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Despite Gov. Gavin Newsom’s (D-CA) boasting, California under his tenure has become a state that is too burdensome for many to live in. That includes middle- and lower-class families, businesses, and, allegedly, one of the top candidates for governor.
California’s population decline has been one of the most notable lingering stories from the COVID-19 pandemic. From April 2020 to July 2022, the state lost a net total of some 700,000 people. The 2020 Census put California’s population at 39.5 million, and that number has trickled down to 39.35 million, according to census data, a decline of 150,000 people. The only reason that the number isn’t higher is that the state adds immigrants (legal or otherwise) to counteract the losses.
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What is more alarming is the age and income demographics of California’s population decline. Younger Californians and their families are moving out to more affordable pastures in Texas, Arizona, Idaho, Florida, Tennessee, and elsewhere, and California’s birth rate is declining, meaning that the state’s population is getting dramatically older. According to the Public Policy Institute of California and data from the California Department of Finance, the state has seen a decline of around 700,000 people below the age of 18 since 2020, and a decline of almost 900,000 people aged 18 to 64.
The state’s elderly population aged 65 and over has increased by more than 1 million over that same period. California had 4 residents aged 18-64 for every 1 resident aged 65 and over in 2020. On the current trendline, that ratio is expected to drop to 2.8 by 2030 and 2.2 by 2060.
That means that California’s labor force is going to continue to shrink over the coming years. It also means that healthcare infrastructure will need to keep up with an aging population, and that California will likely have to spend more taxpayer money on healthcare, with around 40% of the state’s population relying on its Medi-Cal program for health coverage.
The state’s public school system is now unsustainable as well. California’s public school enrollment sat between 6.1 and 6.2 million students per year until the COVID-19 pandemic. By the 2022-23 school year, the public school system had lost a net total of 320,000 students. The California government expects that number to drop by another 390,000 students by 2031. That has led to school closures and job losses up and down the state, contributing to California having the highest unemployment rate of any state in the country.
California’s spending has continued to increase despite these departures, and so the state has had to increase taxes further to keep up. That has led to massive tax hikes on the state’s gas tax, which is now the highest in the nation, and to the introduction of new taxes, such as a proposed tax on every driver in the state per mile driven. California will, of course, have to spend hundreds of thousands (or millions) of taxpayer dollars on the latter before inevitably implementing it, because the state is nothing if not wildly inefficient.
That creates a cycle in which residents leave due to higher taxes, causing the state to increase taxes to make up for the tax revenue lost from those departures, causing more people to leave. California has tried to fix this by orienting its tax system toward relying on wealthy Californians, which creates a far more volatile system. Newsom himself admitted that California’s tax system is unreliable in 2023: “We have one of the most volatile tax structures because of the overreliance, or the disproportionate reliance, on a very small subset of tax filers,” he said.
The state is on the verge of tilting its tax structure to the volatile side even further. Democrats are planning on imposing a “one-time” wealth tax of 5% on the 200 or so people in the state with a net worth of at least $1 billion. This retroactive wealth confiscation will almost surely not be a one-off event, given that California continues to jack up spending without reliable sources of tax revenue, and the state’s wealthiest residents recognize that. Google co-founder Larry Page, PayPal co-founder Peter Thiel, and Uber co-founder Travis Kalanick have all bailed on the state already in anticipation of that tax, taking all the potential tax revenue they provide with them.
Businesses have also been fleeing California due to a combination of taxes and the burdensome regulatory environment. Japanese company Yamaha has announced that it will move its American operation to Georgia, ending a 47-year history in the Golden State. Wells Fargo, which set up its roots in California in 1852 during the Gold Rush, is moving its Wealth and Investment Management headquarters to Florida. The wealth division generated $16 billion in revenue last year. California also leads the nation in bank closures.
The fact that California is becoming unlivable for people and unworkable for businesses has bled into the governor’s race, but not in the way you might expect. Rep. Eric Swalwell (D-CA) continues to be the top polling Democrat in a field full of uninspiring Democrats, but fellow Democrat Tom Steyer is now raising questions about whether Swalwell even lives in California anymore.
The evidence is circumstantial, but it is compelling. Swalwell and his family live in a home in Washington, D.C. Having a second residence is not unheard of for members of Congress, but the circumstances around his declared California residence are suspect. For one, Swalwell’s California home is one he rents alongside another family, with the home being “owned by the sister-in-law of his political mentor, Tim Sbranti,” according to the New York Post.
Swalwell listed his attorney’s office as his home address for his campaign rather than this rented home, which Swalwell claims is because his children “are not allowed in the yard” due to the “thousands of death threats” he claims to have received, even though he posts videos of his children playing in the yard of his D.C. residence on social media for all to see. Not only that, but Swalwell also made 24 charges at luxury hotels in San Francisco in 2023 and 2024, and 19 charges alone in 2025. It is, of course, very odd for a congressman to spend that frequently at hotels in his own district.
This means it is entirely possible that the leading Democrat running for governor has joined the California exodus and has been renting a room in a house to make himself a California resident on paper, while he actually stays in hotels when he chooses to visit his congressional district.
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The best-case scenario for Swalwell, though, is that he can afford a $1.2 million home in Washington, D.C., but that even he finds California taxes and regulations so burdensome that he rents half a house in his own state. That means that the top Democrat or governor, who is going to be tasked with reversing this exodus, is, at best, a victim of the very policies California Democrats opposed. At worst, it means the guy tasked with convincing people to come back to California hasn’t even been living there for years.
One thing that is certainly undeniable is that the policies of the California Democratic Party have made this all possible. People do not willingly leave a state with the natural beauty and perfect weather that California offers unless it is so wildly unaffordable that they have no choice. Businesses don’t just undertake costly relocations unless the regulatory environment is truly restrictive and becoming more unworkable by the year. These California policies are unsustainable, and that is why people and businesses continue to give up on the Golden State.
