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November/ December 2013 Stay Put, Young Man

Americans used to be exceptional for how often they moved. But that once-powerful source of both efficiency and upward mobility is now in steep decline.

By Timothy Noah

In recent years, the bursting of the housing bubble, which has left millions of American homeowners owing more on their mortgages than their houses are worth, has surely been a factor in depressing the number of people moving. Yet it turns out that the phenomenon of “housing lock” has played surprisingly little role in driving down migration rates even during the worst years of the Great Recession. For example, rates of migration have fallen equally for homeowners and renters. And in the states with the worst housing markets, such as Nevada and Arizona, unemployed workers have been no more or less likely to move than in states with the best housing markets. Moreover, taking the longer view, rates of migration were falling year after year even when the housing boom was on and most home sellers could walk away from a settlement with a huge check.

What about the growth of the Internet? Fewer people have to move to connect with the job they want. And indeed, the percentage of workers who telecommute from home has nearly doubled since 1980. But that still comes to only 4.1 percent. (And anyway, telecommuting has mainly turned out to be a way for employees to work extra hours after they come home from the office.)

It would be heartening to discover that fewer Americans need to move these days because more are able to find great jobs right in their own communities. Yet there is abundant evidence that this is not the case. Most obviously, in recent years, unemployment has increased as migration has continued to decease. Moreover, along with everyone else, unemployed people are far less likely to move today than they used to be.

Nobody has a better reason to pick up and move than someone who can’t find a job—or at least so it would seem. But while unemployed people remain likelier to migrate than employed people, they are much less likely to migrate than in previous decades. In 1956, for example, 7.6 percent of unemployed males moved from one state to another during the previous year. Subsequently that rate fell to 7 percent (1966), 5.9 percent (1976), 5.3 percent (1986), 4.4 percent (1996), 4.3 percent (2006), and, finally, 2.7 percent (2012).

In the past, migration served to reduce inequality among states by matching workers more efficiently to the country’s best available jobs. The creation of a single automobile plant—Ford’s River Rouge complex, completed in 1928—boosted Michigan’s population by creating more than 100,000 well-paying jobs. (One of those migrants, the future United Auto Workers President Walter Reuther, made a beeline from West Virginia on hearing Ford was paying tool and die makers the equivalent, in 2013 dollars, of $16.50 an hour.) Today, the reverse appears to be happening. While migration goes down, the richest states are getting richer.

Connecticut, for example, had in 1980 a per capita income that was 21 percent above the national average. By 2011, that disparity rose to 39 percent above average. Over the same interval, New York State’s per capita income rose from 8 percent to 23 percent above average, while Massachusetts went from 6 percent to 29 percent above average.

Today, the state with the highest median household income is Maryland. If you want to do like Willie Sutton and go where the money is, migrate to Maryland, because median income there is about $70,000, or roughly 40 percent above the national median. Pack up the truck, we’re moving to Maryland! Except we aren’t. About 8,000 more people moved out of Maryland last year than moved in from other states. Indeed, Maryland experienced negative net domestic migration in every year of the past decade except two.

You don’t like the Free State? How about California? It’s got an annual GDP in excess of $1 trillion. That’s more than Saudi Arabia. Cradle of the tech revolution, California is home to more than eighty-five billionaires. But it’s been losing native-born residents for two decades.

So where have people been moving to, if not to where the money is? Generally to southern Sun Belt states, where average wages not only are lower than in the places they left behind but are also growing more slowly. So, for example, when people moved from Connecticut to Texas in 1980, they moved to a place where per capita income was 17 percent lower. By 2011, when people made the same migration from Connecticut to Texas, they wound up in a place where per capita income was 31 percent lower. And yet they kept coming.

Maybe you’re thinking that states with lower wages have a higher volume of jobs. Pay people less and you can hire more of them, right? But in fact, most Americans moving across state lines are relocating to places where they’re no more likely to find employment. As the Atlantic’s Jordan Weissman pointed out in December 2012, of the ten states with the highest rates of in-migration, more than half had unemployment rates equal to or higher than the national average.

A minor exception to this dismal trend is North Dakota. It has the country’s highest net in-migration rate right now, and the lowest unemployment rate. That’s because the state is experiencing an old-fashioned economic boom thanks to new oil-extraction technologies like fracking. But North Dakota has a total population of only about 700,000. A huge in-migration rate therefore translates into about 11,500 actual people, or about 0.005 percent of the national working-age population. That makes North Dakota’s oil-boom-driven migration—however significant for North Dakota itself—a minor economic event for the country as a whole.

The larger picture is one in which migration is not only declining but also tends to be away from places where, according to recent studies, young adults have the best chances of moving up the income scale.

So for example, in the Opportunity Index, presented here, New York State scores far better than Texas. Yet between 2010 and 2011, 26,155 people moved from New York to Texas, while only 9,151 people moved from Texas to New York. Similar results come from Harvard’s Equality of Opportunity Project, which ranks metropolitan areas according to the likelihood that young adults will rise from the bottom to the top of the income scale. Most of the metro areas at the top of this ranking are places experiencing negative net domestic migration, including Boston and San Francisco.

Why are Americans by and large moving away from economic opportunity rather than toward it? It all starts to make sense when you think about “push” rather than “pull.” One “push” factor heavily touted by conservatives is state income taxes. Raise the state income tax, conservative dogma holds, and taxpayers will make an exodus to lower-tax states. But a Reuters report in February cast doubt on this hypothesis, pointing out that the rich typically stay put when state income tax rates rise. As for working-class Americans, moving to a state with low income tax rates hardly makes sense if you have to take a bigger cut in wages. Moreover, states with low income tax rates generally have high sales taxes, which, because they are regressive, punish working-class people the most.

A far more plausible push factor is the cost of housing.

Timothy Noah is an MSNBC contributor, contributing editor for the Washington Monthly, and author of The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It.

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