Where are people moving? And why?

Over at Econlog, I have a post discussing the slowdown in US population growth, to 0.6% in 2018 (the slowest growth rate since 1937.)  A WSJ article also had some interesting data on state growth rates:

Screen Shot 2018-12-20 at 7.49.53 PMThe footnote on Puerto Rico is rather striking, as its population fell by 4% last year.  That was partly due to hurricane Maria, but its population has been plunging for many years, down about 14% since 2010.  Who’s going to pay off that enormous debt, and will the last Puerto Rican please turn out the lights? Hawaii is also losing people, as are Mississippi and Louisiana.  So the “Sunbelt” phenomenon is more complex than advertised.

Other trends:

1.  Mormons have lots of kids.  The four fastest growing states are all in the top five in terms of percentage of the population that is Mormon, although only in Utah and Idaho are they numerous enough to dramatically impact population growth.  (The other top five Mormon state (Wyoming) is losing people.)

2.  Illinois has been losing about 40,000 people each year, while other Midwestern industrial states like Michigan and Ohio keep growing (albeit slowly).  What makes this surprising is that Illinois is dominated by one of the few Midwestern industrial cities to successfully reinvent itself.  Chicago has a thriving lakefront area full of high paying jobs, while Detroit, Flint, Cleveland, Akron and Dayton have languished.  This Illinois underperformance may reflect the extraordinary incompetence of the Illinois state government, which is driving the state toward a fiscal crisis.  Illinois is dominated by Cook County, which has a corrupt political culture.

3.  As recently as 2013, New York had more people than Florida.  Now Florida has 1.75 million more than New York.  Indeed 35% of US population growth now occurs in Florida and Texas.

4.  The sunny, oil-rich states that border Texas continue to do very poorly, either falling in population or growing much more slowly than the national average.  Texas probably benefits from a mixture of no state income tax, lax zoning, and business friendly regulations.  While other inland states also have cheap housing prices, Texas has cheap housing prices in big urban areas.

5.  It now seems like the lack of a state income tax doesn’t provide much gain to states without a big city, such as Alaska, Wyoming and New Hampshire.  The exception is South Dakota, which is doing modestly better than its neighbors.  In contrast, states with big cities and no state income tax (Texas, Florida, Nevada, Washington, Tennessee (on wages)) tend to grow faster than their neighbors.  I think that’s because the lack of a state income tax is especially attractive for the sort of high paid professionals that live in big cities.

6.  The recent federal tax reform will raise the effective top rate on the California state income tax from about 8% to 13.3%.  Many rich people (like me) will continue to choose California, due to its amenities.  But at the margin, a few more will make the switch to Austin or Seattle or Vegas.  California always used to grow faster than the US as a whole.  Even when whites started leaving for other states, the overall California population kept growing at a good clip due to international migration.  But now its growth rate (0.4%) has fallen below the national average.  Eventually, California may begin losing Congressional seats.

7.  Today, most of our population growth is in three areas.  The southeast (Raleigh to Miami), four big Texas metros, and the non-California west (the Denver/Seattle/Phoenix triangle.)

What are the odds that the world’s two richest guys would live in the same medium size city, in the only liberal state without a state income tax?




29 Responses to “Where are people moving? And why?”

  1. Gravatar of Justin Justin
    21. December 2018 at 13:39

    Texas is a fascinating place in this regard. You have many years in a row of 100k+ population growth just in DFW, and companies are moving in all the time. Just last night I heard speculations that Apple might be in the process of moving a lot of operations to TX.

    The big difference I see in TX, as compared with the Bay Area, Los Angeles or the Northeast corridor, is the synergy between big corporations and the state government. Major roadways are being built all over DFW, and massive cities/economic zones are being (or already have been) integrated via these roadways into the existing network of employment/housing/consumer-spending nodes based around the poles of Dallas and Fort Worth. It’s basically a gigantic zone for making and spending money, tasteless and dehumanizing for sure, but I prefer it to the way things are run in New England or Pennsylvania, where you’re stuck in traffic on a road way that hasn’t been substantially expanded since 1970. At least Texas is honest about the nature of modern life, and tries to make atomization and materialism work better.

    The biggest downside to TX isn’t the gauche materialism, but the *heat*. Hard to believe so many people are willing to put up with the summers. This is the price to pay for getting high wages with a flyover cost of living.

  2. Gravatar of stoneybatter stoneybatter
    21. December 2018 at 14:26

    Scott, I struggle to understand your comment on Illinois. You seem to think Chicago is a bright spot, but Cook County has a corrupt political culture. Aren’t these mutually exclusive? What advice would you give to a city or county government facing a population exodus and declining industries?

  3. Gravatar of todd sawicki todd sawicki
    21. December 2018 at 16:06

    scott – how in the world is seattle a medium sized city? in terms of MSA it’s top 15 which means it’s top 10% soooo not at all a medium sized city (source: https://www.statista.com/statistics/183600/population-of-metropolitan-areas-in-the-us/)

  4. Gravatar of Benjamin Cole Benjamin Cole
    21. December 2018 at 17:00

    Great comments by Justin.

    I am not sure about the “lax zoning” in Texas. Maybe it is just sensible zoning.

    Indeed, how can anybody write about migration within the US without discussing property zoning and property prices?

  5. Gravatar of ssumner ssumner
    21. December 2018 at 18:03

    Justin, I actually don’t mind the heat, but I know that most people do.

    Stoneybatter, I meant the lakefront area of China is very prosperous, but Cook County is not doing anywhere near as well as it should given that advantage (over Detroit and Cleveland)

    The advice would be to reduce costs by outsourcing to cheaper providers of services. End sweetheart deals with public employee unions. Run the state more like Texas.

    Todd, OK, but it’s not in the Shanghai, Tokyo, New York, London, Paris, LA, Seoul, Beijing, Shenzhen, Chicago, size category. But yes, in American terms it a big city–fair point.

    Ben, Lax is sensible.

  6. Gravatar of Kgaard Kgaard
    21. December 2018 at 20:37

    On Mormon fertility rates: Nick Land has a mantra that “Gnon doesn’t care.” The future belongs to those who spawn, and whatever philosophy generates the most spawning is the best one from the perspective of the future. So, viewed in that light, Mormonism is the best religio-political philosophy America has.

  7. Gravatar of Christian List Christian List
    22. December 2018 at 05:05

    What are the odds that the world’s two richest guys would live in the same medium size city, in the only liberal state without a state income tax?

    scott – how in the world is seattle a medium sized city?

    I thought he meant Medina. It sees itself as a separate city.

    So why Medina? It’s the second richest city in Washington, right next to the richest city (Hunts Point), which is adjacent to it. This spot seems to be the most popular place for the super-rich in Washington.

    My personal swipe at Gates and Bezos, the super-liberals: 0,3% Blacks. 2,5% Hispanics. All entrances to the area are a 24 Hour Video Surveillance Area. Oh, the hypocrisy.

    So why Washington? You already said it. Liberal and no income tax.

    So why both of them together in Washington? Maybe it’s the industry. Washington seems to be a good place for this new form of industry.

    Or Bezos is proud that he has overtaken Gates, and wanted to rub Gates’ nose into it, right in front of him.

  8. Gravatar of ssumner ssumner
    22. December 2018 at 09:03

    Kgaard, Even better are the cultures of Niger and Mali, who make the Mormons seem almost childless by comparison. We should take in more immigrants from those places, to inject some dynamism into our sterile country. Is that where you’re going with this?

    Christian, No, there’s no hypocrisy in rich people living in rich areas, unless Gates and Bezos claim that billionaires should live in poor areas. Do they?

    You are one of the laziest, sloppiest thinkers I’ve ever come across. Nothing but meaningless cliches.

  9. Gravatar of Kgaard Kgaard
    22. December 2018 at 16:19

    Well the people of Niger and Mali are not Americans. Yes they spawn at tremendous rates but cannot properly self-govern. Self-government at any level of complexity requires a minimum IQ of 96.

    The average IQ in Niger is 69.

    The average IQ in Mali is 74.

    Average Mormon IQ is 106.

    For America to have a good future, we should be finding politico-religious philosophies that encourage spawning among those with high IQs.

  10. Gravatar of Arilando Arilando
    23. December 2018 at 09:30

    ssumner, the obvious point is that pro mass immigration billionaires like Bill Gates choose to live in neighborhoods that are largely unaffected by mass immigration. That is, they support policies they claim are for the nation’s good, but choose to live their life in such a way that those policies they endorse have very little impact on their day to day lives. Whether or not that fits some definition of hypocrisy i do not know, it is certainly reprehensible behavior.

  11. Gravatar of ssumner ssumner
    23. December 2018 at 09:53

    Kgaard, So when you said this:

    “The future belongs to those who spawn, and whatever philosophy generates the most spawning is the best one from the perspective of the future.”

    You didn’t really mean it? After all, doesn’t the philosophy of poverty generate the highest birth rates?

    Arilando, I have no idea if that is true. Many of our richest live in Silicon Valley and Manhattan, areas full of immigrants.

    In any case, there’s no hypocrisy in favoring a public policy of more immigration, because it makes the world a happier place, and also trying to make yourself happy by living in a mansion. Perhaps you are confused about the meaning of ‘hypocrisy’. I am opposed to the Social Security system, and yet plan to collect Social Security. Does that make me a hypocrite? I oppose tax deductions, and yet take tax deductions. I oppose public schools, and sent my daughter to a public school.

  12. Gravatar of Tom Tom
    23. December 2018 at 14:26

    Scott, I think you’re too hand-wavey when it comes to discussing no state income tax for states without a large city.

    New Hamphshire has been the fastest growing state in the Northeast for decades. It’s just the entire northeast has been slowing down. In recent years, some other states in the Northeast with large metropolises may have been growing faster, but it’s still growing much faster than it’s New England counterparts of Maine, Vermont and Rhode Island. Wyoming and Alaska have slowed down due to low energy prices, which have a larger effect than a state income tax, but both have been growing fast for decades.

  13. Gravatar of U.S.A. fact of the day | AlltopCash.com U.S.A. fact of the day | AlltopCash.com
    23. December 2018 at 21:43

    […] is from Scott Sumner.  And here is Scott’s post on how the United States is coming more like […]

  14. Gravatar of Bob Bob
    24. December 2018 at 07:04

    Those two very rich people just happen to live in the same city because it’s one of the few places where tech flourishes, and it’s not as if programmers move due to taxes. You have mora then your fair share of people with a 9 figure net worth in the bay too. The bay, despite its taxes, has a major legislative advantage to for big companies: Non competes are unenforceable in California, unlike most of the US. That, along with a serious investor class, is more than enough to keep CA growing economically, although not necessarily as far as population, due to insane local zoning and building laws.

    What will be interesting is precisely the disparity between the places where those in a path to very high incomes move to, and the places where people go for much lower growth slopes. Wealth inequality concentration is happening, whether we like it or not, and we will see if it has any real implications over the coming years.

  15. Gravatar of ssumner ssumner
    24. December 2018 at 09:07

    Tom, I used to talk a lot about New Hampshire’s fast growth, and thus was shocked when Massachusetts started growing faster. I still think a lack of state income tax is a net plus, but not as much as before for non-urban states.

  16. Gravatar of anon/portly anon/portly
    24. December 2018 at 10:11

    You know, you can google a place name and then click on “maps” instead of just making inane comments. Medina and Hunts Point aren’t cities at all, they’re just small (Medina) and tiny (HP) suburban communities between Bellevue (a city) and Lake Washington. Hunts Point is popular with rich people because lakefront real estate is popular with rich people – Hunts Point is a “point,” or a little peninsula of land sticking out into Lake Washington, so a large percentage of its residents are actually living right on the lake. Median is roughly a rectangle about .5 miles wide and 2 miles long where the West and South sides border the lake, and Bill Gates’s famous mansion in Medina is (or was, if he’s moved somewhere else and I haven’t been paying attention) on the lake also.

    As far as why Microsoft is located in the Seattle area, the answer (or a large part of it) is obvious – Gates and Allen are from here.

  17. Gravatar of anon/portly anon/portly
    24. December 2018 at 10:30

    Arilando: “That is, they support policies they claim are for the nation’s good, but choose to live their life in such a way that those policies they endorse have very little impact on their day to day lives. Whether or not that fits some definition of hypocrisy i do not know, it is certainly reprehensible behavior.”

    SS: “In any case, there’s no hypocrisy in favoring a public policy of more immigration, because it makes the world a happier place….”

    Arilando’s comment, and the thinking behind, is even worse than SS suggests. It’s not just that immigration might be a “good,” not (as Arilando’s comment pointlessly presupposes) a “bad.” It’s that someone like Gates might *believe* that it’s good. Obviously the evidence for harm from immigration (at least in the US) is not at all clear. It’s an issue where reasonable people can disagree – we’re all allowed to have preferences. But it’s *not* an issue where reasonable people can call people who disagree with them “reprehensible.”

    If Arilando wants to call anyone who doesn’t hold Arilando’s views “reprehensible,” simply for not adopting Arilando’s
    own views on this or that issue, that makes Arilando simply an ass.

    Obviously none of us are generally exposed to the downside of our own policy preferences, whatever they are. And all policy preferences have upsides and downsides. I would never call Arilando “reprehensible” for having anti-immigration views, simply because he himself is not one of the world’s citizens whose suffering might be greater because of the implications of his views, if realized. However if he doesn’t believe himself to be in the same situation as Gates, vis-à-vis charges of “hypocrisy,” he’s a fool. We’re all in that situation, every time we advocate for anything.

  18. Gravatar of U.S.A. fact of the day – Marginal REVOLUTION U.S.A. fact of the day - Marginal REVOLUTION
    24. December 2018 at 13:33

    […] is from Scott Sumner.  And here is Scott’s post on how the United States is becoming more like […]

  19. Gravatar of Benny Lava Benny Lava
    24. December 2018 at 15:10

    Interesting piece. I remember in last decennial Michigan lost population, far worse than Illinois or Ohio. This time around Illinois is the Rust Belt basketcase. Of course there is more to Illinois than Chicago and a lot of small cities like Rockford aren’t doing well. The biggest issues for that area is the pensions. Hard to fill the coffers when population is shrinking.

    California seems like it is basically completely developed. I don’t see how growth rates will be much above static out there.

    In the future I expect America’s population growth to flatline and a lot of the internal migration to slow. According to Tyler Cowen the internal migration has already slowed.

  20. Gravatar of ssumner ssumner
    25. December 2018 at 09:38

    Benny, Also, the zoning restrictions are a huge problem here in California. With Texas style zoning we’d still be growing fast.

  21. Gravatar of Floccina Floccina
    26. December 2018 at 07:09

    I agree with anon/portly, you cannot fully count Bill Gates because he is from Washington state. He didn’t leave so half credit to no state income tax Washington state.

  22. Gravatar of Floccina Floccina
    26. December 2018 at 07:33

    @Kgaard, The Anabaptists and Hasidic Jews beat the Mormons and Niger & Mali, even though, like the Mormons, living in the midst of a developed low birth rate country.

  23. Gravatar of Floccina Floccina
    26. December 2018 at 07:37

    @Arilando, seems to me many very rich people also live in high immigrant in New York city and LA, partly for the diverse Cuisines that the immigrants provide.

  24. Gravatar of Benny Lava Benny Lava
    26. December 2018 at 19:04

    To a casual observer Houston style zoning wouldn’t really help. I mean where are the open tracts of land developers want to turn into housing but can’t? Seems like it is just infill – redeveloping already built up property. In Houston that isn’t the case. I mean just compare population density of LA. San Diego, or San Francisco to Houston. Plus the whole water problem. I just don’t see the evidence for massive growth in California. The land appears to be gone.

  25. Gravatar of Scott Sumner Scott Sumner
    26. December 2018 at 21:11

    Benny, There is plenty of land and water, the problem is zoning.

  26. Gravatar of Benny Lava Benny Lava
    27. December 2018 at 11:40

    You keep saying this but where is the evidence? California’s major cities are much more densely built than Texas’ and are hemmed in by the ocean on one side and the mountains on the other. Not sure where Texas style zoning comes to play in California. Can you send evidence?

  27. Gravatar of ssumner ssumner
    27. December 2018 at 21:52

    Benny, There are all sorts of studies that show the cost of zoning in CA. A 1/4 acre lot zoned for two houses is vastly more valuable than the exact same lot zoned for one house. And there is plenty of flat land to build one, which is being held back zoning and regulations.

  28. Gravatar of Brad Brad
    30. December 2018 at 05:28

    I think you’re oversimplifying the tax situation. One of the advantages that Texas has in terms of attracting people is really high property taxes – it’s broken down by county, but Houston in particular has one of the highest property tax rates in the entire country. This discourages people from putting too much focus on housing as a savings vehicle, and allows governments to do wild and crazy things like “have no zoning” – being confident that taxes will be high enough to pay for services, and that they won’t face a huge backlash of NIMBYs.

    California of course has taken the exact opposite approach – disastrously. California has no problem attracting rich people even with its high income taxes – people are lining up around the block to buy 3 million dollar homes in the Bay Area that go for 300k in Houston. But California has a lot of political incentives against housing construction, and the switch from Property taxes to income taxes also gave us more volatile income, and still a decline in services.

    Unfortunately the way this translates politically, is the right saying that California needs lower property taxes to attract people (which is wrong), and the left says that California needs higher property taxes to pay for services (which sounds crazy with the country’s already high income taxes). A property/income tax switch on the other hand would be very good, but isn’t being suggested anywhere.

  29. Gravatar of tyler tyler
    2. January 2019 at 18:09

    Birth rates vs death rates are the key factor for population growth.

    The natural population growth rate (births over deaths) is relatively high in Texas at 7.4 per 1,000. That’s the 4th highest of any state! At 0.74% growth, that’s higher than the national average even without any immigration at all.

    Now look at New Hampshire. The birth rate is only 0.1 per 1,000 above the death rate. The natural rate of change of New Hampshire’s population is essentially zero.


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