Shrinking California Still Dreams, but More Modestly

California has long beckoned with its coastal beauty and bustle — the magnetic pull of Hollywood, the power of Silicon Valley.

That allure helped make it a cultural, economic and political force. For 170 years, growth was constant and expansion felt boundless. And it was easy to be drawn in by the lore.

“Everybody knew that there was no prejudice or discrimination of any kind, that the streets were paved with gold and anybody could be somebody — it was the land of the future,” recalled Adrian Dove, the longtime chairman of the Kingdom Day Parade in South Los Angeles.

By early 2020, California’s population had soared to nearly 40 million residents, with another 10 million expected in the coming decades.

Then, with the coronavirus pandemic and its aftermath, the trend reversed: The state lost more people than it gained in each of the last three years and shrank to less than 39 million people. Recent data released by the state Finance Department now offers a stunning prediction: The population could stagnate for the next four decades.

Suddenly, the Golden State, so proudly aware of its popularity, finds itself having to rethink its identity.

When Mr. Dove moved as a child to Los Angeles from Dallas in 1945, he felt a sense of freedom when it came to his ambitions. Graduating from Compton High School, he went on to study at Harvard University. But now, at 88 years old, Mr. Dove acknowledges that similar trajectories can feel unattainable to many in a region that he believes has plenty of resources but struggles to spread the wealth.

“California is still the dream,” he said, “but there’s not enough for everybody.”

That feeling reverberates around the state as rents soar, the median sale price of a single family home hovers around $830,000 and homeless encampments proliferate. The promise of easy living in Mediterranean weather has faded in the shadow of a housing crisis.

“We’re witnessing the death of the thing that really made California great, which was its middle class,” said the writer Héctor Tobar, 60, whose novels have explored the economic divide in the state.

“What fueled the boom in population was the new subdivisions, it was people migrating here to get a taste of middle-class life. And today California is divided more than ever into rich and poor.”

Mr. Tobar’s own father was able to access that middle-class life, arriving from Guatemala with a sixth-grade education but managing to eventually obtain an associate degree and find work in the hotel industry. California living, he insisted, meant that his son would grow taller than him. “I guessed that we would grow up to be this race of giants,” Mr. Tobar said. “It was a place of plenty and opportunity.”

The reasons for the plateau are not surprising. Fertility rates have declined as couples wait longer to have children, focusing on education or establishing their careers. Which can often mean having fewer children or none. At the same time, the death rate is expected to rise as the baby boomer generation ages.

The most variable, and perhaps critical, component to the expected population is migration.

It is not a new phenomenon for people to leave the state to get a new job, find a lower cost of living or be closer to family. But when Covid-19 restrictions were in place, those factors were amplified. Workers were allowed to perform the same job remotely in another state while dramatically cutting their expenses. And immigration came to a standstill.

Eric McGhee, a senior fellow with the Public Policy Institute of California, said those leaving make up about 1 or 2 percent of the total population, not the exodus some would believe. (“Tell me: Where are you going to go?” former Gov. Jerry Brown once mused as he dismissed the popular notion that Californians were headed elsewhere en masse.) But, Mr. McGhee noted, those departures send a disconcerting signal about the lifestyle available in California, that the state is less welcoming to lower-wage workers and younger generations.

“There is this kind of broader philosophical question that has to do with why are we losing people to other states?” he said. “Why is it that California, which has these very dynamic industries, can’t seem to accommodate the people who want to be here?”

Politically, California’s influence could shrink while other states like Texas and Florida grow. California already lost a congressional district for the first time in its history, after the 2020 census, and could eventually lose more.

A dearth of young people and immigrants also will mean less consumer spending, and a smaller labor force, threatening the dynamism that has fueled California’s growth for decades.

California is already in a constant state of bumping up against its boundaries: the dramatic swings between flood and drought. An intractable homeless crisis that has increased tension in many cities. The collapse of Silicon Valley Bank. Even Hollywood has lost its luster as the ongoing strikes reveal deep problems for the movie industry in a digital era.

America has always had a frontier mentality, but perhaps that should be reimagined, said Chris Tilly, a professor of urban planning and sociology at the University of California, Los Angeles.

“Maybe it’s time for us to grow up and realize we live in a world of limits,” he said. “That could be a level of maturity. If California is in a position to lead the country and come to terms with its limitations on growth, that could be a way California could still be in the lead. Which could really be an interesting twist.”

Of course, the population was never meant to grow infinitely. Leveling off can be a good thing when it comes to creating more sustainable approaches as climate change forces California to think differently. The increasing threat of catastrophic wildfire, for instance, has persuaded many leaders that the state cannot keep converting rural land into large suburbs.

And California remains the most populous state in the nation, with 10 million more residents than Texas, the second-largest state. Public agencies looking at the data to make planning decisions are using it to make projections, but not sounding an alarm.

“The momentum doesn’t shift for us,” said Kome Ajise, the executive director of the Southern California Association of Governments, a joint powers authority that focuses on mobility, sustainability and livability.

“There is that mythical feel about California, but there is some substance to that draw that is more real,” Mr. Ajise said. “We have all the foundational industries, like entertainment and hospitality, and a big job market. The basic economic foundation of California is still in place.”

Natalia Molina, a professor of American studies and ethnicity at the University of Southern California, said the state’s path can be looked at “as a harbinger of what does it mean when you don’t have affordable housing, investment in social welfare, clear immigration policies.”

Yet, Ms. Molina notes that her grandmother left Mexico and arrived alone in California, then ran a successful restaurant that welcomed other immigrants. Threads of similar stories seemed apparent to her on a recent Saturday when she picked up a sandwich from a century-old restaurant started by a French immigrant in downtown Los Angeles, then drove through Chinatown, where both aguas frescas and boba can be found.

Communities have been forged here that still feel special and worth sticking around for, she said.

“As long as people are showing up and willing to do the work,” she said, “the California dream is alive and well, although a little more anemic these days.”