Demographics are so important in the decline and fall of states and the economy because regions like California need to have a healthy balance of the elderly, young, and those in between that enables the capital flow and labour costs.

This is integral in an environment where companies with access to young and low Labour and capital make investments possible.

One of the greatest capital opportunities existed for the Boomer generation born between 1946 to 1964.This generation typically entered the workforce in the late 1960s and early 1970s.With the entry of the world’s largest generation into the global and domestic work markets, the cost of labour dropped due to so many people working in the workforce, making Labour cheaper and a more business-friendly environment.

The boomers, in terms of professional success, reached their greatest achievement in the 1990s and 2000 due to them reaching the sweet spot between 35 and 55, where people tend to invest what spare money they have in investments.

Over the past 25 years, because of the environment and the cheap capital and easy capital available for start-ups enabled the phenomenal success and the tech boom in the 1990s and 2000 integration of new technologies like the smartphone.

Demographics: The Decline of California — Photo by Maarten van den Heuvel on Unsplash

The Success of California

California has been one of the most successful states in the US, primarily because of things outside its control.

Still, it should be noted that 40% of the population of the USA lives near coastal cities and regions and that most economic activity still occurs near major waterways.

Large-scale inward international immigration has enabled California to continue its population growth.

Unfortunately, this is an artificial dependency on internal migration within the United States of America and immigrants, particularly from the Far East and the Pacific, which is not addressing the internal issues causing California’s decline.

Californians suffer the same demographic problems as the rest of the global North regarding the creation of future generations to continue the legacy of the nations and regions.

Without the birth of new generations, the only option is immigration.

For this addressing the issue of declining birth rates, the problems of California are structural such as a higher cost of living and the culture not being pro-mother.

The millennial desire for an urban coastal experience has kept California from declining millennial generation was born from 1981 to 1996 and was the last generation to grow up without the dominance of social media.

However, they experienced this in the mid-2000s with the creation of Facebook in 2004, YouTube in 2005, Twitter in 2006, LinkedIn in 2003 and Instagram in 2010.It has brought a constant influx of people in their 20s and 30s, which has helped with taxes and a steady labour force.

Now combine all these people with a rich capital environment and boom, which enabled the existence of places like Silicon Valley.

Ideas flow from the tech startups in the valley to factories in China, Japan, and Taiwan, making California the gateway to East Asia.

And when those products get imported back to the States, their first stop is the Long Beach Port along CA’s coast.

This is just another external element contributing to California’s solid economic model.

But now, all the factors that have propped up California are flipping.

Immigration is stalling. The capital situation is upside down. The cost of living is through the roof, so the labour force is moving to places like Texas.

The data used in the study analysed the cost of living in each city as of 2022.

For California cities like Los Angeles, Berkeley and San Diego, a single person must make more than $76,000 to ‘live comfortably,’ the data show.

Unfortunately, the average salary in California is about $65,539. It is slightly lower than the national average of $66,665.Rising tensions with Asia are causing reshoring and nearshoring. The only thing California can do now is reinvent itself.