Steep Drop in Migration to CA a Troubling Sign for the Economy

A big part of California’s economic success over the decades is the migration here of top talent from other states and other parts of the globe. New arrivals help give the state a vibrant labor market and workforce, providing a steady flow of talent which is critical to a healthy economy. So new research released this week (Dec. 15) by the nonpartisan California Policy Lab at UC Berkeley offered sobering data highlighting a sharp decline in out-of-state arrivals. The study found that “people moving to California from other US states has dropped 38% since the start of the COVID-19 pandemic. Meanwhile, the number of Californians leaving to other states has increased by 12%, which is in-line with exit trends before the pandemic. Taken together, these two trends mean that population loss due to domestic migration has more than doubled since the beginning of the pandemic.”

The Bay Area suffered the steepest declines, with 45% fewer people moving into the Bay Area from other US states as compared to the beginning of 2020. The study did not explore the possible causes for these precipitous declines, but we suspect that a continuing housing shortage and affordability crisis, growing homelessness, spiking crime, worsening impacts from climate change (drought, wildfires and extreme storms), and persistent economic inequality are all culprits. As we look ahead to a new year, the Bay Area Council is putting more energy and resources into addressing these critical issues and restoring California as a destination for top talent.