Small States, Big Economic Gains

March 17, 2021
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Author: Glenn Hunter

After decades of leading the nation, the rate of California’s population growth has slowed in recent years, and in 2020, the Golden State made news when it actually lost population. What many may be surprised to learn, though, is that California’s loss has meant big gains for a few less-populated states in the Mountain West. That’s good news for talent acquisition professionals in those smaller states.

Small states have gained in population and job growth as more people flee California.

LaborIQ reports one out of every three people who’ve left California over the last decade have moved to Utah, Idaho, Nevada, Arizona, Colorado or Washington state. If you throw in Texas and Oregon, half of all the people who flee California wind up in one of those eight states.

U.S. States with the fastest growing populuations (2010-2020):
1. Utah 17.1%
2. Texas 16.3%
3. Idaho 16.3%
4. Nevada 16.1%
5. Arizona 15.8%
Sources: LaborIQ by ThinkWhy, U.S. Census Bureau

“You wouldn’t be surprised (either) if you were in touch with undergraduate students just leaving the university,” said Wanamaker, an associate professor of economics at the University of Tennessee and a ThinkWhy Executive Advisory Board member. “The world is wide open (to them) and they can go anywhere, and they’re ending up in Utah and Idaho and Texas more often than I’d like to admit.”

Exodus from Urban to Suburban Areas

The LaborIQ research is consistent with other studies, which show Americans leaving dense urban areas in the Northeast, Midwest and California during the COVID-19 pandemic for less dense suburban areas in the South and West.

“Talent

Utah and Idaho underscore the trend, with population growth leading to job growth as well. Utah’s population grew by 485,000 (between 2010 and 2020), while Idaho saw an increase of 259,331 residents during the same period.

In its December 2020 ranking of annual job growth among all U.S. metros, LaborIQ found that Idaho and Utah each had two cities among the top 10. Idaho Falls ranked at No. 1 for year-over-year job growth, at 4.9%, while Twin Falls, Idaho, was No. 5, with 1.9% growth. Meantime, Utah’s Ogden-Clearfield metro was No. 3, with 3% growth, and St. George, Utah, was No. 9, with 1.1% growth.

Idaho and Utah have lured new residents partly because of their affordability and relatively low tax rates. Utah’s population has also grown because it has a high birth rate. The majority of its residents are Mormon, and Mormon adults have more children on average than most U.S. adults.

States like Utah and Idaho will continue attracting people from regions with greater density and higher taxes, Wanamaker believes. “It really is going to intensify this recruitment effort: more companies, more people, more retirees – come one, come all,” she says. “I really expect that to be the theme for some of these southern and western states over the next few months and years.”

LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.