Friday, August 26, 2011

New Patterns Of Migration

There is still a fair amount of wishful thinking going on in the Sun Belt. The good times may eventually return (they always do). Missing is consideration of the seismic impact of the financial crisis. A lot has changed, particularly migration:

The figures come from the Internal Revenue Service, which compares where households file their tax returns from one year to the next. UNO's Center for Public Affairs Research has been analyzing the annual data since 1989.

Nebraska had lost a net of residents to the Sun Belt states of Arizona, Florida and Georgia in all 20 years of previous data — and in all likelihood that trend had been ongoing for many years before that. Nebraska had lost residents to Nevada in 19 of those 20 years.

But that was reversed in 2009, with Nebraska gaining 213 residents from Arizona, 305 from Florida, 138 from Georgia and 95 from Nevada.

The stubbornness of the economic doldrums is cause for panic in Arizona, Florida, Georgia, and Nevada. The changing flow is sustained, new pathways set in concrete. Mesofacts will favor Omaha over Las Vegas.

The world is enduring a difficult economic transition. Some places, such as Las Vegas, are stuck in an eddy of vestigial development:

During the boom years, this wasn’t such a problem, as these workers could find jobs in construction or the service industries. Indeed, Hispanics had the lowest unemployment rate in the United States before the recession.

All that’s finished. And, if you want to know why the Great Recession won’t truly end here in Southern Nevada for many years, this is it: The construction economy is dead and will be for years, the resorts have learned to do more with less, and we’re stuck with hundreds of thousands of workers who have few skills and no education.

They’re the equivalent of workers in Akron or Cleveland after steel went south and then overseas.

This is why we went from Boom Town to Neo-Rust Belt in just a few years. Consider the difference in earnings between those with education and those without: In 2009, for adults 25 to 34, the median worker with a bachelor’s degree made $45,000, or more than twice the median of someone without a high school degree.

The Rust Belt parallel is apt. Decline is slow, taking decades. There will be enough of a shrinking pie to maintain the status quo. The migrants won't come back for a generation or two. The jobs are in Nebraska.

Things are different now. The Flight of the Creative Class used to make sense. That world is inside out and upside down. From the current issue of the Economist:

LISA RAKOCZY arrived in north London in the mid-2000s from Krakow to study English, hoping to support herself by working as a cleaner. All went well—until the crash and ensuing economic crisis hit her previously prosperous clients. Competition for jobs became fiercer as middle-class families started to spend less on household help. For a while, she eked out enough to pay for her language course by cleaning lavatories in railway stations. Later, her sister, a teacher in Poland, helped her to make ends meet. But by the end of last year, Ms Rakoczy had tired of the trials of an immigrant’s life and headed home.

A typical case, you might think. Indeed, in the wake of the crash, many immigrants have gone back. Just as predictably, many would-be emigrants have stayed at home, either because moving abroad no longer seems worth the effort or because immigration rules in many countries have become more restrictive.

Yet at the airport, Ms Rakoczy may have crossed a young Briton bound for Shanghai, a Chinese computer programmer moving to Canada or a Portuguese worker on his way to oil-rich Norway. The recession has not stopped all migration, but rather led to new patterns and different destinations. Never before—or at least not in recent history—has the map of global migration been at the same time so varied and so changeable.

This is the new normal. Holding up the last US Census misses the point. That was the economy of the previous epoch. Get ready to ride the next Kondratieff wave. There are a bunch of great beaches along the Missouri River.

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