Californians are Leaving for Texas and Washington

Each and every day, a new woke government setback hits California, so much so that even its cherished tech sector is weakening and people are leaving the state.

The Golden State we all loved has been decimated by Democrat, woke-driven ideology, and pro-China investment and trade strategies combined with Biden’s open borders initiative. It’s been significant part of the decline of America in the last 30 years. Other states too are seeing big outbound migration.  And some well-run states are seeing big numbers of migrants from California and other high-cost blue states. The life the Democrats created features high prices, high debt, regulations, infrastructure projects that never get finished, and pro-China sentiments–nothing good for creating a great country.

With Trump now in office, we’re seeing California and New York as the last bastions of lingering Democrat politics. Let’s look further at why Californians are leaving the state.

California Leads in Outbound Migration

According to a Newsweek report, the Golden State lost 239,575 residents to other states, the largest net domestic migration loss in the country over the past year. That surpassed New York which lost 120,917 residents. Californians continue to leave the state while illegal migrants without skills or appropriate education pour in.

According to a report from StorageCafe, about 51K Californians — roughly 140 people exited per day to Washington state in 2023 and most of them were high-earning millennials. That represents a significant loss of talent, productivity and businesses. Based on data from the U.S. Census data, mid to higher level income millennials are the main age group making the move, accounting for nearly 35% of newcomers to Washington. These individuals enjoy a yearly salary of $90,000 per year, significantly outpacing the national millennial average of $59,000. Between 2022 and 2023, about 94,000 people moved from California to Texas, a slight decrease compared to the previous year, when more than 100,000 Californians relocated there.

Highest cost of living – CA is in the top 5 for highest statewide cost of living, with no end in sight.

Why would so many people want to exit California? Well, the list is extensive but let’s cite the most obvious:

• Excessive business regulations – startups may launch in California, but their businesses are aimed at other states and countries, because doing business in CA is near impossible. Extra startup funding is needed for excessively high labor costs, real estate, tax and regulatory compliance in the state.
• High taxes – state and local taxes are oppressive forcing residents to flee to other low-cost states which in some cases have no income tax (Texas).
• Dependency on Federal Government handouts – Trump is reducing those handouts and cutting funding to bloated scam projects such as the 16-year old high-speed train, where just a short section now is plausible.
• High-cost labor – although a higher minimum wage is excellent for Californians (helps them pay rent), rising wage costs make the state less-competitive. However, CA’s high incomes fuel inflation.
• High real estate costs – unbearably high real estate costs driven by local NIMBY organizations, local greedy municipalities (who need the tax dollars for their oversized employee base), anti-housing regulations and state taxes, added to inflation in materials and land prices, means most Californians cannot afford to live in the state. Housing construction is very low which hampers the economy and keeps home prices unrealistically high. See more on the Los Angeles housing market and San Diego housing market.
• High unemployment – at 5.3% unemployment, California is among the 3 highest, and it’s been high for several years now.
• Babyboomers retiring — 15% of the state’s total population was age 65 or older in 2020 and they continue to retire at a high rate, living on pensions and the state is losing their expertise, which new foreign immigrants can’t replicate.

What many Californians and business people realize, is that California is firmly under the control of the Democrats and their economic and social policies. That means the worst is not over.

Illegal Migrants in California

The state also has a significant number of illegal migrants who weigh down the social safety net, overburden the health care system and raise policing costs. Due to the neglect of California’s state and city governments however, the issue with homelessness (estimated +181,000), crime (rate is lower but likely many crimes aren’t reported given policing issues), drug use (10,952 deaths by far the most of any state), and social malaise deters many visitors from vacationing in the state or relocating here.

California, America’s Most Beautiful State

The state still has a powerful, diversified economy given its vast domain and rich agricultural soil.

In fact, most people would agree that California climate, recreation, landscapes, and proximity to the ocean, make it the most desirable place in America.  Cities such as San Diego and San Francisco are epic travel destinations. There really is no end in demand for living in the Golden State. And that demand alone makes it more expensive, with wealthy Americans and foreigners willing to invest in it and buy homes there.

With ongoing support of the state and Federal Democrats, some Californians want to keep the state as it is politically and economically. Yet President Trump is firmly in control of FED funds and is cutting hard.  California was spoiled during the Obama and Biden years, receiving massive funds transfers. There have always been concerns that California takes, but doesn’t reciprocate in interstate trade. That obsessive interest in itself generates ire across the nation.

Change to Bring the State Back to It’s Golden Years

Obviously the state needs to change and rebuild its reputation as a wonderful place with wonderful people. In many cases, California business people are open-minded and willing to outsource some aspects of their businesses to “share the wealth” and encourage new business connections across the US and Canada. After all, outsourcing is a key tactic to reduce costs and access the best talent across North America.

And such decentralization helps to keep the US and Canada alive and prospering. Those strong leaders are truly progressive and building relationships that will support California’s success.

The back-to-office mandate of the big corporations exacerbates California’s problems by pulling unfortunate workers back into high-cost living, energy wasting commutes and unbearable lifestyle situations. It has created some population growth as workers who increased productivity we’re pulled back to the big cities, and helped the tech giants to trim their payrolls. With the threat of AI unemployment happening now, workers are making important decisions for their path ahead

The only way out is to move to Washington State or Texas and talented workers are doing just that. Other states will lure more workers as their economies accelerate.

While President Trump’s agenda is bringing America back to prosperity, it is unfortunately too protectionist and California with its China/Asia partners will likely suffer increasingly as repatriation continues and direct investment rockets. Asia trade will fall much further as US manufacturing and supply chains grow.  The US has the best outlook of any nation economically, and Americans are increasingly approving of Trump’s measures.

Even with short-term ebbs and flows, talented Californians continue to leave the state. If California voters don’t reject the CA Democrats and fix the issues mentioned above, the cost of living will worsen. The solution is lower taxes and reduced regulations on business. Otherwise, the business case for California companies is tough to see.

See more on US migration trends. Get up to date on the stock market forecast and technology and AI stocks such as Palantir and Nvidia.