speakers, Latinos, African Americans, Asian Americans and younger Californians are more optimistic, while middle-class Californians, white respondents, older residents and Republicans are more pessimistic.”
There are areas of concern.
For example, “Middle-class Californians making incomes between $50,000 and $100,000 are the most concerned about the state of California today as well as its future. “
At the same time, you might find it interesting that the gap between Republicans (30) and Democrats (21) is there but not overwhelming, in terms of those considering moving.
Those who are opposed to growth, however, may take solace, “Growth is not a goal for most Californians: Asked to look ahead 10 years, 35 percent of respondents believe it would be better if the population decreases significantly and 46 percent want it to stay about the same. Only 19 percent of those surveyed said that the state would be better if its population increases.”
Down about eight points are those who believe California is the best place to live—down from 50 percent in 2019 to 42 percent in 2021.
“Despite the popular notion of unhappy Californians leaving the state en masse, our robust research shows there is actually no exodus,” said Thad Kousser, chair of the political science department at UC San Diego and the lead researcher of the most recent survey. “Most residents say that they still believe in the ‘California Dream.’ Policymakers, including those trying to prevent an exodus, should focus more on those who are not as optimistic about the state’s direction, including many in the middle class facing steep housing costs and people from areas of the state facing the greatest economic challenges.”
There is evidence of people moving out of San Francisco.
“Using 16 years of credit history data to track residential moves through the end of 2020, a UC California Policy Lab report found “no evidence of a pronounced exodus from the state” and “little evidence that wealthy Californians are leaving en masse because of the pandemic,” they report.
But they did find a “net migration away from San Francisco during the pandemic along with a decline in the number of people moving to the state.”
But even then, most of those leaving San Francisco stayed in the state.
“Approximately two-thirds of people who moved out of San Francisco remained within the 11-county Bay Area economic region, and 80 percent remained in California which is consistent with trends in prior years,” the survey found.
“Counties in the Sierra Nevada mountains and other parts of northern California saw huge increases in former Bay Area residents, with 50 percent and in some cases double that in 2020 as compared to 2019,” they found.
Finally, California continues to draw about half of all venture capital investment in the entire nation.
“California’s share of venture capital dollars rose from one-third in 1995 to more than half throughout the 2010s. In the first quarter of 2021, the state’s share of VC funding stood at 48 percent, slightly below trend but consistent with normal year-to-year fluctuations,” the survey found.
The report did not analyze causes. But putting all of this together, it appears that the middle class is a bit more stressed right now than the wealthy. There is a slight partisan effect, but it’s hardly overwhelming.
The surveys seem to suggest that it is more middle class rather than the wealthy who are dissatisfied. That suggests that it might be housing prices and affordability that are driving people out. And, in fact, the movement from San Francisco to the hills seems to bear that out as well.
Bottom line: the idea of a mass exodus out of California seems to be another false media narrative.
—David M. Greenwald reporting