Signs are rapidly mounting that the California economy we knew before the pandemic will look quite different after.
About one in three adult Californians say the lack of well-paying jobs is making them seriously consider moving — 26 percent out of state and 6 percent elsewhere within, according to a new poll from the Public Policy Institute of California.
In the Bay Area this month, electric car maker Tesla’s CEO Elon Musk announced he already had departed for Texas, and information technology company Hewlett-Packard Enterprise and database software giant Oracle revealed plans to relocate their headquarters to the Longhorn State.
Meanwhile, new data shows that California population growth in the last fiscal year, which includes the start of coronavirus shutdowns, slowed to 0.05%, the lowest rate since 1900. Every coastal county except San Diego and San Francisco lost residents from July 1, 2019, to July 1, 2020. The Bay Area growth rate of 0.03% was even more anemic than statewide.
The confluence of events should serve as a wake-up call to local, regional and state leaders that they must prepare for the new reality.
To make the Bay Area and the state an attractive place to live and work, to retain the businesses we have and lure new ones, we must address our affordable housing shortfall and our income inequality without driving up the already high cost of living.
That means that progressive Democrats who control the state Capitol and the major Bay Area cities must find ways to use the resources they have more efficiently rather than trying to tax their way out of the pandemic.
Our local and state economy has been battered by COVID-19. A recovery hinges first on widespread distribution of a vaccine, which is only just beginning and won’t show significant impact for months. Then the climb out of the financial hole, the reopening of businesses and the return to the full employment we enjoyed before this onslaught will likely take years.
It’s unfortunate that more federal stimulus help has been slow in coming and inadequate in magnitude. It has left too many people out of work, struggling to cover their rent or mortgage and pay their bills. And that’s especially tough in California and the Bay Area.
So it’s really not surprising that we’re seeing people fleeing, either because they cannot afford to live here any longer or because they’ve realized from the pandemic that they can work from home — and home can be anywhere.
Chances are that the population growth rate has slowed even further than the new numbers indicate. The data, from the state Department of Finance, reflects the last fiscal year, so it just captures the first few months of the pandemic. A lot has happened since then.
Nonetheless, it shows that four of the nine Bay Area counties — Marin, Napa, San Mateo and Sonoma — lost population, while the other five barely eked out a gain, with San Francisco tops at 0.31%, followed by Contra Costa (0.24%), Alameda (0.19%), Santa Clara (0.07%) and Solano (0.06%).
Our challenge as we eventually exit the COVID era will be to find a way to keep the people and jobs we have, to build back our vibrant economy and hold on to our region’s wonderful diversity. It’s what makes the Bay Area, and the state, so special.
But it’s important to recognize that our region and our economy will be different. Many people will continue to work from home. It’s hard to image putting that genie back in the bottle. Traffic patterns will be altered, perhaps permanently. Some of that might be good for our mental health and the environment.
Sadly, we have lost too many small businesses. Once vital shopping districts are now strewn with closed-up storefronts. It’s unclear how many of those companies will be revived and how many new ones will emerge as another generation of entrepreneurs steps up.
As we did after the Great Recession, we will rebuild the state and Bay Area economy. The decisions we make in the coming months will determine how well and quickly we do that.