California Dream Died by Exporting Middle Class

The out-migrating of California middle class citizens to other states explains why California uniquely has seen the number of 30-year-olds earning more than their parents has been cut in half since 1970.

Economist Raj Chetty of the Stanford University’s Institute for Policy Research studies intergenerational income mobility to measure the likelihood children will financially fare better financially than their parents. Chetty has documented that the American Dream has uniquely crumbled for California youth with only 48 percent of the state’s 30-year-olds now making more than their parents, versus 92 percent in 1970.

“California Dreamin” was a hit song in the 1960s when Governor Pat Brown (Jerry Brown’s father) was spending over 20 percent of California’s budget on infrastructure to accommodate the over 1,000 citizens per day that in-migrated from other states. Most were escaping the eastern United States’ cold winters and poor opportunities for California’s warmth and booming job market.

But California has been on net exporting its citizens for decades. That trend accelerated to approximately 930,000 net Californians leaving the Golden State between 2004 and 2015. Most left to seek better economic opportunities in Arizona, Texas, Nevada, Oregon, and Washington, according to the Census Bureau

It is California’s middle class that is fleeing California, not the rich. The net migration of the state’s top 20 percent is about flat and the next quintile is actually seeing positive immigration from other states. But 85 percent of those out-migrating are in the middle 20 percent income bracket and the next lower quintile.

California’s out-migration has tended to be younger working families with about 36 percent are those leaving being ages of 40 and 54 and 18 percent being their children ages 0 to 17. Of all the citizens leaving California, 57 percent were employed individuals and another 16 percent were their children 16 years old or younger.

Because of great universities and colleges, just 1 percent of 18-to-24-year-olds are leaving California in out-migration. But that percentage swells to 17 percent for recent college graduates ages 25 to 39-year-olds.

California is replacing the citizens that are leaving with foreign immigrants. From about 9 percent of California being foreign born in 1970, by 2015, about 27 percent were foreign born. The eight California counties of Santa Clara, San Mateo, Los Angeles, San Francisco, Alameda, Imperial, Orange, and Monterey have over 30 percent foreign-born residents, according to the Public Policy Institute of California.

Most foreign-born residents of California have some form of legal status with about 49 percent being naturalized citizens; 26 percent have some legal status through green cards or visas, and just 25 percent are illegal aliens.

The most glaring difference between foreign-born immigrants and California-born citizens is education attainment for those age 25 and older; 34 percent of foreign-born do not have a high school diploma, versus 8 percent of California-born residents.

With California exporting its middle-class citizens and importing the foreign-born poor, it should not be surprising that Breitbart News recently reported that the Los Angeles-Long Beach-Anaheim area was rated by the Census Bureau review as the metropolitan area with the highest poverty rate in the nation, at 17.6 percent.