It’s long been said that California is where people can see the United States’ future. In reality, the Golden State seems to be in slow, steady decline.
But this pattern is an acceleration of long-term trends. More people have been leaving California than arriving for many years. California’s Legislative Analyst’s Office found that the state had lost a net 1 million people to other states between 2007 and 2016. Its population had increased only because of births and international migration. The latter category is key for the state’s growth. In 2017, 28 percent of California’s population was foreign-born, nearly double the percentage that had been born in other states.
The pandemic throws stark relief on these trends. If remote work is the wave of the future — and Facebook’s recent announcement that it will allow all employees to apply for permanent remote work suggests it is — then why move to California and groan under its absurdly high cost of living?
The median price of a home in the state is expected to exceed $800,000 in 2022, and the median price in Santa Clara County (also known as Silicon Valley) is $1.3 million. Median-priced houses in nicer areas with high-quality schools such as Cupertino or Palo Alto run between $2 million and $3.2 million, all for old homes with roughly 2,000 square feet of living space.
There are many other reasons to avoid the Golden State. Homelessness is often exaggerated, but there’s no denying it’s a real problem in many areas of the state. The average gallon of gas costs $4.67, nearly a $1 more than neighboring states and pricier than even in Hawaii. Crime is up, and regular news reports of smash-and-grab burglaries in San Francisco help fuel the sense that the state is out of control. Add in the nation’s eighth-highest state and local tax burden, and it’s no wonder more residents are saying “no thanks” to California.
History shows it’s hard to get out of a downward spiral once it starts. New York was once the nation’s cultural and economic hub, but it started a slow decline in the 1950s. Its large size masked the trend for a while, but New York slowly lost population compared with other states as people and companies voted with their feet. The Empire State had 45 representatives in the U.S. House in 1940, but they lost two members in each of the following three decades. The bottom fell out in the 1970s, with rampant crime and New York City’s bankruptcy combined with the deindustrialization of much of Upstate New York producing an exodus. The state’s population dropped by nearly 700,000 people, costing it five congressional seats after the 1980 Census.
That’s already starting to happen to California. It lost population for the first time in 2020, dropping by nearly 200,000 people. Most observers want to believe that won’t happen again, but the thing about tipping points is that they are difficult to see in advance. Even if the drop does reverse, there’s no reason to think the state will resume its rapid, 20th-century growth. The best-case scenario for California seems to be that it will be like mid-20th-century New York — slowly sinking from its own excess and neglect while still giving off a veneer of splendor.
If California is the new New York, Texas might be the new California. It has exploded over the past 50 years, gaining 15 congressional seats since 1970 and moving from the sixth-largest state in 1960 to the second-largest one today. It attracts people from other states, gaining nearly a net 2 million people between 2000 and 2019. Much of that growth comes from California, which isn’t surprising given that the median price for a home in the Lone Star State is still less than $300,000 despite large increases since the pandemic began. With the 47th-lowest tax burden and gas prices under $3 a gallon, California expats can live large and still save money.
California will remain important, much as New York has despite its decline. But the writing is on the wall: California’s influence has peaked.
