Millenials and Gen Xers are leaving California in droves
Since the days of the Gold Rush, California has been a magnet for those seeking wealth. A backwater barely a century ago, with just over 3 million residents compared to nearly 40 million today, the Golden State established dominance over everything from agriculture and film to space travel and the internet.
But new data suggests that the tide may be turning, and a rich hegira is afoot.
Researchers found that 39,000 San Franciscans who had filed federal tax returns for 2018 had moved out of the city before filing 2019 returns, taking away a net of $7 billion in income in one year. A soon-to-be released report from the San Francisco Business Times, sources tell me, will see a similar phenomenon in Silicon Valley.
Once able to hold onto its rich, the Golden State seems to be following the course of high-tax places like New York, Illinois, New Jersey, Massachusetts and Connecticut. For years, these cities and states have been oozing billions in tax revenues as wealthy residents fled to the likes of Texas, Florida, Arizona, the Carolinas and Tennessee. While California still lags behind New York State in the money-losing sweepstakes, it is catching up: in 2020 the state lost $17.8 billion in tax revenue, with the loss spreading into the Bay Area, whose tech-rich economy historically kept the state solvent.
Remarkably, this all occurred at a time when the tech economy — the Bay Area’s driving force — was at its peak, and the disruptions associated with Covid-19 and the George Floyd protests had not yet occurred.
The reasons for this exodus are not hard to find. We know that out-migration from the Bay Area has soared since 2019, with the largest percentage loss of residents occurring in San Francisco and the Silicon Valley. Why? Because the state is becoming less and less safe. Indeed, two out of three SF residents plan to exit due to crime and homelessness, with an astonishing half of San Franciscans claiming in one survey that they had been robbed.
Those leaving were not knuckle-dragging Trumpistas or illiterate peasants (California leads the nation in illiteracy). In fact, the latest IRS data reveals that the largest net domestic out-migration is among disgruntled 35- to 44-year-olds, precisely the ages when many people reach their peak earnings, buy houses, and start businesses.
This goes to show that, for the first time in its modern history, California is no longer a beacon for the young and ambitious. The state has become the incubator of some of the worst political trends of our times — affirmative action, climate hysteria, identity politics — and it shows no sign of turning away from these. Slowly but surely, the state will essentially be one big retirement home. If things keep up this way, it will be time to throw away the surfboard and get a walker — if we can still pay our bills.