Legal immigration, lower mortality rates led to California’s first population increase since the pandemic

California said its population grew last year for the first time since the pandemic began in 2020 amid decreased mortality and a pickup in legal immigration, indicators that may provide benefits to the world’s fifth-largest economy.

A report released Tuesday by the California Department of Finance showed that as of Jan. 1, the state’s population increased 0.17% to 39.13 million, adding over 67,000 people. Of the state’s 58 counties, 31 had gains, with most of that growth concentrated in the Bay Area, Central Valley and Inland Empire near coastal Southern California. 

Seven of California’s 10 largest cities gained residents in 2023. Bakersfield experienced 0.8% growth, the highest rate among the state’s 10 largest cities. Los Angeles and San Francisco grew at rates of 0.3% and 0.1%, respectively. Still, parts of Southern California and the Bay Area lost population, with Long Beach shedding 0.2% and Oakland losing 0.5%.

“With immigration processing backlogs largely eliminated and deaths returning to long-term trends, a stable foundation for continued growth has returned,” the report said.

California’s fiscal strength is largely dependent on its highest earning-residents and its immigrant workforce. Almost half of the state’s income tax collections come from residents in the top 1% of income earnings. 

But more than 50% of all the state’s workers are immigrants or children of immigrants, according to the California Budget and Policy Center. Consequently the state’s economy took a wallop when the pandemic slowed immigration to a near-halt and white-collar workers moved out of the state in increasing numbers to take advantage of work-from-home policies and flee high state income taxes.

Population growth last year was accompanied by an uptick in housing statewide. California added 115,933 net units, including 22,802 in accessory dwellings, to bring total housing in the state to 14,824,827 units. Los Angeles, San Diego, Riverside County, San Francisco, and Oakland added the most housing in 2023.

Despite the recent growth, California’s population is still about 400,000 below where it was before the Covid-19 pandemic. The drop caused the state to lose a House seat in Congress in 2021.