Are People Still Leaving California?

It sounds inconceivable to many of us who grew up with powerful images of the state of California with its wealth, beaches, mountains, and beautiful climate, that everyone there might want to get out.

Yes, more polls suggest Californians are fed up with how their society and government are run and they don’t see it improving. A recent Strategies 360 poll suggests 44% of Californians want to move out of the state. And some suggest the state is dying, a truly sad situation that demands an immediate turnaround, before a coming tragedy.

They’re citing the cost of living, high real estate prices, excessive taxation, repressive regulations, and the phony political ideology wrapped up in climate protection, while they spend excessively on imports manufactured in China and Asia.

If you own a California-based company, you’ve likely had your cost calculator out and reviewed the numbers. The numbers would push you to leave for sure. So, it’s the lifestyle, climate, culture and money there that keep businesses in place until they just can’t take it anymore.

In a recent poll, Californians showed a continuing belief that the state is on track, despite everything that’s happening.

The Strategies 360 Poll 2023

In the recent Strategies 360 Poll, they cited cost of living, their neighborhood and the future of California as key issues. Their personal costs and the outlook for the state appear to be the biggest disappointments.

Strategies 360 California Poll.
Strategies 360 California Poll. Screnshot courtesy of Stategies 360.

Deep Conflict within California Communities

There are deep political divides that have formed, however this may have been inevitable given economic, business and political actions through the free trade era. Coastal empires benefitted the most from that era, particularly the west coast due to its proximity to Asian Trade. The LA port is one of the busiest in the world.

Travel California

The world is undergoing big change economically and there is political turmoil. Big multinational corporations have enjoyed a field day getting all they want, paying low taxes and labor costs, while making money hand over fist. Now, there’s a pullback and more people are moving out heading into the US heartland for safer living and lower costs.

The state’s competitive advantage has been eroded with less money funneled through California to China.

According to a moving and storage company, Californians are relocating to Texas, Florida, Washington, Oregon, and Tennessee which offer a 30% reduction in the cost of living. That’s taken some of the heat off of the California housing market and raised prices in places like Idaho, Utah, Nevada, Arizona and Tennessee.

Many of the big tech companies are located in California because it’s such a magnificent place to live and do business. I’ve been working with Californian companies for about 20 years from San Diego to Los Angeles, to Napa, and I like working with them. I’ve mentioned many times that they’re more entrepreneurial, love technology, and the climate there has drawn trillions in investment money. There’s so much to do and see, and there’s nothing better than California wines. It’s a wonder they get any work done!

Florida Ron DeSantis Reflects on How to Repair California

US Presidential Candidate visits San Francisco to discuss California’s woes and how there is a better future if policing, justice, homelessness, and border protection were a priority. Fascinating to see him as Florida’s successful governor walk around San Francisco’s decay.

California Governor Gavin Newsom

The governor has recently launched initiatives to help the homeless and he has been quoted as saying “Gov. Newsom says ‘NIMBYism is destroying’ California”  Recently he paused $1 billion in funding for homelessness because municipalities were being aggressive in dealing with the issue. That budget was set at $15.3 billion over the next three years. His efforts so far haven’t been fruitful and he’s looking at a $31.5 Billion deficit. Daniel Bier of reports that “California’s state debt stands at about $777 billion, the highest in the country, dwarfing runner-up New York ($387 billion).”

Dream Clients in California

Your best dream clients are going to be from California. Those from other states seem to lack the calm panache, confidence to take risk, find top talent, and the access to funding to make startup and business dreams come true. And a lot of talent has been pulled into California, particularly Silicon Valley. However, many are leaving for Austin and other low-tax states and they’re reporting much happier lives.

In reading the expert’s analysis of California’s problems, it appears they don’t really know what is happening and why. Some cite a single negative bill that was passed while others say it’s only about disappointment with their income and falling standard of living.

Well, the fact is, the ultra-high taxes that support the ideological spending by the Newsom government likely aren’t going away. If not for the Biden pandemic handouts to help blue states pay their overdrawn accounts, California may have gone bankrupt. Yet they did survive with the handout.

The Debt Burden Scare

Edward Ring, Senior Fellow at the California Policy Center points out that California’s total state and local government debt now stands at almost $1.6 trillion, or about half the state’s GDP. Californians also owe their share of the US federal debt load too, at $32 Trillion.

It looks like the disappointment of it all is building into an extended tantrum as Californians feel overwhelmed. And they likely are depressed about talent and businesses leaving the state. That would give a gloom and doom feel, and due to California’s extreme political views, they’re not completely welcome in other states such as Texas and Utah.

Can California overcome its political and economic challenges? Some believe that can only happen with deep political change. The privileged Liberal mindset is so ingrained though, it will take unprecedented disappointment and severe financial pain to cause voters to give up on the liberal ideology. It’s not at that point yet, but as the state’s competitiveness slides, cracks will show.

If there is any state that can recover, it has to be California. It has the talent, technology base, and breadth of industry to generate value so many different ways. Technology is the key since it influences the productivity of everything else now.

The state can use technology to hire remote talent including digital nomads to access the best talent at an affordable cost. This is the most intelligent solution so that companies and entrepreneurs can stay seated in the Silicon Valley scene.

So the right solutions are present, yet big tech companies may not care about the rest of California’s businesses and could influence politicians to stay the course come hell or high water. Like all companies, California companies must keep an eye on practicality and not rely on the California brand, which previously made everything work.

While the exodus of talent could really injure the state’s businesses and economy, it’s the rising taxes, crime, social malaise, homelessness, and crippling overregulation of industry that could bring the matter to a boil.

Then perhaps, a new political party can arrive to turn California around. They’ll have their work cut out for them.

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