California, home to a rich talent pool in major industries such as film and technology, has lost thousands of workers to states offering lower costs of living and other benefits, according to a report recent.
The Assn. National. of Realtors, which analyzed U.S. Census data from the third quarter of 2023, found that nearly 87,000 workers flocked from California to other states for new jobs, while the Golden State gained only 69,000 new workers. The group released its findings last month.
Some of the popular destinations for California job changers: Texas, Arizona, Washington and Nevada.
Even though California’s job market remains strong, the high cost of living and lack of affordable housing, particularly in cities like Los Angeles and San Francisco, play a role in why people take jobs elsewhere, said Nadia Evangelou, senior economist for Realtors. association.
“The lack of affordable housing doesn’t just affect home buyers. It also affects the state’s ability to retain talent,” she said. “This trend is concerning because it reflects the economic pressure that high housing costs place on professionals, even those with stable incomes. »
The findings illustrate some of the challenges California faces as it tries to keep workers in the state. Known for its sunny weather and picturesque beaches, mountains and deserts, California has also struggled with big hurdles in the past year, including strikes in Hollywood and mass layoffs in the tech and media industries . It could also make workers wonder whether they should find new opportunities elsewhere, in states like Texas that don’t have an income tax.
California lost more workers than any other state in the analysis, with a net loss of 18,485 job changes.
On the other hand, the Southeast and Southwest states gained the most workers, according to the analysis. Virginia – with an abundance of jobs in government contracting, technology and defense – saw a net gain of 7,191 migrant workers, more than the other states analyzed. Texas, Tennessee, South Carolina and Georgia round out the top five winners.
The real estate trade group’s analysis has some limitations. Census data does not include Alaska, Michigan, Mississippi and North Carolina. The analysis also focuses on people who left their current job for a new one, not laid-off workers.
Larger states have more people moving in and out, so the trade group also looked at another metric to gauge how attractive a state is to people changing jobs. By calculating “the percentage of people moving to a state relative to all those who changed jobs in that state,” the group found that South Carolina, Maine, Montana and Tennessee were the states most attractive to people changing jobs.
Stabilizing mortgage rates and increasing housing supply could help slow California’s exodus, but the state is also competing for talent, Evangelou said.
“Unfortunately this is going to continue because it depends on the demand and supply we have,” she said.
