California Continued to Shrink in 2021 – Pacific Research Institute

California Continued to Shrink in 2021


In 2021, as in 2020, the Golden State only continued to shrink. According to new data from the Department of Finance, California lost a startling 173,000 residents last year. As reported in the Los Angeles Times, 55,000 of those lost residents were victims of the pandemic, while a further 53,000 were international students returning home. Yet the largest single source of the population loss was families simply leaving the state.

For decades now, California has been a big loser on domestic net migration—that is to say, more native-born residents move out of our state than other Americans move in. To the extent that the California population isn’t yet in sustained decline, it’s thanks to new international arrivals, mainly from Latin America and East Asia. Yet with red states like Utah, Idaho, and Texas booming, it hasn’t been enough to keep up, such that we will lose a congressional seat for the first time in California history.

By now, it’s old news that Californians have been flooding into neighboring states like Arizona and Nevada—two of the fastest-growing states in the country. But the population decline that has been revealed by a pandemic-induced end to international migration should serve as a wake-up call to state policymakers. It reveals that, while California might be a perfectly fine place to start a new life in America, it’s not the type of place that many families want to stay.

The population change numbers are very much not evenly distributed: In inland parts of the state, like the Central Valley and Sacramento Region, populations are still booming. Meanwhile, otherwise prosperous coastal metropolises like the Bay Area and greater Los Angeles actively lose population. It seems like those Californians who don’t leave the state entirely are simply migrating from overpriced, overregulated areas to affordable, pro-growth areas.

Of course, Californians aren’t fleeing the Golden Gate City or the City Angels because they dislike the good-paying jobs or perfect weather—they’re feeling because they want to be able to afford a reasonable standard of living. In too much of the state, a thicket of regulations and taxes have made that impossible. For example, the median home in San Jose is now 3.8 times the median home in Bakersfield; not incidentally, the latter permits housing at a per capita rate at more than double the rate of the former.

Is the California Dream dead? It certainly seems. Where Americans once longingly looked west to California as a land of opportunity and prosperity—a place where anyone should show up and find a decent home and a good job—our state is increasingly trotted out as a cautionary tale. Across the Mountain West, locals eagerly proclaim their fear of Utah, or Arizona, or Oregon into California, as displaced Californians export our problems across the country.

The easy course of action here is to do nothing—to wait on international migrants to once again bail us out, or worse, to embrace stagnation. But we, as Californians, have a right to expect more of our leaders. Our state achieved greatness as a place where working- and middle-class families came to improve their lot in life. Now more than ever, it’s high time we contend with all the rules and regulations that make California such an unaffordable place for those exact families. If not now, when?

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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