For skilled workers, California is the place to be

SANTA MONICA
October 12, 2011 8:48am
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•  New report shows no ‘brain drain’

•  ‘The numbers tell a story quite different from what people seem to believe’


California continues to have allure, at least for skilled workers, according to a new report on the ebb and flow of labor by the Milken Institute.

The idea that high-skilled workers are leaving in droves is not true, says the report, "What Brain Drain? California Among the Best in U.S. at Retaining Skilled Workers." The study examines data for skilled workers across the country, defining them as holders of at least a bachelor's degree, and between the ages of 25 and 64.

"Because the major disadvantage of out-migration for any state is the loss of skilled young workers, we were pleased to see that the numbers tell a story quite different from what people seem to believe about the flow of labor and California," says Ross DeVol, the Institute's chief research officer. The report's findings will be discussed at the Milken Institute State of the State Conference on Thursday in Los Angeles.

After examining labor flows to and from all 50 states, the Milken research found that -- contrary to some popular misperceptions -- in the last decade California has the least annual "skill out-migration" relative to the total of skilled residents.

California is a close second among states in its retention of its own high-skilled natives. Over the past decade, about 65 percent of skilled California natives were living and working in the state, far above the national average of about 50 percent. Only Texas scored higher, with nearly 70 percent of its skilled natives living in the state.

In the decade 2000-2009, California's "skill outflow" -- basically, the number of skilled workers leaving the state -- averaged 2.2 percent a year, a percentage point less than the national rate.

The Golden State continues to be a powerful magnet for skilled immigrants from around the world, the report says. Once foreign-born skilled workers come to California, they tend to stay; the outflow rate for this group was the lowest in the nation.

Of those who did leave the state in 2009, 12 percent went to Texas, the biggest single destination for skilled Californians. Overall, however, California had a lower skill outflow rate than Texas.

Today, California's ability to attract skilled workers from other states is less than in the past, in part due to job losses in the high-tech sector, says the report. But the state's continuing ability to attract skilled workers from abroad more than makes up for the gap.

"Most important in California's case, the concentration of young innovators with advanced skills has been key to the success of Silicon Valley and other innovation clusters," says I-Ling Shen, a senior research analyst at the Milken Institute. "These clusters collectively act as an economic engine that breeds other industries providing professional, financial and personal services."

The report's policy recommendations conclude that although California has managed to keep skilled individuals within its borders, it can't rest on its laurels, especially if foreign-born skilled workers respond to new opportunities in their native countries when the world economy recovers from the Great Recession.

"Policy efforts will be needed if the state intends to maintain its competitiveness and its leadership position," says Mr. DeVol. "Nurturing the tech industry, maintaining the state's education system, and further developing a home-grown talent pool will be increasingly important in the years to come."

The Milken Institute describes itself as a nonprofit, independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations around the world by helping business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity. It is based in Santa Monica.


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