Is California losing its luster? UC San Diego survey says no

The exodus of Californians forecast in recent news headlines isn’t likely to happen soon, UC San Diego researchers reported in a survey released Wednesday.

The UC San Diego survey queried more than 3,000 Californians, including 295 who completed the questions in Spanish. It found that nearly two-thirds of residents still believe in the “California Dream” of opportunity and prosperity.

“Over the winter there was an increasing narrative we kept seeing in the news media about people leaving California — focused primarily on wealthier Californians, the Elon Musks of the world,” said Thad Kousser, professor of political science at UC San Diego and coauthor of the study. “But what we were seeing was individual stories. We wanted to look at whether there was data behind those stories.”

Despite the impending loss of a congressional seat and a handful of billionaires, the researchers found no unusual surge in Californians planning to move out of state.

The survey forms part of a larger study led by UC researchers to examine California’s status as a dream state. Researchers mined data from the U.S. census, credit histories, home ownership rates, venture capital investments, internet search records and the Franchise Tax Board to understand which Californians are likely to remain and which are contemplating leaving.

“Put another way, who still sees the California dream as working for people like them, and who sees the Golden State as tarnished?” the researchers asked in their report on the survey.

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Less than a quarter of survey respondents, 23%, said they were seriously considering leaving the state. That’s slightly lower than the 24% who said they might move in a 2019 survey conducted by UC Berkeley.

The percentage of people contemplating moving from San Diego and Orange County was lower than any other region of the state at just 17%, down from 23% in 2019.

In the Central Valley and Northern California, however, the number of people considering a move had risen since 2019, to 29% and 37% respectively.

Although the 2019 Berkeley survey showed a wide disparity between political parties on the question of moving out of state, the UC San Diego survey found that the split had narrowed.

In 2019, just 14% of Democrats planned to move from California, compared to 40% of Republicans. In the recent study, 21% of Democrats and 30% of Republicans were seriously considering relocating.

“That’s interesting and surprising to us,” Kousser said. “It may indicate that in 2019 the conversation about leaving the state was driven by politics and ideology. And post-pandemic, it may be driven more by people’s reality and circumstances. The lives of Democrats and Republicans alike have been affected by the pandemic.”

Ethnicity and income appeared to influence respondents’ opinions. White and middle-class Californians were more likely to be apprehensive about their futures in California than other demographic groups, whereas high numbers of young adult respondents, Spanish speakers, Latinos, African Americans and Asian Americans all said they still see California as golden, according to the survey.

Seventy-five percent of survey respondents ages 18 to 24 said they believe the California dream “still works for people like me,” while 57% of people ages 45 to 64 and 59% of those over 65 felt the same.

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Of the youngest survey participants, 59% believe the state will be a better place for today’s children, compared to 30% of those age 45 and older.

Among the wealthiest survey respondents, with incomes above $150,000 per year, 59% thought their children will inherit a better state, and 42% of those with incomes below $25,000 per year believed that as well. However, 32% of those with incomes between $50,000 and $75,000 were similarly hopeful for their children.

Kousser said it may be that the wealthiest respondents are living the California dream already, while low-income participants hope to achieve that. Middle-class Californians are squeezed by the housing shortage and may look to buy homes elsewhere, he said.

“I think those people who are in lower-income groups are people who are still aspiring,” Kousser said. “These are potentially people who feel like they’re on the way up. ...The real pessimism about California comes from people in the middle-income groups.”

Nearly half of African American, Asian American and Latino respondents believe the state will be a better place for their children, while 59% of Spanish speakers felt the same. Only 37% of white survey participants believed that.

Kousser said respondents’ answers appear to mirror California’s changing demographics; those whose populations are increasing expressed more positive perceptions of their future here.

“We see that the fastest growing groups are the ones who see California being a better place for their children,” he said. “The ones still on the rise are the ones who still believe the California dream.”

Another facet of the study, conducted by Stanford and Cornell Universities, analyzed two decades of Franchise Tax Board Data and found no evidence that millionaires are fleeing the state, despite increased taxes on high-wage earners.

A separate analysis from Cornell University gave a different spin to the parable of the Golden State. It showed that California’s share of U.S. venture capital dollars rose from one-third of the national total in 1995 to nearly half by 2021, far eclipsing other large states, including New York, Florida and Texas.

In the first quarter of 2021, California’s share of venture capital funding was 48%, the study reported. New York received 15% of such funding for that quarter, and Texas and Florida received 2% each.