People still flock to California, despite high costs

As a follow-up to my post earlier this week…

Don’t Buy the Hype; California is Still a Top Destination for Homeowners

Source: Orange County Register

I tend to believe the idea that larges masses of Californians are moving out of the State may be a bit overstated.  California certainly has its faults, notably a high cost of living and steep educational and professional requirements for many of its fast-growing professions. But the latest Census Bureau data actually shows California’s per-capita out-migration percentage to be among the lowest nationwide.

Home for sale in Dana Point. Click photo for details.

When the Census Bureau recently reported California had a “negative out-migration” to other states – 129,233 in 2015, largest since the recession ended and second largest in the nation – many people said “I told you so.” But when you account for California’s largest-in-nation population (38.7 million in 2015), you find the net departures equal a barely perceptible 3 folks leaving us per 1,000 residents. (And by the way, 14 states performed worse.)

California did lose 3.5 million people to other states in the 2010-2015 period. People move. And big states will lose plenty of people, no matter what. But that number is tiny in comparison. Remember, California is huge. So, that outflow of 3.2 million folks translates to an average annual 1.55% of California residents moving out of state during the 2010-15 period. No state had a lower per-capita movement rate than California. Yes, we Californians are the least likely to move out! Next best state for keeping its citizens? Texas at 1.6 percent annually, then Ohio and Michigan at 1.8 percent.

So how does California consistently have significant net out-migration to other states? We’re definitely not good at attracting people from other states. California took in 2.9 million people from other states in 2010-15. Only Florida (3.2 million) and Texas (3.1 million) had more. But look at arrivals on a per-capita basis and you’ll see that in those six years California got new residents from other states at a yearly rate averaging 1.3% of its population. That’s well below the U.S. rate 2.3 percent of residents moving interstate and the worst in the nation, with Michigan and New York next at 1.4 percent.

So how does California’s population grow if we’re not attracting fellow Americans?

Well, new babies help, but the state’s birth rate is historically low. The real secret is California’s attractiveness to folks from foreign lands. In 2010-15, California totaled 1.7 million new residents from outside the U.S. That’s well ahead of Texas, 1.2 million, and Florida, 1.1 million. Foreigners added to the population at a 0.76% annual rate since 2010, a pace running above the nation’s 0.6% rate and 8th highest in the Union over that span.

California may look crowded and costly to other Americans. There’s a different view in the rest of the world.