Recession Alters Migration Patterns in U.S.
DECEMBER 24, 2009.
By MARK WHITEHOUSE
The recession has had a profound effect on migration patterns in the U.S., reversing the flow of people to former housing-boom states such as Florida and Nevada, the latest data from the Census Bureau show.
In the year ending July 1, 2009, Florida -- once the top draw for Americans in search of work and warmer climes -- lost more than 31,000 residents to other states, the Census Bureau reported Wednesday. Nevada lost nearly 4,000. The numbers are small compared with the states' populations, but they reflect a significant change in direction: In the year ending July 2006, Florida and Nevada attracted net inflows 141,448 and 41,640 people, respectively.
"The recession coupled with the mortgage meltdown stopped the dominant migration story of the last decade in its tracks," said William Frey, a demographer at the Brookings Institution, a Washington think tank. "The real question is when the Sunbelt states are going to be able to come back. These new numbers suggest no end in sight."
The census data provide the starkest illustration yet of a shift that began after the peak of the housing boom in 2006. Each year, the movement of people from states in the Northeast and Midwest such as New York, New Jersey and Michigan to job-producing states in the Sunbelt and West has lost momentum as house prices have fallen and jobs have disappeared.
The exception amid the Sunbelt states is Texas, which has managed to avoid much of the housing malaise and unemployment that have plagued other states. In the year ending July 2009, Texas gained 143,423 more residents from other states than it lost, making it the nation's biggest draw for the fourth year in a row.
With no income tax and relatively inexpensive housing, Texas has attracted both entrepreneurs and large corporations. The bank Comerica Inc. moved its headquarters from Detroit to Dallas in late 2007, and BlackBerry-maker Research in Motion opened its U.S. headquarters in Texas soon thereafter. Surging energy prices in early 2008 helped the state's oil industry, and the state's large medical centers have provided stable employment.
Between July 2005 and July 2009, Texas added 648,600 nonfarm jobs, according to seasonally adjusted data from the Bureau of Labor Statistics. As of November, the Lone Star state's unemployment rate stood at 8%, well below the national average of 10%.
The obstacles to moving have also helped stanch the hemorrhaging of population from California. It saw a net outflow of 98,798 to other states in the year ending July 2009, compared with 313,081 in the year ending July 2006.
As Americans' willingness or ability to move from one state to another wanes, other factors such as birth rates are having a bigger impact on states' relative populations -- a shift that has political implications. Minnesota's robust birth rate, for example, could prevent it from losing a representative when Congress reallocates seats next year, demographer Kenneth Johnson of the University of New Hampshire's Carsey Institute wrote in a report Wednesday. And Utah, which saw its population grow by more than 57,000 in the year ending July, thanks in large part to births, is likely to gain a congressional seat.
People's immobility could become an obstacle to the restructuring needed to sustain an economic recovery, as tighter credit and depressed prices make buying and selling homes a more daunting prospect. The flexibility of the labor market, underpinned by a relatively mobile population, has long been a crucial factor in the U.S. economy's resilience.
"A lot of people are stuck," said Steve Cochrane, an economist at Moody's Economy.com. "If someone loses a job and can't move to seek a job somewhere else, that can keep the unemployment rate high and also make it hard for employers to find the labor they want when they need it."
The housing bust is also preventing retirees in colder climes from moving south. That is taking a toll on the business of Mike De Croteau, a broker at De Croteau Realty in the Boston suburb of Melrose, Mass. Three years ago, Mr. De Croteau said, he and investors put more than $500,000 into building three homes in North Port and Port Charlotte, Fla., figuring they could find retirees in the Melrose area to buy them. Two of the homes are still empty, and Mr. De Croteau said that together they are now worth about $150,000.
"Before we made the investment, a lot of the baby boomers were expected to go down to the warmer areas," he said. "That just hasn't happened."
The recession also appears to have tarnished the U.S.'s image as a beacon of opportunity. In the year ended July 2009, the country attracted about 855,000 more new immigrants from abroad than it sent to other countries. That is 14% less than the nine-year annual average.
"Fewer people are coming into the U.S. because they know jobs are down," said Mr. Frey, of Brookings. "Migrants from abroad are also sensitive to the economic ups and downs in the U.S."
—Leslie Eaton contributed to this article.
Write to Mark Whitehouse at mark.whitehouse@wsj.com
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