After three straight years of population decline, the California exodus may be slowing. But its impacts — from falling tax revenue to a loss of skilled workers — are still leaving their mark on the Golden State.
Fed up with high housing costs and other quality-of-life issues, and untethered from the office by remote work, California residents left in droves during the pandemic. Increased deaths and a steep drop in international migration due to COVID-19 restrictions also contributed to a population decline.
The state population shrank by more than 75,000 residents to just under 39 million people in 2023, a 0.2% dip from the year before, according to recently released census data. The decline was less than the 0.3% annual slide in 2022 and the 0.9% drop in 2021. Over the three years, the state’s population fell by 1.4%, or more than 538,000 residents.
While officials and experts believe a return to growth is on the horizon, there’s still plenty to unpack in the recent migration shifts and their potentially lasting consequences. Here are five charts that help explain who left, where they went and how much money they took with them.
California lost $29 billion in taxable income to other states
In 2021, fleeing California residents took billions of dollars in personal income to other states, according to a Bay Area News Group analysis of the latest available IRS data.
On a net basis, the Golden State lost $5.6 billion in residents’ taxable income to Texas alone. California also lost $4.4 billion to Nevada, $3.5 billion to Florida and $2.6 billion to Arizona. In total, the state lost $29 billion to other parts of the country.
A decline in taxable income undoubtedly played a part in California’s current budget shortfall of at least $37.9 billion, though stock market fluctuations that hammered wealthy residents’ investment returns were likely a bigger factor, said Jeff Bellisario, executive director of the Bay Area Council Economic Institute, a pro-business think tank. On Wednesday, Gov. Gavin Newsom announced his annual spending plan to close the budget gap.
Bellisario said it was unsurprising that Sunbelt states such as Texas and Florida, which became prime destinations for fleeing Californians during the pandemic, saw the largest gains. In addition to offering less expensive housing and a lower cost of living, many also boast growing tech sectors that have attracted high-income workers.
The five-county Bay Area region lost $1.2 billion in taxable income to Travis County, Texas, home to Austin, a burgeoning tech hub. The Bay Area also lost $747 million to Clark County, Nevada, which includes Las Vegas, another upstart Silicon Valley rival.
“The big concern you have is that some of the population moving out are the future entrepreneurs and the people who are going to be starting businesses,” Bellisario said. “Everybody wants a piece of what San Francisco or Silicon Valley has.”
More than 800,000 fled the Golden State annually during the pandemic
In 2021 and 2022, more than 800,000 residents packed up and left California in each of those years for other parts of the country, according to the latest available census data.
Compare that to 2018 and 2019, the two years before the pandemic hit, when 650,000 to 700,000 people left the state each year. Data for 2020 was unavailable.
Which states siphoned the most residents away from California? The usual suspects: Texas, Arizona, Florida, Washington and Nevada.
Those states also saw among the largest increases in California migration compared to pre-pandemic years, though none experienced nearly as big a spike as Idaho. The Gem State, a new hotspot for Silicon Valley billionaires, saw the number of incoming Californians surge by 191% from 2013.
But the data also shows fewer California residents left in 2022 than the year before, a trend experts expect should continue. And with international migration returning, the state’s population woes could soon subside.
“As we turn the page to 2024, the data is pointing less to an exodus and more to population stabilization across California and the Bay Area,” Bellisario said.
A California brain drain?
During the pandemic, more people with graduate or professional degrees left California than arrived from other parts of the county, a remarkable reversal for a state with a powerhouse economy and world-class universities.
According to the latest available data from the Brookings Institution, a nonprofit public policy organization in Washington D.C., roughly 30,200 more people with advanced degrees left California than arrived in 2021. In 2018 and 2019, the numbers were about equal. The data does not account for international migration.
For most of the past two decades, California has had more U.S. residents leaving than coming to the state, largely driven by the departures of less-educated and lower-income residents. But with the freedom of remote work and more high-paying jobs available in different parts of the country, highly educated workers have increasingly looked elsewhere.
“Places that couldn’t attract talent before are opening up roles and willing to pay more for more experience,” said Anna Jacobi, 51, a San Francisco tech product manager with multiple advanced degrees who’s considering moving to Texas or Florida for work.
Some of the state’s largest companies have also moved out. California-born companies, including Tesla, Oracle and Hewlett Packard Enterprise, all opened new headquarters in Texas over the past few years.
Yet in 2022, more highly educated workers came to California and fewer left than in 2021, according to the data. William Frey, a demographer with Brookings, said that’s evidence the trend, like other recent migration shifts, could be reverting to a pre-COVID norm.
“It’s too soon to tell what’s permanent and what’s a pandemic effect,” he said.
