Demographics and Economic Analysis. Demographic change plays a major role in driving economic trends. As we at the LAO develop our own economic and tax revenue estimates, our process always begins with analysis of key population trends in California. In our recent Fiscal Outlook, we noted our projection that California's population will grow by 0.4 percent to 0.8 percent per year over the next several years.
California's New Hispanic Plurality. We project that Hispanic Californians will become a plurality of the state's population (exceeding the number of non-Hispanic whites) at some point during the 2010s. The state's Department of Finance (DOF) announced in 2013 that this would occur in 2014, according to their projections. As a result of all of these trends, DOF noted last year that a smaller portion of the working-age population will be white and larger portions Hispanic and Asian-American in the coming decades.
Still, California is A Young State. According to DOF projections, "California will remain one of the younger states in the Union for the next 20 years." Because of "California's diversity and because of its role as the primary gateway state for immigration, California will not age as rapidly in the coming 20 years as many other states," DOF said.