Businesses Are Fleeing California Along With Its Residents, And President Biden Should Pay Attention

www.forbes.com
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California has lost 265 business headquarters since 2018, and the pace of relocations appears to be accelerating.
ALAMEDA, CALIFORNIA - MARCH 16: California Gov. Gavin Newsom looks on during a news conference after ... [+] he toured the newly reopened Ruby Bridges Elementary School on March 16, 2021 in Alameda, California. Gov. Newsom is traveling throughout California to highlight the state's efforts to reopen schools and businesses as he faces the threat of recall. (Photo by Justin Sullivan/Getty Images) Getty Images

Last year, California's population decreased for the first time in recorded history and it lost a congressional seat. The state is starting to develop a two-tiered society, with higher-income, educated tech workers clustering in the major coastal cities while lower-income, less-educated workers are relegated to the interior of the state or forced out altogether. Now, a new study finds that business headquarters are also leaving the state at a record pace.

For decades, California was the state of opportunity within the land of opportunity. People from east of the Mississippi, lured by California's exceptional climate, geographic beauty, and economic opportunities, moved there in droves: Its population grew by 10% or more in every decade from 1850 to 2010.

Now, like its famous raisins, opportunity in California looks to be drying up. From 2000 to 2020, California experienced a net loss of 2.6 million people to other U.S. states. Its total population was propped up by natural population increases and strong foreign immigration, but in 2020 foreign immigration decreased and the state's birth rate continued its steady decline. As a result, California's total population fell by 182,000 people.

A new study finds that business headquarters are also leaving California, and at an increasing rate. Economist Lee Ohanian of the Hoover Institution at Stanford University and Joseph Vranich, president of the site selection consulting firm Spectrum Location Solutions, collected data on the relocation of California business headquarters from January 2018 to June 2021. As…
Adam A. Millsap
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