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Saturday, July 2, 2022

Quantifying Our California Connection

In the winter of 1852, just a few months after an intrepid group of settlers led by Arthur Denny set up camp on Alki Point, the business community of the new city of Seattle concluded its first transaction: the sale of a load of logs to a ship bound for San Francisco. For the remainder of the 19th century, Seattle served as a sort of colony of Northern California, providing it with raw materials, lumber, fish, coal and whatever else the booming Bay Area needed. In return, Seattle got manufactured goods that had been imported from the East. Seattle did not really come into its own until it got its own transcontinental railroad in 1893 and usurped San Francisco’s role as the premier seaport on the West Coast.

The Seattle-California connection established in 1852 continues as strong as ever. In some ways Seattle is fated to be the eternal little sibling to the Bay Area and the Los Angeles area: smaller, less glamorous, frequently ignored, sometimes disdainful, sometimes envious.

Flowing up and down the coast

While we may feel brushed aside by Californians, a whole lot of them do move here. There has always been a steady stream of two-way traffic up and down the West Coast: nearly 9 percent of Washington residents were born in California, and about 0.6 percent of California residents were born in Washington. Over time, about 20 percent of domestic in-migrants to Washington come from California. As we move into the post-COVID world, choices about where to live will have new dimensions that will almost certainly alter the Seattle-California connection.

Geographic proximity is not the only driver of the Seattle-California connection. Seattle has long shared common industries with both northern and southern California. Most notably, Los Angeles is a major center of the aerospace industry, so skilled workers will tend to flow back and forth as the fortunes of various West Coast firms change. And the information technology industries of the San Francisco/San Jose corridor complement the IT sector of the Seattle area, with movement of not just workers, but entire business operations. There is also a large flow of military personnel between bases in California and bases in Western Washington.

Figures 1 and 2 show the flows of people between King County and the major metro areas of northern and southern California. The Northern California figures include the San Francisco, San Jose and Sacramento metro areas. The Southern California figures include the Los Angeles, Riverside and San Diego metro areas. The data is based on address changes on IRS tax returns filed during 2018 for the 2017 tax year.

The first thing to notice is how large the gross migration is, compared to the net. In 2011, the net flow of people between the Northern California metro areas and King County was near zero, but over 3,300 people moved in each direction. In 2010, net migration from the southern metro areas was near zero, but over 4,000 people moved each way.

A second thing to notice is the surge in migration from both northern and southern California to King County beginning in 2016. The IRS data are consistent with the trend in driver’s license trade-ins reported by the Washington State Department of Licensing (DOL). DOL data show a slight slowing in California migration continuing into early 2019, but an increase of about 15 percent in the six months prior to the coronavirus shutdown.

California is losing people

The net flow from California to Washington is part of a larger trend of population flows out of California to the rest of the country. Figure 3 shows the top state destinations for people moving out of California between 2017 and 2018.

Washington is the fourth largest destination for outbound Californians. But at 59 California migrants per 10,000 population, Washington is not nearly as impacted as Nevada, Arizona, Oregon, Idaho and Hawaii.

The exodus is happening statewide. Figure 4 shows the migration pattern by county for 30 counties that make up over 95 percent of the California state population.

Only two counties in the state saw a net increase in population due to domestic migration. San Francisco County had a small increase, and the state’s smallest county, Alpine (not shown) had a net increase of two people due to domestic migration. Figure 4 shows estimates for net international migration (separate inflow and outflow data are not available for international migration). In some cases, such as Los Angeles, Alameda and San Francisco counties, international migration was strong and offset domestic out-migration, to result in a net positive overall migration for the county. But for the state as a whole, international migration did not prevent a net loss of population due to total migration.

California still has a strong natural population growth rate, with five births for every three deaths, so the population continues to grow. Out-migration of retirees seeking lower cost states, combined with a strong birthrate puts California’s median age 1.5 years below the national average.

Looking Ahead

The coronavirus crisis has had a strong geographic dimension. It has had widely varying affects in different places due to epidemiological factors and public response. It appears that the danger of infectious disease—whether this particular virus or the next one—will be a fact of life for the foreseeable future, and that will, in turn, affect decisions about where to live. How all this plays out in California, the largest state in the country, a close neighbor of Washington and a place with strong interpersonal ties, will have a large impact on future growth in the Seattle area and Washington State.

Michael Luis
Michael Luis
Michael Luis is a public policy consultant who has been wrestling with housing, growth and economic development issues around Washington State for over 30 years. He is author of several books on local history and served as mayor of Medina.

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