The California Exodus Is Real

California has morphed from a land of limitless opportunity to a highly regulated land of limits and control. No wonder so many people are leaving.

From a real-world perspective, the recent news from the California Department of Finance isn't really a big deal. The state's population, which has for years been inching ever so slowly toward the 40-million mark, actually dipped by 182,083 people last year. It won't mean anything for the budget, public policy or our individual lives.

Yet, as CalMatters columnist Dan Walters wrote, "national news organizations went a little berserk" after seeing that statistic. "For the first time in more than a century, California recorded a net loss in population last year, a demographic reversal caused by the deadly toll of the coronavirus and declining immigration and birthrates," The New York Times reported.

Of course, these trends have long been obvious, as Walters and others have noted. But the news was a gut check for state officials—and for Californians' self-esteem. The Golden State has long beckoned people from across America and the globe. That concept is in our DNA—the idea of leaving behind encrusted communities and coming here to start anew. No wonder so many people were shocked by this reversal of fortunes.

The California Dream—a land "of instant wealth, won in a twinkling by audacity and good luck," as one historian put it—took hold during the Gold Rush for obvious reasons. After James W. Marshall in 1848 spotted gold flakes at the sawmill he was building along the South Fork of the American River to serve John Sutter's settlement in Sacramento, it sparked what History.com calls the "largest mass migration in U.S. history."

California's population more than tripled in the following decade. It continued its upward trajectory and spiked dramatically following the end of World War II and the creation of the Cold War-era defense industry. Growth slowed quite a bit in recent decades. When I moved here in 1998, the state's luster already had tarnished—and many Californians had already been building their dreams in Texas, Nevada, and elsewhere.

Nevertheless, the population still grew by a whopping 7 million people in the past 23 years. There are plenty of reasons for the recent drop. Immigration, which had soared by 37 percent in the 1990s, has slowed to a trickle. Birth rates, which had driven our modest gains in recent years, also have fallen—making up for the state's continued outmigration of residents. Coronavirus has taken its toll.

State officials predict a quick return to modest growth rates, but this isn't primarily a story about slight population changes. It's about a change in policy and attitudes. The latest news is a benchmark showing that California no longer is the magnet that it had been. Quite simply, California has morphed from a land of limitless opportunity to a highly regulated land of limits and control.

"All of a sudden I saw all these California books: diaries, memoirs, journals, histories, bibliographies," said the state's late historian Kevin Starr, as he explained what drew him back to California from Harvard. "(A) kind of enchantment overtook me, a kind of beguilement, a kind of reverie, definitely a physical reaction in the days that followed." How many Americans still feel that sense of enchantment?

Expect the usual blather from the usual suspects. Lawmakers will remind us that California remains the world's fifth-largest economy and that California's tech industry is booming—as evidenced by an astounding $75.7 billion budget surplus in the midst of the pandemic. Even the budgetary good news, though, hides an ugly truth.

Because of our steeply progressive income-tax structure, revenues don't reflect overall wellbeing as much as they spotlight the success at the top of the economic spectrum. Even before COVID-19, California had the highest poverty rates in the nation based on the Census Bureau's cost-of-living-adjusted standard. Last year, 135,000 more Americans left the state than came here. The California exodus is a real phenomenon.

If you are a regular reader of these editorial pages, you know about the state's myriad challenges (all of which predate the pandemic): median home prices of more than $750,000 statewide and above $1 million in some metro areas; an exploding homeless crisis; crumbling infrastructure; water shortages; lousy public schools; growing crime rates; and various governmental scandals.

Every one of these problems is the result of long-standing state policy. You'll rarely hear a state leader talk about opportunity—or admit that California has been actively chasing people away. It remains a great place to live, but only for those who already have achieved their dreams. The weather's nice, but the political climate is chilling—even if the governor remains in denial.

Population statistics are now finally catching up with reality. So, sure, the state's first population drop in a century doesn't change anything of substance—but it should change the way Californians view ourselves. We've gone from "California dreaming" to "California leaving" and all the budget surpluses in the world won't fix it.

This column was first published in The Orange County Register.