”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.
Buzz: A new Californian is likely single, taking a shot at what’s left of the pricey California dream.
Source: My trusty spreadsheets analyzed taxpayer migration data from the IRS for 2020, the pandemic era’s first year. The research looked at household adjusted gross income by tax return and how many people were accounted for on that filing — taxpayer and/or spouse or dependents.
Note: These numbers do not track non-filers, a group that tends to be poorer. But taxpayer stats do hint at where paychecks and retirement funds are headed.
Topline
The average taxpaying American household making an interstate move in 2020 had 1.83 people.
Now consider federal tax returns from Californians new to the state. These households were 10% smaller, averaging 1.66 people. Only five states had smaller move-in households: the District of Columbia at 1.35, Massachusetts and New York at 1.5 and Vermont and Rhode Island at 1.6.
These figures suggest California had an above-average inflow of singles and far fewer inbound couples or families with children. That’s not terribly surprising considering the state’s higher cost of living.
Meanwhile, the size of an ex-California household was roughly the national norm — 1.8 people per household departed, a mid-range No. 27 rank.
Details
This is just more evidence that California, as a place to live, is not very popular with fellow Americans — even if its statewide average income is $101,000, the nation’s sixth-highest.
Just look at the finances of who’s coming and going.
The average adjustable gross income for new Californians in 2020 was $83,100, No. 20 among the states. That’s not family-friendly kind of money.
Wyoming drew the biggest income earners from anywhere in the U.S. at $133,700. Next was Florida at $121,800, Connecticut at $119,100, New Jersey at $98,800 and New Hampshire at $96,000.
Lowest? Mississippi at $54,000, North Dakota at $54,500, Oklahoma and West Virginia at $54,900 and Kentucky at $58,200.
Next, consider the 2020 incomes of exiting Californians.
The households who left made an average $105,100, No. 5 behind Connecticut at $117,600, New York at $114,400 and New Jersey at $107,700.
Lowest exit incomes were found in Mississippi at $51,000, Idaho at $54,300, Montana at $54,700, West Virginia at $57,000 and Louisiana at $58,300.
Now ponder the resulting income differences.
California’s newest residents earned 21% less than those who left. Only two states fared worse: Illinois, 29% less, and New York, 27% less. California tied Nebraska and the District of Columbia.
On the flip side, Wyoming was No. 1 with arriving households earning 94% more than what those who departed made in 2020. Florida was next at 79%, Montana at 64%, Idaho at 56%, and Vermont at 45%.
Remember that lower-income households typically move more frequently to seek better opportunities — but the cost of relocation often limits how far they’ll go.
Nationwide, household incomes averaged $87,000 for folks who didn’t move, interstate movers had $82,000 incomes and those who relocated in-state made $66,500.
Bottom line
So why does California have this odd migration wage gap?
Coronavirus concerns nudged people to move away from densely populated places — and the Golden State has numerous, crowded metropolitan areas.
The widespread availability of remote work motivated moves out of California. And flexible office jobs — a big slice of California’s tech-savvy employment — tend to have higher wages.
Still, California did draw 412,714 new filers and dependents in 2020— the third-largest inflow. But as a share of all Californians, the new blood was just 1.3% of all taxpayers — dead last in the union. The state’s inability to attract other Americans is a big slice of California’s population-growth challenge.
So what places did the best in 2020 at gaining new residents from other states?
The largest share of new residents was found in Washington, D.C. at 7.8% of its taxpaying population, followed by Idaho at 5.5%, Nevada at 5.2%, Wyoming at 5.1% and Delaware at 4.7%. In a year highlighted by keeping your distance from others, note that Idaho, Nevada and Wyoming are among the nine most sparsely populated states. Also, Nevada and Wyoming have no state incomes taxes.
As for California’s main economic rivals, both with no state income taxes, Florida’s attraction rate was No. 16 at 3.7%; Texas was No. 38 at 2.4%.
The big caveat to these relocation trends was the many oddities of the first year of the pandemic. Will these trends stay, speed up or reverse themselves?
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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