California residents move to other Western states at a higher rate than other states. According to recently published State-to-State Migration Flows, the number of moves is in some cases dramatic. During the pandemic in 2020, many Californians benefitted from “work from home” and “work from anywhere” policies. As a result, employees in California could work in almost any location as companies quickly adapted to the realities of the pandemic on their workforce.
Data from the United States Postal Service for address changes compiled by Bankrate during January through September 2020 shows several trends:
- States with highest number of moves include Texas, New York, Washington DC, North Carolina, and California
- Top destinations are suburbs and “exurbs” of larger cities
- Many people stayed in the same metropolitan area
- 4% of moves are out-of-county (including out-of-state)
Reasons for moving include avoiding public interaction in larger cities, buying larger homes for home offices and more space, and seeking lower-cost suburbs and smaller cities.
Top 10 States for Americans Moving State-to-State for Structural Reasons
Americans are moving state-to-state to the following top 10 US states:
- North Dakota
- New Hampshire
Americans prefer to move to Western states over states in other areas such as the Midwest, South, or Northeast. Seven of the top states are considered Western states.
Large Number of California Residents Move to Other States
Looking at only the Western states in the list, it is easy to see that California residents move in larger numbers than other states’ residents:
|Western State||Gain from California Residents Move to State||Total Moves from Other States||% of California Residents Move to State|
California Residents Move to Nevada for Several Structural Reasons
Proximity to The Golden State might give Nevada an edge in capturing Californians. Prior to the pandemic, The Silver State was noted as having a robust and growing economy with plentiful job opportunities, no state income tax, no business income tax, affordable housing, lower cost of living, and a desirable climate.
A “California Exodus” appears to be another driving force. Ex-Californians represent nearly 20% of Nevada’s population. Reasons cited for the exodus include high taxes, unaffordable home prices, excessive regulations, unfriendly business climate, and high cost of living. In 2019, over 650,000 Californians moved to another state, leaving the state with a negative net population change.
Trend Continues Post-Pandemic: California Residents Move for Structural Reasons
California residents move to other states for many structural reasons. It is likely this trend will continue. The state is considering a wide range of tax increases including:
- Personal income tax increase on earnings over $1 million
- Raise the state’s corporate income tax rate
- Close tax loopholes
The California Tax Foundation’s Tax and Fee Report notes lawmakers have been seeking to increase the state’s fees and taxes by nearly $83 billion dollars. Some of the taxes under consideration include:
- Value-added tax on goods and services similar to those in Europe
- Employer tax increase
- Wealth tax that would continue for years after someone leaves California
What Should Employers do as California Residents Move to Other States?
Employers in the top 10 states for Americans moving state-to-state stand to gain with an increase in the local skilled labor force. They should also expect a rise in the need for new employees, as incoming residents help generate a positive economic impact.
Employers in California should review their hiring needs, corporate facility requirements, and relocation programs. Employers should determine if a group move to a Western state would be beneficial for the company as well as its employees.
GMS’ team of corporate relocation experts has helped thousands of our clients understand the importance of examining multiple factors that affect business success, talent acquisition, and employee retention. Our team can help your company learn why California residents move to other states and how this trend will impact your company’s corporate initiatives.
GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.
Powered by GMS’ 2020 Mobility Benchmark, the innovative GMS Program/Policy Evaluation (PPE) Tool provides instant relocation policy reviews. It also helps users gain insight into how their company’s relocation program compares to their industry peers.
Learn more about why California residents move to other states and how a group move might be in your company’s best interest. Contact our experts online or call us at 800.617.1904 or 480.922.0700 today.
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