U.S. News and World Report pundit Michael Barone has a blog entry on migration between cities and counties where he writes: “… so much for Richard Florida’s theory that “creative cities” are growth magnets. …net internal migration is out of rather than into such creative cities as Manhattan,
San Francisco, Seattle, and Denver.” Read the whole thing here.
He uses Census data on net internal migration, the change in population excluding natural increase or international migration, to identify winning and losing places. His five biggest winners: Riverside, California (gaining 292,038 residents), Maricopa/Phoenix, Arizona (259,869), Clark/Las Vegas, Nevada (219,112), San Bernardino, California (120,496), and Collins/Plano, Texas (110,837). He adds: “Note that most of these counties are exurban in character, at the edge of large metropolitan areas. …The internal migration flow out from the central-city counties to exurban counties is immense. Politically, 21 of these 24 counties voted for George W. Bush in 2004. ”
His biggest five losers: Los Angeles (loss of 562,351 residents), Cook County/Chicago, Illinois (500,099), Kings County/Brookyn, New York (291,748), Queens County, New York (283,573), and Dallas, Texas (207,389). San Francisco, Boston, Seattle, Denver, Washington DC, Fairfax County, VA, and many other places make this list. “You won’t be surprised to learn,” he writes, “that most are big central-city counties; the five counties that make up New York City had a net internal outmigration of
808,562.” Politically, he adds, “31 of these 33 counties (and county equivalents) voted
for John Kerry in 2004….”
Not so fast. What Barone fails to consider is that these overall trends mask a deeper demographic shift…
…As Harvard economist Edward Glaeser has shown, the human capital levels of U.S. regions are diverging, and highly-educated, highly-skilled people are becoming more concentrated. New York City attracted more than 250,000 college graduates between 2000-2005, according to a recent New York Times report. Another indicator of this trend is the rise of what Wharton real estate expert Joseph Gyourko has dubbed “super-star” cities, places like San Francisco, Los Angeles, San Diego, Seattle, Boston, Austin, Raleigh-Durham, and Nassau-Suffolk, NY, which have had 40-plus years of housing appreciation that far outdistances the national average. Even though Brooklyn and Queens have lost total population, the New York Times recently reported that housing values have gone up another 25 percent in 2006, at a time when most economists say the U.S. housing market is cooling and the overall bubble has burst.
To provide a first cut at this, I asked my colleague Steven Pedigo of the Greater Washington Initiative to put together the numbers on key factors like human capital, income, creative occupations, and housing prices.
Let’s take income first. The top five counties in terms of per capita income are: New York; Marin County, California; Arlington, Virginia; Alexandria, Virgina; and Westchester, New York. Fourteen of the top 15 counties are in the NYC, DC, and San Francisco metros.
How about the classic measure of economic growth, highly educated people (those who hold a bachelor’s degree and above)? Arlington, Virgina; Marin, California; Alexandria, Virginia; Fairfax County, Virgina; and Howard County, Maryland, top the list. Boulder, New York, and Denver each make the top 15.
There’s also my own creative class measure: the percent of workforce in science, technology, culture and entertainment, management, health-care and finance. This group earns, on average, 3 times as much as service or manufacturing workers, and accounts for half of all U.S. wages even as only one-third of the workforce. On this score the leading metros are: Boulder, Ann Arbor, Washington DC, Charlottesville, San Jose, and the North Carolina Research Triangle area.
On virtually all of these measures, Barone’s net internal migration winners fall far behind.
But why? Well, consider what Pedigo wrote to me about the places that top Barone’s list. “What his list tells me about is the mass net immigration of unskilled, low-income residents. Take the Phoenix and Las Vegas areas for example. Phoenix ranks near the bottom in terms of educational attainment, 35th of the 50 largest metro-regions. Phoenix has a median household income of $48,124 and and a per capita income of $24,866, 33rd out of the 50. Las Vegas is 49th, with 18.9 perecent of its people having a BA or higher, nearly 10 points below the national average.” Not coincidentally, housing values in both places, which appreciated over the boom phase of the cycle, are now in free-fall.
What accounts for this seeming contradiction in numbers, where population growth – in this case net internal migration – is no longer associated with income, housing price, talent, or overall economic development? As I’ve argued elsewhere, the age-old connection between population growth and economic growth no longer holds. This fact continues to confound a lot of smart people, like Barone. The resulting demographic shift is what I call the “means migration” – the mass relocation of highly skilled, highly educated, and high-income Americans to a relatively small number of metropolitan regions, and a corresponding exodus of the traditional middle-class from these same places. Let me be clear: I’m not saying that this is a good thing or a bad thing. It just is; yet it still seems to be leading a lot of smart commentators down dead-end alleys of economic growth theory.
The political trends Barone mentions are of course tied to this shift. As traditional middle class families are pushed from dynamic urban centers — which are increasingly home to wealthier, more highly educated, more cosmopolitan people, as well as more single, gay and immigrant households — to far-off suburbs, ex-urbs, or less-expensive regions like Las Vegas and Phoenix, it’s not surprising that they take on more conservative positions with regard to immigration or gay rights. Underlying the oft-observed political polarization in our country is this very basic economic and demographic reality.
Pedigo’s full tables are here.
Your thoughts?
January 19th, 2007 at 3:28 pm
I would think that the biggest driver behind Barone’s observations is the aging baby boomer demographic.
The oldest boomers are around 60 years old. This is a great age to take early retirement; cash in your $3 million in equity sitting in your New York or San Francisco home and move someplace sunny with better golf and cheaper housing — like Las Vegas or Phoenix or suburban Dallas.
There are probably more aging baby boomers than younger, creative class types in America. Therefore these stats are not surprising.
I should add that the economy really needs retired people to vacate the superstar cities. The housing is needed for the incoming creative, knowledge workers.
January 19th, 2007 at 4:48 pm
Here is what I know, I’m 53 years old, married, no children. I’m retired, working part-time. My husband is 48 and will retire in 3 years. We live in a suburb of Washington, D.C. We are in tech jobs. Our plan is to sell our suburban home and buy a condo in Baltimore. Until recently the condo market has been on fire with prices sky rocketing. They seem to be leveling off, but perhaps have a bit further to fall. We and our boomer friends are planning to move into cities and condos once we fully retire. This will allow us to age in place with onsite services which make life so much easier. We are done with yards and home maintenance. Condos allow us to shut the door and vacation for long periods of time without worry about our single family homes sitting empty. If there seems to be a trend towards migration out of cities perhaps there are 2 reasons 1)younger people cannot afford the high real estate costs of the last 2-5 years in cities and 2)the boomers are just beginning their migration into the cities as they move into retirement. So the migration by boomers into the cities has not fully heated up,but we will get there. We have suburban homes we can sell in order to purchase the higher priced city real estate. Now it could be possible that NYC is not the place to which boomers want to retire, but smaller cities like Baltimore might be.
January 19th, 2007 at 10:38 pm
Interesting comment, Merideth. I agree that a significant number of baby boomers will downsize their homes as they retire. And, like you, many will select satellite cities and smaller cities — and pick dense urban areas with lots of amenities and cool things to do.
But I also think a sigificant number will still want a large home in a nice suburb, preferably some place sunny. Because they’ll only work part time or not at all, commuting distance isn’t a big concern. Las Vegas is the fastest growing city in the USA. And if you’ve been there lately, you’d notice how many people over age 55 now live there.
January 23rd, 2007 at 11:44 am
My parents are at the older end of the baby boomer generation and recently vacated their suburban single-family home in favor of a smaller, but more convenient townhouse. However, they chose to stay put in the RTP region in NC because of the social networks and support systems they have built over many years of living and working in the area. While they do fit into the “traditional middle class” sector, they recognize the development and cultural changes taking place in their community and want to remain a part of this evolving landscape. Thus, at least in this case, it seems that the trend of traditional middle class families being pushed to the ex-urbs can be seen from an ideological perspective: Conservatives, fearing the transformation of their traditional urban culture, flock to the ex-urbs in order to preserve their cultural identity and way of life; Open-minded people, confronted with new value systems and an increased diversity of people and ideas, embrace these changes as progress.