Is California losing its luster? UC San Diego survey says no

There was no sign of exodus on Labor Day weekend in 2019 when thousands of beach-goers lined the coast at La Jolla Shores.
There was no sign of exodus during Labor Day weekend in 2019 when thousands of beach-goers lined the coast at La Jolla Shores.
(K.C. Alfred / The San Diego Union-Tribune)

The exodus of Californians forecast in recent news headlines isn’t likely to happen soon, UC San Diego researchers reported in survey results released July 7.

The survey queried more than 3,000 Californians, including 295 who completed the questions in Spanish. It found that nearly two-thirds of the residents still believe in the “California dream” of opportunity and prosperity.

The research is part of a multi-institution consortium led by the University of California to assess whether there is a “California exodus” and to help inform state policy and public knowledge by focusing on state population patterns.

“Over the winter there was an increasing narrative we kept seeing in the news media about people leaving California — focused primarily on wealthier Californians, the Elon Musks of the world,” said Thad Kousser, a professor of political science at UCSD and co-author of the study. “But what we were seeing was individual stories. We wanted to look at whether there was data behind those stories.”

Despite the impending loss of a congressional seat because of population growth that has stalled since 2017, the researchers found no unusual surge in Californians planning to move out of state.

Researchers mined data from the U.S. Census, credit histories, homeownership rates, venture capital investments, internet search records and the state Franchise Tax Board to understand which Californians are likely to remain and which are contemplating leaving.

“Put another way, who still sees the California dream as working for people like them, and who sees the Golden State as tarnished?” the researchers asked in their report on the survey.

Less than a quarter of survey respondents — 23 percent — said they were seriously considering leaving the state. That’s slightly lower than the 24 percent who said they might move in a 2019 survey conducted by UC Berkeley.

The percentage of people contemplating moving from San Diego and Orange counties was lower than any other region of the state at 17 percent, down from 23 percent in 2019.

In the Central Valley and Northern California, however, the number of people considering a move had risen since 2019, to 29 percent and 37 percent, respectively.

Though the 2019 Berkeley survey showed a wide disparity between political parties on the question of moving out of state, the new survey found that the split had narrowed.

In 2019, just 14 percent of Democrats planned to move from California, compared with 40 percent of Republicans. In the recent study, 21 percent of Democrats and 30 percent of Republicans were seriously considering relocating.

“That’s interesting and surprising to us,” Kousser said. “It may indicate that in 2019 the conversation about leaving the state was driven by politics and ideology. And post-pandemic, it may be driven more by people’s reality and circumstances. The lives of Democrats and Republicans alike have been affected by the pandemic.”

Ethnicity and income appeared to influence respondents’ opinions. White and middle-class Californians were more likely to be apprehensive about their futures in California than other demographic groups, whereas high numbers of young adult respondents, Spanish speakers, Latinos, African Americans and Asian Americans said they still see California as golden, according to the survey.

Seventy-five percent of respondents ages 18-24 said they believe the California dream “still works for people like me,” while 57 percent of people ages 45-64 and 59 percent of those 65 and older felt the same.

Of the youngest survey participants, 59 percent said they believe the state will be a better place for today’s children, compared with 30 percent of those 45 and older.

Among the wealthiest respondents — those with incomes above $150,000 per year — 59 percent thought their children will inherit a better state. Forty-two percent of those with incomes below $25,000 per year believed that as well. Thirty-two percent of those with incomes between $50,000 and $75,000 were similarly hopeful.

Kousser said it may be that the wealthiest respondents are living the California dream already, while low-income participants hope to achieve that. Middle-class Californians are squeezed by the housing shortage and may look to buy homes elsewhere, he said.

Nearly half of African American, Asian American and Latino respondents said they believe the state will be a better place for their children, while 59 percent of Spanish-speakers felt the same. Thirty-seven percent of White survey participants said they believe that.

Kousser said respondents’ answers appear to mirror California’s changing demographics. “We see that the fastest-growing groups are the ones who see California being a better place for their children,” he said. “The ones still on the rise are the ones who still believe the California dream.”

Another facet of the study, conducted by Stanford and Cornell universities, analyzed two decades of Franchise Tax Board data and found no evidence that millionaires are fleeing the state, despite increased taxes on high-wage earners.

A separate analysis from Cornell gave a different spin to the parable of the Golden State. It showed that California’s share of U.S. venture capital dollars rose from one-third of the national total in 1995 to nearly half by 2021, far eclipsing other large states, including New York, Florida and Texas.

In the first quarter of 2021, California’s share of venture capital funding was 48 percent, the study reported. New York received 15 percent of such funding for that quarter, and Texas and Florida received 2 percent each.

“Policymakers, including those trying to prevent an exodus, should focus more on those who are not as optimistic about the state’s direction, including many in the middle class facing steep housing costs and people from areas of the state facing the greatest economic challenges,” Kousser said.

UC Regent John Perez said “our efforts have produced a clearer picture of who perceives California as the Golden State vs. a failed state.”

“The empirical data will be at once disappointing to those who want to write California’s obituary, as well as a call to action for policymakers to address the challenges that have caused some to lose faith in the California dream,” Perez said.

— City News Service contributed to this report.