California, home to a rich pool of talent in major industries such as film and tech, has lost thousands of workers to states that have a lower cost of living and other perks, according to a recent report.
The National Assn. of Realtors, which analyzed U.S. census data from the third quarter of 2023, found 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 published its findings last month.
Some of the popular destinations for California job switchers: Texas, Arizona, Washington and Nevada.
Even though California’s job market remains strong, high costs of living and a lack of affordable housing, especially in cities such as Los Angeles and San Francisco, play a role in why people accept jobs elsewhere, said Nadia Evangelou, a senior economist for the Realtors association.
“The lack of affordable housing doesn’t just impact homebuyers. It also affects the state’s ability to retain talent,” she said. “This trend is concerning because it reflects the economic strain 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 scenic beaches, mountains and deserts, California also grappled with big hurdles in the last year, including the Hollywood strikes and mass layoffs in the tech and media industries. That could also leave workers contemplating whether they should find new opportunities elsewhere in states such as Texas that don’t have an income tax.
California lost more workers than any other state that was part of the analysis with a net loss of 18,485 job switchers.
On the flip side, states in the Southeast and Southwest gained the most workers, the analysis found. Virginia — with an abundance of government contracting, tech and defense jobs — saw a net gain of 7,191 job migrants, more than other states analyzed. Texas, Tennessee, South Carolina and Georgia rounded out the top five gainers.
The analysis by the real estate trade group has some limitations. The census data don’t include Alaska, Michigan, Mississippi and North Carolina. The analysis also focuses on people who quit their current jobs for new ones, 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 alluring a state is for people switching jobs. Calculating “the percentage of people moving into a state relative to all job movers in that state,” the group found South Carolina, Maine, Montana and Tennessee were the most attractive states for people who switched jobs.
Stabilizing mortgage rates and more housing supply could help slow down the California exodus, but the state is also competing for talent, Evangelou said.
“This, unfortunately, will continue because it depends on the demand and how much supply we have out there,” she said.
