California, the nation’s most populous state, is losing workers at a faster rate than anywhere else in the United States, according to a new report from the National Association of Realtors (NAR).

The Golden State faces the largest number of people moving for new career prospects. In the third quarter of 2023, the most recent data set available, nearly 87,000 professionals left for opportunities in other states, outpacing job flows of about 69,000.

California experienced a net migration of -18,485 during that period among workers, far more than second-place Illinois, where the rate was -4,598, according to the NAR.

“High housing costs, especially in areas like San Francisco and Los Angeles, coupled with a high cost of living, have caused many workers to relocate to more accessible states like Texas and Arizona“, NAR said in its report. “California’s high income taxes push workers to states with more favorable tax policies, such as Texas.”

The most popular states for California workers to jump ship to are Texas, with 14% of professionals moving to the Lone Star State, followed by Arizona, (8.5%), Washington (7.7%), Nevada (7 .5%) and New York (6.8 percent).

Newsweek contacted the governor Gavin Newsomhis office for comment by phone outside normal business hours.

“California’s once-dominant appeal as the ‘land of opportunity’ is beginning to erode as workers seek more sustainable living and working conditions elsewhere,” Sam Taylor, a
said business consultant at LLC.org Newsweek.

A larger trend

California has experienced net population loss since 2000, when the Golden State enjoyed a net interstate migration of 154,000. In 2021, net losses reached 361,000. The Public Policy Institute of California (PPIC) found that a significant driver of the population decline is people choosing to move across state lines, although international migration as well as death and birth rates also contributed.

But in recent years, this abandonment trend has become more pronounced. A determining factor in the decline is the shift to working from home, stimulated by the coronavirus pandemic.

“During the peak of the pandemic, flows from the state became so large that nearly every demographic and socioeconomic group suffered net losses,” a February 2024 PPIC report said. She puts the exodus, like NAR, on high housing costs, which she says “remains an ongoing public policy challenge.”

However, California’s fortunes when it comes to retaining workers could change in the near future, explains Charles Faigle, executive vice president of Talent Solutions, Americas at WilsonHCG.

“During the pandemic, when companies were more open to remote work and not making wage adjustments, yes, people left California. Why wouldn’t he? They were able to keep their California salaries while living somewhere with significantly lower housing costs. That was a compelling proposition for many professionals,” he said Newsweek.

But Faigle said 2024 could end up “telling a completely different story”.

“Companies are moving towards hybrid work arrangements rather than fully remote setups. Some people who have moved to a lower cost location who work remotely now have to be in the office several times a week,” he added. “And it works the other way around too. Some companies adjust wages based on the location of employees, so some people may head to California, where wages are typically higher. These policy changes will actually end up pushing people back into the state.”

Cost of living in California

California’s cost of living — the amount needed to cover basic expenses like food, shelter, transportation and health care — is among the highest in the country. According to the World Population Review, California has the fourth highest cost of living rate at 134.5, surpassed only by Hawaii, Washington, DC, and Massachusetts. RentCafe, an apartment search site, puts California’s buying and renting costs at nearly 100 percent higher than the national average.

The cost of living challenge “has hit younger and middle-income workers significantly, prompting many to seek more affordable markets in states like Texas, Arizona and Nevada,” said Stephanie Alston, president of recruiting firm BGG Enterprises. Newsweek.

She added, “In California, Rent costs alone can exceed 30 percent of a person’s incomecreating financial pressure and often driving relocation to states with lower housing costs and property taxes, where incomes stretch further.”

Stress and Burnout

The California cities of Stockton, Riverside, Anaheim and Los Angeles are also among the most stressful for workers, according to a 2024 survey by LLC.org.

Taylor said this is due to “long commutes, high crime rates and minimal access to affordable healthcare.”

“For example, Stockton, California, ranked third, with a significant share of workers facing long commute times (32.7 minutes on average) and high insurance costs. The overall stress score for these cities makes it difficult for workers to maintain a healthy job. life balance,” something Taylor says is easier when you live in other states.

“In contrast, states like Texas and Florida, which have lower housing costs, better job opportunities and a more manageable lifestyle, attract these workers, allowing them to expand their incomes even further, enjoying of a more stressful environment,” he added. .