Joel Kotkin and Marshall Toplansky produced a sobering report for Chapman University on the plight of California and its prospects for the future. It might be more accurate to refer to “the Californias”, plural, as the report describes two Californias.

The state is blessed with immense natural resources and generates riches that make Croesus seem a pauper. Yet, the wealth is far from evenly distributed.

According to the state’s Legislative Analyst’s Office, 20% of state wealth is held within 30 zip codes that account for just 2% of the population. Less than 33% of state wealth is held within 1,350 zip codes that house 75% of Californians. Since the 1970s, California middle-class incomes, once ebullient, have stagnated.

Even before the pandemic, California experienced lower growth than the other states it competes with for business and people. The most glaring losses have been in well-paying blue collar jobs. Even without adjusting for costs, no California metro ranks in the
US top ten of well-paying blue-collar jobs. But four—Ventura, Los Angeles, San Jose, and San Diego—sit among the bottom ten.

You might think that being a tech center would make California immune to disruption at the higher end of the scale, but that may be changing.

There is much controversy over the extent and importance of business flight from California, but the most recent evidence reveals that the tide of business headquarters leaving the state is accelerating. A 2021 Hoover Institution report presents a compelling set of data about recent business behavior. From January 1, 2018, to June 30, 2021, 265 companies moved their headquarters
out of the state, an average rate of 6.3 per month. The speed of exodus accelerated significantly (to 12.3 per month) in the six months from January through June of 2021.

Most of these firms departed from the Bay Area and Southern California, the state’s premier urban areas. Where did they go? Five states—Texas, Tennessee, Nevada, Arizona and Colorado… Since the beginning of 2018, some 107 companies have moved their headquarters to Texas from the Golden State.

While the über-wealthy bunker down in their coastal, leafy enclaves, the people the Left claims to care oh so much about are sinking.

Even as the state continues to churn out billionaires and millionaires, immiseration impacts all four of the state’s largest racial/ethnic groupings. Incomes for white (only) non-Hispanics, African Americans (only) and Hispanics all rank 48th to 50th in the nation. Asians (only) rank by far the best, but still are only 35th. When costs are added to the calculations, the ranks of poor Californians swell an additional 1.7 million, about the combined population of the state’s second and fourth largest cities, San Diego and San Francisco.

Energy prices, now rapidly increasing, hit the poor particularly hard. Between 2011 and 2020, the state’s home energy affordability gap rose by 66%, while falling by 10% in the rest of the nation. Nearly 70% of all California households with unaffordable housing costs are occupied by people of color. Black and Latino households are already forced to pay from 20% to 43% more of their household incomes on energy than white households do. In 2020, over four million households in California (30% of the total) experienced energy poverty.

Not surprisingly, people are voting with their feet.

Once a beacon for minorities, California is clearly no longer a primary destination for the groups who will account for a growing percentage of our population. California also seems to be losing some of its global allure. Net international migration to the state peaked in 2015 at 154,000 and fell to 29,000 by 2020. Los Angeles and San Francisco were once beacons for people from abroad, but increasingly the big migration hubs are in Dallas-Fort Worth, Nashville, Houston and even some Midwestern metros. Looking more broadly at the foreign born, including those who have been in the country for decades or more, California also lags.

But since 2000, California has lost 2.6 million net domestic migrants, more than the current combined population of San Diego, San Francisco and Anaheim. In 2020, California accounted for 28% of all net domestic outmigration in the nation, about 50% more than its share of the US population.

More than one half of this loss—1.9 million—has been from Los Angeles County, but 36 of the state’s 58 counties also have experienced net domestic migration losses over these last two decades. In 2020, according to census estimates, the state lost population for the first time in its modern history.

What this portends for the future might lead one to despair. As those who produce wealth leave or are otherwise stifled by the state’s high cost of living, the ability for the welfare state to support the poor left behind is undermined. Decreasing resources and a weakening safety net is a recipe for social unrest. California is also an agricultural cornucopia. What happens if the state can no longer fill the grocery shelves like it once did?

It would seem folly to look to the state’s Democratic Party for answers. The Left firmly rules the state and is in no small way responsible for the policies that have put the state in the predicament it is in. And so far, remarkably, things haven’t gotten bad enough in the state for voters to throw the bums out.

A crumbling California has implications for the rest of us. It may be tempting to stand on the sidelines and jeer and leave California to stew in the mess it made for itself, but the same Leftist impulses that have lost this paradise are at work elsewhere in the nation. Though, if a good may come of it, it would be to serve as a warning for other states not to travel down the same road. We might meet travellers coming from an antique west who tell the tale Shelley heard…

Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal, these words appear:
My name is California, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away
The lone and level sands stretch far away.

This entry was posted by by Jeff Kouba on Thursday, April 14th, 2022 at 11:00 am and is filed under Socialism American Style. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.