Wednesday, November 28, 2012

Pittsburgh Migration

One year does not a trend make. We are still in the early months of a recovery from a cataclysmic recession. Surely some migration patterns have changed. The premature analysis:

Migration data for the most recent one-year period available, July 2010 to July 2011, show the Great Recession has shaken the rankings up quite a bit within the circle of fast-growth regions. The biggest winner has been Texas. The Lone Star state boasts four of the 10 metro areas with the largest net migration gains for the past two years.  Dallas ranks first, followed by Austin in third place, Houston in fifth and San Antonio in eighth. In contrast, some of the growth leaders over the 2000-09 period, notably Las Vegas, and to a lesser extent Phoenix, have tumbled considerably in the rankings. The lesson here: a strong economy has to be based on something more than gaming, tourism and home construction. Energy, technology, manufacturing and trade are far preferable as an economic base.

Also posting strong net migration gains for 2010-11 were Miami (second place), Washington, D.C. (sixth), and Seattle (ninth). In each of these areas, economic conditions appear to have improved. The once disastrous condo glut in the Miami area, which includes Dade, Broward and Palm Beach counties, has begun to clear up as foreign buyers pour into the region. Taxpayer-funded Washington is surging with new jobs and the highest incomes in the land. Seattle continues a long-term evolution toward the healthiest of the blue-state private economies. San Francisco, a consistent big loser for the last decade, jumped to 19th, presumably as a result of the current bubble.

Another huge turnaround can be seen in New Orleans, which ranked a dismal 43rd for 2000-09 as residents fled not only Katrina but a stagnant, low-wage, corruption-plagued economy. But in our 2010-11 ranking, the Crescent City surged to a respectable 16th, one of the biggest migration turnarounds in the country.

How about the biggest losers? From 2000-09, the metropolitan areas that suffered the biggest net domestic migration losses resemble something of an urbanist dream team: New York, which saw a net outflow of a whopping 1.9 million citizens, followed by the Los Angeles metro area (-1,337,522), Chicago, Detroit, and, despite recent improvements, San Francisco-Oakland. The raw numbers make it clear that California has lost its appeal for migrants from other parts of the U.S., and has become an exporter of people and talent (and income).

And despite the cheap money Bernanke-Geithner policies of the past few years that have benefited giant banks centered in the bluest big cities, people continue to leave these areas.  The 2010-11 numbers show the deck chairs on the migratory titanic have stayed remarkably similar, with New York still ranking first among the 51 biggest metro areas for net migration losses, followed by Chicago, Los Angeles, Detroit and Philadelphia. In most of these cases only immigration from abroad, and children of immigrants, have prevented a wholesale demographic decline.

Emphasis added. Cities, such as Austin, continue to chug along as talent magnets. Las Vegas and Phoenix head up the pack of new losers. Speaking of Phoenix, Pittsburgh is now sandwiched between that metro and Jacksonville, Florida at 21st place for net migration (+3,740). For "net flow", I don't see a Rust Belt city faring better. In fact, few other industrial legacy metros sport positive numbers. (Notably Columbus, Indianapolis, and Louisville) If you look at the chart for "2010-2011 Net Domestic Migration for the Nation's 51 Largest Regions", you can also assess rate per 1,000 residents. Pittsburgh's ranking barely changes (20th). Last place (51st) is Cleveland with -6.04. That's a tremendous amount of migration pressure within Cleveburgh.

To put the shift into a larger context, read Chris Briem's post (Null Space) about the latest workforce numbers:

Pittsburgh MSA labor force +26K year over year through October. Works out to +2.1% or more than double US labor force growth (+1%) over the same period. 

Also, check out the associated chart to better appreciate the slope of events. To my eye, the net migration estimate falls short of the mark. One shouldn't expect much (if any) in the way of natural increase in the workforce. Yes, some people who left the labor market are opting back in. I expect the net inmigration rate to pick up considerably for 2011-2012 when those numbers are available.

All of the above lend credibility to the rosy anecdotes about the turnaround in Pittsburgh. Typically, the metro is sluggish out of the recession. Today, it leads the way and is accelerating through the recovery. Emerging from each downturn is an unexpected boom town. I saw it happen in Seattle and Minneapolis in the early 1990s. I see the same thing taking hold of Pittsburgh.

Update: This just in from Pittsburgh Today:

1 comment:

Patrick Prescott said...

From Pittsburgh Today: "the total labor force figure of 1,264,640 is the highest labor force figure for the region ever."

That's pretty icredible.