California Exodus
Are people really fleeing the Golden State?
Since the pandemic, the phrase “California exodus” has been bandied about with great excitement and alarm. Is this a sign of a dark future for California? Is this the beginning of the end? Have the struggles of sky-high rent and progressive-high taxes finally outweighed the allure of sunshine and tech jobs? Well, I set out to find out. I looked at responses to the Annual Social and Economic Supplement (ASEC) of the Current Population Survey (CPS) from 2009 to 2021 to investigate who left and entered California and why.
Since 2012, the gap between the number of people leaving California and the number of people entering has widened. This trend starts back in 2012, so it’s unclear how much of this shift is due to increased remote work and other impacts of the pandemic. It’s possible the “California Exodus” is less a dramatic shift and more the continuation of a longer-term trend.
If more people are leaving California than entering it, what are the driving forces of this migration? Two seemingly contradictory positions have both gained traction: that lower-income people are being pushed out of the state by the high cost of living, and that higher-income people with more flexible jobs (such as in the tech industry) are leaving because they can keep their high paying job while living in a more affordable location after the increase in remote work. So which is true?
People entering California on average have higher incomes than people leaving California. This supports the idea that lower-income people are being priced out of California rather than higher-income people leaving due to increased remote work options. Even when remote working was at its height throughout 2020, the people entering California in 2020 were wealthier than those who entered in either 2019 or 2021, when remote work options were less widespread.
Work has consistently been the number one reason people migrate either into or out of California since 2012. The number of people leaving who gave cheaper housing as their primary reason to leave has increased steadily since 2015, supporting the hypothesis that more lower-income people are being priced out of the state.
What’s clear is that gradually increasing numbers of people are leaving California. Whether or not this can be labelled an “exodus” is more a matter of opinion. The trend hasn’t been extremely dramatic, but it is consistent and meaningful. It also seems likely that more lower-income people are leaving the state due to high cost of living than higher-income people leaving the state due to flexible remote work policies.