Monday, October 25, 2021

What escape? California Has Serious Attraction Problems

Imagine a business that has the best customer retention, but the worst performance to attract new customers.

What do you think this venture should do to reverse its shrinking growth?

Dear Readers, This is California’s Interstate Migration Challenge.

Now, many people are tired of hearing this from me, but California has a serious attraction problem – not a huge population exodus.

Let me reiterate: In the 10 years ending 2019—the latest Census Bureau migration data available—the state lost 6.2 million residents to other states. But when you measure that outflow against the population of the largest state in the country, it equals the annual exit rate. of 1.6%.

This is the nation’s lowest rate of residents leaving the state, a few decimal points ahead of Texas. How much better can California do?

At the same time, 4.9 million people moved to California. This adds up to a 1.3%-a-year chance that you’re new neighbor is from another state—the country’s worst attrition rate. Texas had an attractiveness rate of 2%, which was the 11th worst! So, there is room for improvement, no?

Yes, I know California had the most departures between states, a figure that sparks a lot of exodus talk. This chatter has heated up in recent years as the state’s overall population growth has stalled.

But there are plenty of culprits for the rising population figures, including renewed hostility toward foreign immigrants – 2.9 million came to California in 2010-19, more than any other state – as well as a ridiculously low birth rate, and 69,000 pandemic deaths.

Let’s also not forget that only two states — Florida and Texas — had large numbers of out-of-stateers moved.

no easy answer

These numbers are not a play on words or defense of my state. Instead, the data reveals a critical policy flaw that is largely overlooked by a wide spectrum of voices: who is really working to move people here?

It’s likely that serious promotional efforts have been sidelined because there’s no easy answer to California’s marketing puzzle.

For example, low departure rates show us that people are contained in the state. Such consistency, however, helps to explain the powerful “NIMBY” mentality fighting new ideas that may appeal to out-of-staters.

To be fair, the state does a decent job of attracting big-payers who were previously residents in other expensive cities. It’s tied to a limited, upscale audience, in large part, thanks to the state’s trend-setting tech industries.

Tell me what my trusty spreadsheet found when it analyzed 10-year census migration data and compared state-by-state costs from the Bureau of Economic Analysis.

I divided the states into two groups – deals with below average cost of living and expensive ones with above average cost.

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Over the decade, 35 low-cost states became home to ex-California’s 4.47 million, while 3.24 million left the low-cost group for the Golden State. That’s a net loss of 1.23 million residents in California’s less-expensive locations.

This is in stark contrast to the migration pattern in the 15 expensive states – Hawaii, Washington, DC, New York, New Jersey, Maryland, Massachusetts, Connecticut, New Hampshire, Alaska, Washington, Virginia, Vermont, Colorado and Delaware.

In 10 years, 1.67 million left these expensive living spaces for the Golden State, and roughly the same number became pre-California. Well, there were 771 more departures than arrivals.

price is wrong

It’s a good guess that issues of dollars and cents lead to many goodbyes from Californians.

We are not talking about the difference in the size of the money. When my spreadsheet combined population flows and overall cost indices, bargain states were 17% more affordable than California.

That exemption was largely about putting a roof over one’s head. By the bureau’s cost-of-shelter benchmark, housing costs in low-cost states were 40% less than those in California.

That’s why it’s so hard to attract Americans to California. For example, who would trade for the fifth most valuable state among the country’s most affordable places according to the Bureau?

California’s attempt to fix the headache of living-off often creates some messy policy issues.

Lead the state home building for affordable housing options.

Does such an effort squeeze out more luxurious accommodations – reducing the attractiveness of expensive places to people? Or will Californians benefit from cheaper homes, leaving more out? Or perhaps all the new supplies are being made by people seeking a financial incentive to move here?

Yet, despite California’s faults, there are things to do besides spectacular climate, culture, and scenery.

View job opportunities. Employment in those expensive states grew by 15% in 2010, an increase of 18% in the cheaper states. In California, jobs increased by 21% over the same period, gaining 3 million new jobs, the largest recruitment spree in the nation.

California’s appeal may also be tied to larger paychecks. For California, household income over 10 years outperformed salaries in low-cost states by 11%.

The Golden State has forever presented financial dreams. While its jobs and wages can’t fill the cost gap with other states, it’s a financial gain worth selling — if the state is ever in a marketing mood.

Jonathan Lancer is a business columnist for Southern California Newsgroup. He can be contacted at [email protected]

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