ORANGE, Calif., Feb. 15, 2022 (GLOBE NEWSWIRE) -- Once a bastion of hope and innovation, the long-sought California dream is beginning to fade as creatives, inventors and younger Californians seek economic opportunity in other parts of the country. In the report recently released by the Center for Demographics and Policy at Chapman University, key economic and demographic trends point to troubling developments that need to be addressed:
Corporate Exodus:
- California saw a significant drop to 46th in the nation for new capital projects that employ thousands of people and support the local economy; Ohio gained 14 times more new capital projects and Texas experienced 10 times the rate compared to California
- Of 125 CEOs of California-based companies surveyed by the report authors, one-quarter are “seriously” or “definitely” planning to move their businesses out of state
- California has the most regulatory restrictions of any state in the country at 396,000, compared to Idaho with one-tenth the number of mandates at 39,000, the lowest in the nation
Sector Contraction:
- California’s largest decrease in per capita job growth was felt in the manufacturing sector; every state, except Tennessee, has surpassed California’s growth in this area over the past 20 years
- Innovation jobs, which bear an outsize weight in shaping California’s ‘brand image,’ have trailed behind the growth in Washington, Colorado and Utah on a per capita basis over the 10 years
- Texas and Georgia more than doubled California’s job growth in creative industry employment (including the entertainment sector) with the addition of 33,565 and 35,086, respectively, compared to just 15,369 jobs added in the Golden State
- California’s leisure and hospitality industry enjoyed growth between 2010 and 2019 with the addition of approximately 500,000 new jobs, and reached more than 2 million total jobs in this sector by 2019; However, that progress was reversed by the COVID-19 pandemic and fell by 700,000 jobs to just 1.3 million total sector jobs by mid-2021, below its employment in 2000; By contrast, Nevada, Texas and Florida, three other states with heavy leisure and hospitality employment, saw COVID-19 declines, but not to the same extent
Community Exodus:
- During the last 20 years, California has experienced 2.6 million net domestic migrants, a population loss equivalent to the populations of San Diego, San Francisco and Anaheim combined. Losses are increasingly concentrated among middle income people in child-rearing years
- California’s population is now stagnating or declining, and is aging faster than the rest of the country; The state’s working age population – once larger than other states – is now expected to shrink more rapidly than the nation
Housing Crisis
- California housing prices are 93% above the national average, and rents are 47% higher than the national average, when adjusted for income; in major coastal areas the prices are 123% and 79% higher, respectively
- More than 70% of Californians surveyed consider the state’s housing costs as “a very serious issue,” and more than 50% are considering a move out
“The California dream so many came here to achieve is dying,” said Joel Kotkin, study co-author and director of the Center for Demographics and Policy. “Instead of an influx of youth and innovation, we are seeing our younger residents, especially in their 30s and 40s, exiting the state right at the time when they would typically be buying homes and starting businesses, essentially at the point of their greatest potential for economic contributions.”
The report also includes myriad proposals for actions California state leaders can take to stymie the state’s outmigration crisis, including a recommendation to create a Housing Opportunity Zone in San Joaquin and Sacramento Valley counties, from Shasta to Kern; San Bernardino, Riverside and Imperial counties; and the Antelope Valley (Mojave Desert) portion of Los Angeles County, and using a state borrowing authority to help middle- and working-class people purchase homes at prices they can afford.
“The success that California has experienced is not sustainable when nearly 80% of all jobs created in the state over the past decade paid less than the median income,” said Marshall Toplansky, co-author and clinical assistant professor of Management Science at the Argyros School of Business at Chapman University. “High housing prices and the relocation of many good paying jobs out of state are robbing California of its middle class and its place as one of the top global economies.”
Restoring the California Dream was co-authored by Kotkin and Toplansky through the Center for Demographics and Policy at Chapman University. A PDF of the full report is available to download here.
About the Chapman University Center for Demographics & Policy
The Center focuses on research and analysis of global, national and regional demographic trends and also looks into policies that might produce favorable demographic results over time. The Center involves Chapman students in demographic research under the supervision of the Center’s senior staff. Students work with the Center’s director and engage in research that will serve them well as they look to develop their careers in business, the social sciences and the arts. They also have access to our advisory board, which includes distinguished Chapman faculty and major demographic scholars from across the country and the world.
About the report authors:
Joel Kotkin (co-author) is the Roger C. Hobbs Presidential Fellow in Urban Futures at Chapman University and director of the Center for Demographics and Policy. He is the author of ten books, including most recently, The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He writes regularly for Newsweek, the Daily Beast, the Los Angeles Times, Spiked, The Unherd, Tablet, Quillette and National Review. He also is executive director of the Urban Reform Institute and a fellow with the Claremont Institute.
Marshall Toplansky (co-author) is Clinical Assistant Professor of Management Science at the Argyros School of Business at Chapman University. He is a research fellow at the Center for Demographics and Policy and is director of the school’s Analytics Accelerator program. He and co-author Joel Kotkin recently published an economic and social policy brief entitled, “California Feudalism: The Squeeze on the Middle Class.” He received a BA degree from SUNY Albany and an MBA from Harvard Business School.
