Why Texas Is on Track to Overtake California as America’s Most Populous State
For more than half a century, California has been America’s most populous state, a title it took from New York in the 1960s. But it was never merely a demographic leader. California was also an industrial, agricultural and technological powerhouse, as well as the country’s cultural capital.
The most serious challenge comes from Texas, where pro-business policies, lower taxes and a rapidly expanding tech economy have created a powerful magnet for companies and workers. People are voting with their feet.
By 2050, Texas is projected to surpass California in population, driven by both migration from abroad and domestic migration. Its economy is growing faster, and it has become the base for a growing list of companies that used to call California home. This year, for the first time, Texas hosts more of the nation’s largest-company headquarters than either California or New York. Even The Economist, which rarely indulges in state boosterism, recently called the Lone Star State “America Inc.’s new centre of gravity.”
The reasons for the shift should worry Californians. It isn’t the weather or the scenery, and it isn’t abortion policy. Nor is it a sudden superiority in brainpower. California still has four of the country’s leading engineering schools — Stanford, Caltech, UCLA and Berkeley — compared with one Texas school. Texas did not manufacture California’s decline. To borrow from Shakespeare, the fault lies not in the stars but in ourselves.
Hollywood’s broken mirror
Start with the cultural mindset. For much of the past century, California supplied the nation’s dreamscape. Los Angeles offered an alternative to the East Coast intellectual establishment, which often looked down on the rest of the country. Hollywood embraced America, producing Westerns, war films, detective stories and small-town dramas, nowhere better exemplified than Frank Capra’s “It’s a Wonderful Life.”
Today, a significant part of Hollywood seems uninterested in, if not contemptuous of, the country that built it. Radical politics have seeped into the programming. Last year’s “One Battle After Another” — an Oscar winner that did poorly at the box office — lionized undocumented immigration, the shooting of law-enforcement officers and revolutionary violence. It was a telling example of an industry losing touch with its audience.
Hollywood has been shedding its audience for years, with only occasional blockbusters masking the trend. The stars are still well paid and heavily covered, but the industry’s footprint is shrinking: nearly 42,000 entertainment jobs disappeared from the region in 2024 and 2025.
Competition is arriving from all directions. Atlanta, Nashville and even New Jersey are adding studios and entertainment jobs. Paramount is reportedly considering leaving the state. Taylor Sheridan, the creator of “Yellowstone” and “Landman,” is building a major studio in Fort Worth. His work is largely ignored by the progressive wing of the industry, but it tells American stories with warts and all, and without condescension.
The high-tech pull
The same pressures are reshaping high-tech. California’s steep energy prices could become a serious obstacle to AI expansion, which demands huge amounts of electricity. A looming wealth tax has made the state less friendly to founders and investors. In California and elsewhere, progressives increasingly oppose new data centers and have begun imposing anti-competitive regulations on AI.
The SpaceX blow
The most consequential loss may be in the space industry. California effectively drove out Elon Musk and SpaceX, a company founded in California and still heavily dependent on the state’s technical talent. In doing so, it handed Texas the advantage in perhaps the most promising industry of the future.
Rocket production that should have gone to San Pedro, the Inland Empire or the Sacramento-San Joaquin Delta is instead centered in Brownsville and Bastrop. Musk also plans a new chip factory outside Houston that, if built, would be the largest building on Earth. The same story is visible at Starlink’s headquarters in Bastrop, a small town 30 miles from Austin’s airport. The gleaming campus now sprawls across the Texas prairie, and expansion is planned. Seeing it, one thought comes to mind: It should have been in Long Beach.
Who gets left behind
California’s share of high-tech jobs has fallen from 19 percent to 16 percent since 2019. The state still has unmatched expertise, but preeminence is not permanent. New York and Massachusetts were once leading tech players too.
San Francisco is emerging as a center for AI research, but this boom is unlikely to create net new tech jobs. It is mainly rewarding investors, a handful of entrepreneurs and highly compensated “genius” programmers. For middle- and working-class Californians in San Bernardino, Oakland or South Los Angeles, there is little opportunity in that equation. Their only real benefit may be that huge capital-gains fortunes keep the welfare state going — at least until the AI bubble bursts and more billionaires leave.
To thrive again, California needs to restore opportunity beyond elite industries and elite research. It has to rebuild opportunity for blue-collar workers and the business-service jobs that support everyday families. Right now, it isn’t doing that.
Texas, with its brutal summers, unremarkable scenery and occasionally coarse culture, is doing it.
Joel Kotkin is Presidential Fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute.