Business Building a better region together, one story at a time

Support Our Spring Campaign

--%

$
Select One
  • Monthly
  • Yearly
  • One Time

San Diego's Business Exodus Is Really a People Exodus

The number of San Diegans and Californians who’ve moved out of state is more dramatic than the number of jobs and businesses fleeing.

San Diego’s not facing a business exodus as much as it is a people exodus – and the same trend holds for California.

The county and the state have long experienced overall population growth. But fewer people from other states are moving here and millions of Californians have moved elsewhere.

A recent New York Times analysis found that California has transformed from a state where roughly 50 percent of residents originally hailed from elsewhere to one dominated by natives.

As of 2012, just 18 percent of Californians were born in another U.S. state. Another 28 percent moved to California from another country.

The Times also found about 6.8 million California natives now live out of state, more than two times the number who resided elsewhere in 1980.

That statistic dwarfs the state’s net job losses due to relocating businesses.

From 1989 to 2011, a database tracking California business moves shows the state lost a relatively paltry 231,000 net jobs following company moves, a figure equivalent to 1 percent of the state’s workforce.

San Diego, meanwhile, gained nearly 8,000 net jobs from business moves.

All these numbers drive home crucial realities for California and San Diego.

Local economic developers say they’re more focused on maintaining or growing companies that are here rather than luring them from elsewhere. Business relocations simply don’t make a significant dent in the economy.

But a diaspora of native Californians and onetime residents is a trend that, whether it continues or not, could have an impact on the region’s ability to support a wide range of industries and workers and offer a window into the state’s biggest economic challenges.

Just who’s leaving is revealing.

San Diego County lost more than 30,000 working-age adults from 2008 to 2013 despite a year-over-year net gain in the population during that period, according to a recent National University System Institute for Policy Research review of state Department of Finance data.

National University economist Kelly Cunningham found that nearly all who bailed on San Diego were Gen-Xers between 35 and 49 years old, a trend that hints at some deeper reasons for relocations.

Job moves could’ve driven some of those departures but the region’s increasingly hourglass economy – with fewer middle-class jobs and steep housing prices – likely played a more pivotal role.

Texas, Arizona and Nevada have been identified as top destinations for departing Californians in a slew of analyses, including an often-cited 2012 report by the right-leaning Manhattan Institute.

Each of those states – which are also top draws for California companies – have significantly lower housing prices than San Diego or California.

Those costs may be hitting low- and middle-income residents hardest.

Some 2013 data-crunching by an economist from the real estate site Trulia was particularly telling:

From 2005 to 2011, California lost 158 people with household incomes under $20,000 for every 100 who arrived, and 165 for every 100 people with household incomes between $20,000 and $40,000. In contrast, just slightly more people with household incomes in the $100,000-$200,000 range left than came to California (103 out per 100 in), and California actually gained a hair more people in the $200,000+ range than it lost (99 out per 100 in). The rich aren’t leaving California, but the poor and the middle class are.

That economist Jed Kolko also emphasized that relocations were more common when and where home prices were highest compared with other regions out of state.

Such moves declined during the recession but Kolko and Cunningham predict California will see another uptick as home prices rise.

San Diego saw its most significant population losses in recent history from 2004 to 2006 in the midst of the housing boom and similar trends have emerged in the past, Cunningham said.

There are many other potential reasons for state population shifts too.

San Diego County saw a roughly 5 percent spike in residents between 20 and 34. Cunningham said the younger arrivals could speak to an increasing military and college student presence here.

The county has also seen an increase in the percentage of Baby Boomers and residents over 65 but those shifts are largely due to aging and the massive Boomer generation rather than migration into San Diego, he said.

All told, these upticks don’t come close to the massive population growth California and San Diego County once experienced.

The state added 6.1 million residents from 1980 to 1990, a huge boom, said USC demography professor Dowell Myers.

The decades that followed brought less explosive increases. From 2000 to 2010, the state population grew just 10 percent, the lowest uptick since before 1940.

Smaller, yearly population gains continued in California and San Diego County in more recent years but the boosts are far less dramatic and are generally coming from natural circumstances such as new births, not people moving in.

“The story now is no longer a story of recruiting migrants,” Myers said. “It’s a story of raising our own. It’s a homegrown mission.”

California still seems to be doing better on that front than most other states.

The state may have shed hundreds of thousands of residents, but 75 percent of California natives still resided here as of 2012.

Of the states most publicized for drawing fleeing Californians, only Texas boasts a higher percentage of natives.

This is part of our quest digging into the difficulties – real or perceived – of doing business in San Diego. Check out the previous story in our series, The City’s Hand-Picked Growth Industries, and the next, A Reader’s Guide to San Diego Business Incentives.

Show Comments
Loading

We’re striving for the best possible discussion and may delete comments using our editorial judgment. All comments containing links will be reviewed by VOSD staff before they are published.
Read our full comment policy.
For longer comments, consider submitting an op-ed to Voice of San Diego.
Read the guidelines here.

We have recently updated our commenting system. If you are unable to submit a comment, please clear the cache and cookies in your browser, or use a private browsing window. Click here for detailed instructions.