After World War II, California was where Americans went in search of a better life—the state with more jobs, more space, more sunlight, and more opportunity. But since 1990, Californians have gone elsewhere for opportunity, with the state losing a net of more than 3.7 million people to other states.
n the national recovery or slow slog since the economy bottomed out roughly three years ago, even California has regained some ground. As of this August, according to the Bureau of Labor Statistics, it has added more than a half million jobs since its payroll totals hit bottom around the end of 2009.
It seems natural these days to assume that the Golden State is the sick man of the U.S.—so if even California is coming back, however weakly, perhaps the recovery is real.
As recently as the 1980s, California still had the aura of an unstoppable growth machine, and such a view would have been unthinkable. Now, Texas is the object of economic envy and California is the object lesson, the toxic state.
It's a partisan narrative to be sure, with Republican-run Texas as a low-tax, right-to-work mecca for business. But propaganda aside, though, there is statistical reality to the idea that Texas is rising and California is falling back. In 2000, California’s jobless rate was 4.9%, while the Texas rate was 4.4%. Ten years later, that half-percentage-point gap had widened to more than four points: 12.4% to 8.2%. Texas is also adding more jobs than California, which has 50% more people.
These figures help explain the findings of a new study I conducted along with demographer Robert Scardamalia for the Manhattan Institute’s Center for State and Local Leadership, The Great California Exodus: A Closer Look. During the first decade of the 2000s, according to IRS data on the movement of income-tax filers, California saw a net loss of 635,000 people and aggregate income of $14.7 billion to just three states—Texas, Arizona and Nevada. Texas was the leading destination, with about 225,000 Californians relocating there.
At the beginning of the decade, when California and Texas were fairly close in job production, movement between the states was close to even. About 35,000 Texans moved to California between the 2000 and 2001 tax years, and slightly fewer than 42,000 Californians moved to Texas. Five years later, Texas had gained a lopsided advantage, gaining about 72,400 Californians while losing about 31,200 Texans to the Golden State. At the decade’s end, the recession had dampened migration in all directions—people are less prone to move when fewer jobs are available to attract them. But Texas remained the far more popular draw, attracting 48,900 Californians while losing just 33,900.
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