The other thing to remember is you generally expect population growth. Even if the decline isn't significant, it means theirs no growth. This is a good thing. California is a horrible horrible place for most working class people. You will never get ahead.
Austerity measures never help those who are struggling. It's always a reallocation of resources from those with less to those with more. And California has embraced austerity in housing and land for almost half a century now.
Under housing austerity, as the wealthier buy more and more of an ungrowing housing stock, those with more will have fewer people per house, driving a population decrease even as demand has not decreased at all, and has likely increased.
I do agree that California is currently a raw deal for anybody not in a high-paying career. Without drastic change, life will eventually get too hard for the very wealthy as they can no longer find anybody to do things such as repairing their house. We are still a decade or more from that, but this news is a very bad sign of what's to come.