As new Census Bureau data shows California in its third straight year of population loss, it’s prompting more questions about who is leaving and what’s keeping the migration trend going.
Unaffordable cost of living is a major driver of California's population loss, as is rising crime and declining quality of life, said Wayne Winegarden, senior fellow in business and economics at the Pacific Research Institute (PRI), in an email response to the Northern California Record.
“Universally, the states with a high cost of living are losing population while the states with an affordable cost of living are growing," Winegarden said. “The reason is simple: Moving out of California provides workers a significant increase in their purchasing power as well as a better quality of life.”
Wayne Winegarden
But it is not just families who are leaving.
“Another way high costs drive the state's population loss is through lost businesses -- businesses are finding it more difficult to compete in national and international markets while having to pay the ‘California premium’ for workers,” Winegarden said. “As a result, there is a growing trend of businesses, large and small, migrating away from the state. As businesses migrate away from the state, they take the jobs and families with them.”
A host of regulations contribute to the higher costs here.
“Zoning regulations and CEQA are constraining the supply of housing, driving up the costs for a home,” Winegarden said. “Greenhouse gas and environmental regulations have made gas and energy unaffordable. Mandates on businesses, such as AB5 or minimum wage laws, drive up the costs for everyday items. The combination of these mandates reinforces one another and make California a simply unaffordable place to live and work.”
Winegarden described how a tech worker can quit their job in San Jose and take a lower paying job in Austin and still afford a higher quality of life.
“Because their lower salary in Texas buys more goods and services than they can afford in California, the worker is happy to move,” Winegarden said. “The Texas firm has lower labor costs than their California competitor, so they can now compete more effectively. The Texas firm now has an easier time growing revenues and profits while the California firm's revenue growth faces greater challenges. This advantage helps the business community in Texas continue to grow and incentivizes a contraction in California's business sector.”
Winegarden is also the co-author of the recent PRI study California Migrating on the state’s growing outmigration problem.
“This scenario, playing out over and over again, is what the population numbers are expressing,” Winegarden said. “Without change, California will tax and regulate itself into a much less prosperous future. It will take time, but it will happen without change.”