Silicon Valley saved California during Covid, but people still want to leave
For all the talk of a California exodus, the largest U.S. state is in the midst of an economic resurgence.
When Covid-19 shut down much of the economy in early 2020 and forced office workers to log on from home, some in the tech industry packed their bags, publicly announcing their permanent departure from California. Others just hit the road, uncertain of where the future would take them.
Whether it was high taxes, political disenchantment, rising crime rates or the devastating wildfires that arrived earlier than normal and produced toxic air across wide swaths of the West Coast, California residents found many reasons to seek refuge elsewhere. For those with office jobs, escaping was easy because they could suddenly work from mountains, beaches, campsites and rental homes along the way.
Some of the criticisms of California are the same as ever: State income taxes are the highest in the country. Regulations are stifling. Red tape is everywhere. Living costs are crazy.
Others were Covid-specific: The response has been choppy and seemingly arbitrary. Schools and businesses were closed for way too long. Gov. Gavin Newsom, a Democrat, looked like a hypocrite for attending a dinner party at the French Laundry restaurant, where a meal costs around $300 a person, while many businesses in the state were shuttered and citizens uncertain as to whether it was safe to go out at all.
Newsom’s erratic leadership frustrated enough people to inspire a recall campaign that’s likely going to hit the ballot this fall, echoing the successful 2003 recall of Democratic Gov. Gray Davis and his replacement by Republican Arnold Schwarzenegger.
But despite all the fuss, it turns out that the industry best prepared to weather the pandemic was still centered in California. Even as notable names like Oracle, Palantir and Hewlett Packard Enterprise decamped and population growth stagnated, the financial success of the tech sector during the Covid pandemic helped propel California to a $15 billion tax surplus for the upcoming fiscal year — a sharp turnaround from last year’s projected $54 billion deficit.
The stock prices of Apple, Facebook, Alphabet and Netflix soared to all-time highs. Shares of videoconferencing company Zoom climbed fivefold as it became a household name. Emerging companies Snowflake, Airbnb, DoorDash and Unity held some of the biggest IPOs on record, producing windfalls for employees and investors.