SoCal’s $1.6Tril Economy Bigger than 18 States Combined
Has the state learned it can’t tax can’t itself to prosperity? Probably Not!
But California May be Able to Grow its Way out of the Deficit.
Higher education leads to higher-paying jobs and bigger paychecks for those agents who can connect with these buyers and sellers.
State Still Attracting the Higher Earners
By Terry Castleman and Ashley Ahn
Despite California’s high cost of living, the state has continued to attract more educated and well-paid residents.
New census data discount the notion that California’s housing and affordability crisis is pushing away educated residents, resulting in a so-called brain drain.
16 CA Colleges Among Top 100 In Nation: US News Rankings
The numbers suggest California’s strong economy in such sectors as technology, medicine, and entertainment, as well as its admired higher-education network, continues to draw people.
But some factors — notably, high housing prices — could still send people out of California to places where their incomes and degrees buy them more.
U.S. NEWS: 11 CA High Schools Crack Nation’s Top 100
In 2022, according to census data, almost two-thirds of those who moved to California from another state had a bachelor’s degree or higher, as did more than half who moved from other countries.
Though the state’s population declined between 2021 and 2022,
the data show that the number of people with a bachelor’s degree rose by 1.6%, and those with a graduate degree rose by 2.6%. The number of Calif. over age 25 with less than a college degree shrank by 1.4% in the same span.
New transplants from other states are skewed toward higher education, with nearly as many graduate or professional degree holders — 91,000 — coming from different parts of the U.S. as those with bachelor’s degrees: 105,000.
Those who arrive from other countries are also disproportionately educated, though that group includes more people with lower incomes and education.
According to US census data, 28% of those who arrived in California from abroad were below the poverty line in 2022, compared with 12% statewide in 2021.
Hans Johnson, a senior fellow with the Public Policy Institute of California, said that over the last five years, California has experienced a net loss of college graduates in its exchanges with other states.
Johnson described this as a “reversal of the long-standing pattern.”
Note: In a state of 39.5 Million, it’s a Rounding Error. NOT a Migration
As the population drops in the California departure, the loss of educated residents “has abated,” he said.
At its highest, the peak was “a pretty notable number” of almost 90,000 more college grads leaving than arriving. In 2022, the outflow decreased to a net loss of just over 30,000.
The loss of educated workers led to discussion of a possible “brain drain” amid the state’s broader population woes. But Johnson said that after some Covid disruption, the state’s previous pattern of attracting educated workers is starting to re-emerge.
“California has long tended to attract young college graduates” in their early 20s “who are just starting” their careers, he said, and “that group is net positive again.”
The state economy has “grown most rapidly for highly educated workers” and rewarded those workers with high wages, he said.
“They’re coming knowing that housing is going to be more expensive,” but with skills and jobs that allow them to afford it.
This movement counteracts another piece of the population puzzle: the loss of high-income Californians and their tax revenue.
Data from the IRS show that in 2020 and 2021, those who moved from the Golden State to such places as Florida and New Hampshire had far higher incomes than the median Californian.
Experts said that educated people who arrive in California and students on their way to higher-paying jobs could help compensate for that deficit.
