Monday, June 04, 2012

Migration Inflection Point

Despite persistent high unemployment, some Sun Belt boomtowns continue to attract migrants. Charlotte is a good example. Mesofacts and momentum keep the dream alive long after economic opportunity has evaporated. Grounded in reality or not, status quo migration patterns are a good bet to continue. Michael Barone with the exceptions to the rule:

Continued domestic out-migration from high-tax states? Certainly from California, where Gov. Jerry Brown wants to raise taxes even higher. With foreign immigration down, California is likely to grow more slowly than the nation, for the first time in history, and could even start losing population.

Fortunately, governors of some other high-tax states are itching to cut taxes. The shale oil and natural gas boom has job-seekers streaming to hitherto unlikely spots like North Dakota and northeast Ohio. Great Plains cities like Omaha and Des Moines are looking pretty healthy, too.

It's not clear whether Atlanta and its smaller kin -- Charlotte, Raleigh, Nashville, Jacksonville -- will resume their robust growth. They've suffered high unemployment lately.

But Texas has been doing very well. If you draw a triangle whose points are Houston, Dallas and San Antonio, enclosing Austin, you've just drawn a map of the economic and jobs engine of North America.

Texas prospers not just because of oil and gas, but thanks to a diversified and sophisticated economy. It has attracted large numbers of both immigrants and domestic migrants for a quarter century. One in 12 Americans lives there.

Barone thinks we are at a "demographic inflection point". He sees immigration and the move from high-tax states to low-tax states as the two major forces that have shaped the last economic epoch (~40 years). What's next?

Barone's theory about tax-driven migration creates, in my estimation, a blind spot. His model cannot account for Pittsburgh's boom. Nor can he make sense of spiraling real estate prices in super expensive Park Slope. Why are so many people moving to high-tax locales? In terms of migration, I think we are having a Berlin Wall moment. The world we thought we knew so well has dramatically changed. We need to be searching for new paradigms.


Matthew Hall said...

Economic activity really happens at the metro level. Looking at individual metros helps to explain a lot of the changes since 2008. American metros are becoming more distinctive from each other, instead of more alike.

The Urbanophile said...

Vis-a-vis Manhattan, migration to Park Slope is a form of low-cost migration. Also, the very wealthy have tended to either cluster in enclaves or to withdraw to country estates. I don't think Park Slope is a counter-factual. In any case, outliers in social science do not necessarily discredit the broader trend I think.

BTW: Population growth in Charlotte plunged significantly in the recent past. We'll see what happens there.

Jim Russell said...

In any case, outliers in social science do not necessarily discredit the broader trend I think.

I agree. But the migration to more expensive, higher tax cities is a broader trend. So is the seeking of cheaper housing. As is the allure of better schools. The tax model of migration has lousy explanatory power.

Re. Charlotte, big migration gains there from July 2010 - July 2011.