INSIGHTS: WHERE ARE AMERICANS MOVING TO?
GUEST COLUMNIST: Hannah Moses, Senior Public Relations Specialist, North American Moving Services
Despite the 2020 pandemic, this year Americans are following similar moving trends as prior years. Millions of Americans are moving either to start a new job or to move home. Whether you’re looking to move or not, it can help to know where Americans are moving. The following historical U.S. migration study details the states with the most outbound and inbound cross country moves.
Key Takeaways from the 2020 Migration Report
People are fleeing California for Texas and Idaho. Illinois, New York, and New Jersey are the three states with the most outbound moves. The top five inbound states in 2020 are Idaho, Arizona, Tennessee, South Carolina, and North Carolina, with Tennessee overtaking South Carolina from the 2019 results. Florida, Texas, and Colorado round out the top eight states for inbound moves. Despite pandemic, people continued to move at rates comparable to 2019
Northeastern States Take Lead in Outbound Migration
Northeastern states make up four out of the seven states with the most outbound moves, and none of them make the top eight for inbound moves. New York led the way, followed by New Jersey and Maryland. But California edged out Maryland for fourth place on the outbound list. Pennsylvania and Michigan also made the list, and both states have made the top 10 fairly consistently for the past few years. Maryland has made the list for outbound moves since 2015, and it has ranked between second and fifth places. In 2020, it took fifth place.
People may be leaving the Northeast for a few reasons:
- Harsh winters, since temperatures and snow can be intense in the region.
- Job availability is another factor since many companies are avoiding the region: https://www.marketwatch.com/story/3-reasons-so-many-people-are-getting-the-hell-out-of-the-northeast-2018-10-20
- The Northeast is also home to many cities with a high cost of living, making housing affordability challenging, especially as people lose their jobs.
Southern States: Sunbelt Migration Trend Continues
States in the south consistently rank well in the list of inbound moves. On average, states throughout the southeast, south and southwest continue to see their populations grow as more individuals relocate there than leave the region.
Arizona and South Carolina have been in the top five inbound states since 2015. Meanwhile, North Carolina and Tennessee have always been on the list but reached the top five in 2016. While Tennessee usually sat in fifth place or so, it is now in third place for inbound moves.
Florida and Texas have also been in the top 12 since the first report in 2015. Each year, both states rose through the ranks. Now, Florida is in sixth place, and Texas is one point behind in seventh place.
While Georgia was in the top eight for the first few years, it has fallen out of the top eight since 2018. Still, the south continues to dominate the inbound list. Even as Americans move to different states, southern sunbelt states will probably stay on the list for many years.
Americans move to the south for several reasons, most of which are in sync with the trend of migration out of the Midwest and North East:
- States in the south have experienced job growth due to companies relocating to or opening branches in the area. While the pandemic has changed things, there are still plenty of jobs in the south.
- Southern states like Texas, Florida, and Tennessee don’t have a state income tax. Arizona and the Carolinas have a state income tax, but rates are relatively low, not surpassing seven percent. https://www.businessinsider.com/personal-finance/states-with-no-income-tax-map
- Of course, the warmer weather is a draw for many people. Some states may have hot summers, but the mild winter is worth it for some.
- For those seeking to avoid congested areas, the south offers a lot of open space and opportunity to live more rurally, but with access to common conveniences. This may have been particularly important in 2020 as individuals sought their own “space” and avoid congested cities.
Midwestern states: Second to North East in Outbound Migration
States in the Midwest tend to rank on the outbound list along with Northeastern states. Michigan has made the top 10 since the 2015 study. It has steadily climbed to the top five, taking fourth place in 2020.
Illinois has also been in the top 10 consistently over the past few years. However, it only comes in ninth place for outbound moves in the 2020 list. The state sits at around 30 to 35% of individuals migrating out of the state throughout the years.
While Minnesota has made the list of outbound states before, it didn’t rank in the top nine in 2020. No other Midwestern states had made either list since 2015 when Ohio came in second place for most outbound moves.
The Midwest can have harsh winters like the Northeast, but there are probably other reasons for the rankings:
- It can be hard to find jobs in Michigan, especially after the decline of the auto industry. https://www.detroitnews.com/story/business/autos/2020/03/31/automakers-give-inkling-sales-collapse-ahead/111511870/
- Public policy is one reason to blame for people leaving Illinois. Residents have moved to pursue a higher quality of living in other states. https://www.illinoispolicy.org/reports/still-leaving-illinois-an-exodus-of-people-and-money
Western states Still a Draw for Inbound Moves With Some Exceptions
In general, people are consistently moving to Western states. Idaho has made the top 10 each year since 2015. Colorado has been in the top 10 or close to it for each of those years. Most years, Idaho has come out on top for the most inbound moves, and 2020 is no exception. The state has consistently reached about 65 percentage points for inbound moves.
Colorado has slowly risen in the list over time, and it recently hit eighth place, a few points behind Texas. The state has averaged about 55 percentage points, even as other states have changed ranks.
Nevada, Oregon, and Washington have made the top inbound list in years past, but they didn’t make the cut for 2020.
Of all Western states, only California has consistently ranked in the top 10 for outbound moves since 2015. The percentage has fluctuated over time, but enough people continue to leave to make it stand out. California’s high cost of living could be the reason for so many outbound moves, along with a lack of affordable housing in some cities (San Francisco, for example, has an approximate 30+% of outbound versus inbound movers).
Here are a few reasons for the moving patterns in the west:
- Idaho is one of the fastest-growing states in the US, and it’s relatively affordable. https://www.eastidahonews.com/2020/09/why-people-are-moving-to-idaho-falls-like-never-before/
- A slower pace in Idaho has also made it an attractive place for many people to live.
Top Moving to and From MSA (Metropolitan Statistical Area) Areas
Not surprisingly Phoenix ranks in the number one position for top inbound destination. Phoenix has held on to the number one spot for four out of the last five years. It was only in 2018 that Houston nudged past Phoenix.
With Texas’ warm climate and low taxes it’s not surprising that two of the top five MSA destinations are in Texas.
For this report, we reviewed data for household moves in and out of the states. We focused on states with a high proportion of inbound or outbound moves, and we set an absolute value of 400 or greater. By setting that value, we took out smaller states that may have had fewer moves but a larger proportion, skewing the data.
ON THE ECONOMY: THE STORY IN YOUR EYES
John Dunham, Managing Partner, John Dunham & Associates
Oh, I’ve been thinking ’bout our fortune, and I’ve decided that we’re really not to blame. For the love that’s deep inside us now is still the same. And the sounds we make together, is the music to the story in your eyes. It’s been shining down upon me now, I realize. Listen to the tide slowly turning, wash all our heartaches away. We’re part of the fire that is burning, and from the ashes we can build another day. So begins the 1971 single by the Moody Blues. Written by the band’s guitarist Justin Hayward, the song reached number 23 on the Billboard Hot 100.
Economics is really an exercise in storytelling., Throughout the history of the development of economic thought, the masters in the field told stories about the foibles of government policy. This is one reason why economics is still such an important part of the decision-making process.
The beginnings of economic story-telling go back at least as far as Aristotle, but are more likely even older. The Sumerians kept detailed business records, so it is likely that somebody hanging around Uruk was analyzing these data to better understand markets along the Euphrates River. Those who study economic history tend to put the study’s origins in Renaissance Europe, with the development of Mercantilism. This was both a political movement and an economic theory that advocated the use of the state’s military power to ensure that local markets and supply sources were protected, spawning protectionism and imperialism. The famous economist, Adam Smith, wrote his 1776 treatise, The Wealth of Nations as an argument against Mercantile theories.
Economic theories developed over the years to address specific market conditions and historical events, everything from the growth of monopoly trusts, to the Great Depression, to the reconstruction period following World War II. All of these theories added to the vocabulary and texture of future economic story telling. Today, when bringing economic arguments to bear in political discourse, the focus seems to be on five different themes: Market failure, supply and demand, trade, equality and consumption.
Economists generally believe that markets are the best means to distribute goods and services across an economy. However, there are cases where markets do not work properly, and others where government authorities believe that they know better than producers and consumers. This is where the idea of government regulation comes to bear. Nearly every regulation promulgated by a government authority is justified in terms of correcting some form of market failure, whether that be an externality, a lack of information, or a power relationship between buyer and seller.
Economics arguments are used to show both the existence or lack of market failure in a specific circumstance and to show the economic impacts of regulations used to correct perceived failures. For example, many things considered by government to be externalities are internal to the individual. Health and safety regulations are often based on this misconception. Often the solution for a perceived market failure does not correct that specific problem and creates other unintended consequences.
By bringing these issues to light, a simplistic argument in favor (or against) a regulation can be shown to have effects that may lead to a different solution than was originally being considered.
Supply and Demand
The x-shaped model of supply and demand curves is one of the oldest stories in economics and is easily translatable to political operatives, the media, and other stakeholders. Nearly everyone seems to understand that as prices rise, volumes of a good or service offered increase, and when prices fall, the opposite occurs. Many discriminatory taxes are based on this simple story. Governments raise prices through taxation in an effort to discourage certain behaviors while providing subsidies to encourage other types of behaviors.
It is funny; however, that decision makers often do not understand the inverse of the equation. By forcing up demand for a good or service, government actions will increase prices and often create shortages, likewise by limiting demand they will lower prices or create surpluses. Take rent control regulations as an example. Governments seeing a need to provide for housing for lower income families impose restrictions on how much can be charged in rent. This does just the opposite of what was intended, and pushes down supply, while increasing demand.
Economic stories are used to bring these truths to light. In the case of rent controls, for example, economic arguments can show how the proposed solution leads to less available housing, or how other regulations, such as changes in zoning codes, might be a more productive way to provide for affordable housing.
Trade happens not just between countries but between cities and regions. Often, advocates like to suggest that purchasing goods from local producers has an economic benefit. This is the old mercantile argument at work, an idea that was laid bare by Adam Smith. In reality, trade is almost always a good thing since it allows producers to specialize. A firm in Florida has a better chance of growing oranges at a reasonable cost than one located in New York, simply due to the weather. The opposite is true for apples. So consumers in both New York and Florida benefit by trading apples and oranges. Trying to shop for locally produced oranges in New York would lead to very expensive citrus indeed.
Economic stories are used to show the negative effects of this fallacy on the economy, and how buy local regulations might actually reduce jobs in a community.
The buzz words in many political discussions today include terms like equality, sustainability and diversity. The idea of equality has long been part of the dialog of economics, and the concept of economic justice is not new. Economists have looked into the causes and natures of poverty and economic inequality, and have fashioned a number of ideas about how they occur. A free market should reduce poverty since competition will always force income to what used to be called its natural rate. Marx examined poverty as part of his concept of class struggle, and this has seeped into political discourse lately. However, a solid understanding of Marx’s models and stories shows that markets rather than intervention would help to alleviate poverty under a capitalistic economic framework.
All that said, economic stories can help to clarify how utopian ideas about income inequality are not really based on fact, not even on the theories that they often cite; and why a pie that does not grow cannot be shared by more and more people.
Whenever economies weaken, government is called upon to stimulate consumption. This is generally done by allowing the public sector to borrow or print money, which is then given to specific businesses and individuals. The idea of government stimulating the economy this way comes from a depression era economist named John Keynes. Since giving people stuff seems to make people happier than taking stuff away from them, governments have gone on a stimulus spree that has now lasted almost 100 years. The result, of course, is inflation and a huge increase in long-term debt.
The nature of money and of borrowing is complex, and most people cannot reason out why printing more money does not create more wealth. It takes a good economic story to bring the complex relationships surrounding debt, money, inflation, and wealth down to a level that can be understood by the media, by decision makers or by the general public.
In this new COVID-influenced world, governments have become the most important economic players, and the decisions that they make will have significant effects on how we are able to live both now and in the future. Decision makers need to be thinking ’bout our fortune, because it is from the ashes that we will have to build another day.