by James A. Bacon
California has a lot of problems, including a dysfunctional political system, structural budget deficits and a lousy business climate. But it’s still a magnet for some of the world’s most talented scientists and engineers. According to a new Milken Institute study, “What Brain Drain? California among the Best in the U.S. at Retaining Skilled Workers,” the Golden State had nearly the best record among the 50 states for retaining skilled workers. Between 2000 and 2009, roughly 35% of skilled (college educated), native-born Californians lived outside the state, compared to 50% for the average state.
And how did Virginia fare? Not very well. Roughly 53% of skilled native-born Virginians lived outside the state during the same decade. Bottom line: Skilled Virginians are more likely to leave their home state in search of opportunity and a better life than other Americans are.
California’s Achilles heel has been its ability to lure skilled, native-born Americans into the state. But it has more than compensated by its ability to attract skilled, foreign-born workers — and to retain them at a much higher rate than the national average. (It’s not clear from the numbers how many move back to their own countries, as opposed to other states in the U.S.) Virginia, conversely…. not so good. We retain skilled, foreign-born workers at a lower level than the national average.
The Milken study warns that California must avoid complacency. Technology clusters are developing in other regions of the country — Texas, in particular, has an even better track record of attracting and retaining skilled workers.
Californians also should be alarmed by the mounting dissatisfaction of many businesses, a problem highlighted in a Wall Street Journal op-ed published today by Steve Malanga. California perennially ranks near the bottom of “business climate” surveys, and nobody’s perceptions seem more negative than those of California businesses themselves. He writes:
According to a poll by a California coalition of businesses and industries, 84% of executives and owners said that if they weren’t already in the state, they wouldn’t consider starting up there, while 64% said the main reason they stayed was the difficulty of relocating their particular kind of business. For several years in a row, California has ranked dead last in Chief Executive magazine’s poll about states’ business environments.
Despite their unhappiness, most businesses stay. And the access to human capital is undoubtedly a major reason why.
Meanwhile, Virginia may revel in its “best state for business” awards but outside of Northern Virginia, the state’s economic performance plods ahead roughly in line with the national averages. We may excel at traditional, ’70s-era corporate recruitment, which may account for 20% or so of new job creation, but Virginia still has no coherent policy to recruit and retain top scientific, technical and entrepreneurial talent — the so-called creative class so critical to economic growth.
At least we can look forward to the completion of the Longitudinal Data System that will allow researchers to track the movement of Virginians of varying levels of educational achievement into the workforce and in/out of the state. One day we’ll be able to routinely conduct the same kind of analysis as the Milken Institute, though at a far greater level of detail. Maybe we can start thinking seriously then about our own Brain Drain.
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