October 4, 2023

A lot of my long-time readers know I’ve an odd fascination with attempting to clarify why there’s actually no California exodus.

My thesis is predicated on math that reveals ex-Californians are proportionally a small share of the state’s inhabitants. I’m nicely conscious that my “no exodus” argument runs in opposition to standard knowledge that’s based mostly on statistics monitoring California’s nationally main variety of residents exiting. However these figures overlook California being the most-populated state within the US.

So, I used to be thrilled to see a latest report from the Federal Reserve Financial institution of Dallas rating states by the “stickiness” of their inhabitants. Stickiness refers to share of residents of a state who have been born there.

Dallas Fed economists discovered California was the fourth “stickiest” state with 73% of its residents being native-born. Who knew? Wink!

No. 1 was Texas at 82.2%, then got here North Carolina (75.5%), and Georgia (74.2%). Following California was Utah (72.9%) and Florida (72.7%). Let me name them the “sticky six.” (Observe: For these seeing a political spin in that group, cease – the 4 least-sticky locations have been additionally “purple” states: Wyoming at 45.3%, North Dakota at 48.6%, Alaska at 48.7%, and South Dakota at 54.2%.)

And the Dallas Fed double-checked inhabitants loyalty by additionally eyeing migration knowledge just like my very own reporting – trying on the share of residents leaving for different states in 2021.

California tied at eleventh lowest with sticky six members Georgia and Florida with exits equalling 2.1% of their inhabitants. Texas was No. 1 at 1.5%. The exit share in North Carolina and Utah ranked 18th at 2.3%.

Say, what?

I requested Pia Orrenius, the Dallas Fed’s senior economist, to clarify what the report noticed as California’s “notable exception” standing.

“There are issues which can be exogenous, like dimension and climate; California does very nicely on these counts,” Orrenius says.

The bodily dimension of a state issues as a result of added prices related to long-distance relocations. Texas is the nation’s second-largest state based mostly on sq. miles. California’s No. 3. Then there’s Utah (13), Florida (22), Georgia (24), and North Carolina (28).

“Then there’s financial alternative, together with job progress and the variety of cities – correlated with range of jobs and excessive wages … California does nicely there too,” Orrenius says.

For instance, my trusty spreadsheet reveals California ranked ninth-best amongst all states for pre-pandemic job progress (2010-19) at 22%. Different sticky six states: Utah was No. 1 at 32%, Florida, No. 5 at 25%, Texas was No. 6 at 23%, Georgia was No. 12 at 20% and North Carolina was No. 14 at 18%.

But Orrenius famous with shock that in California, “individuals keep there regardless of the excessive housing prices and a comparatively excessive tax burden.”

Nicely, not one of the stickiest half-dozen are cut price states. Contemplate a crude homebuying affordability index crafted by my spreadsheet, evaluating a 2021 estimated mortgage fee with the statewide median earnings.