Friday, June 13th, 2008
A consulting colleague of mine always said he felt the most telling single metric about any business was its gross profit margin percentage. It tells you, he says, so much about a company. For a city, I think perhaps the most telling statistic might be net migration. Whether or not people are moving to your city or moving away from your city says so much about a place.
If you look at all the great cities in the world, you’ll notice they all went through some type of “gold rush” period, where speculators, hustlers, immigrants, entrepreneurs, and others eager to seek their fortunes poured in. Cities have always been the land of opportunity, where people could go to chase after their dreams. Almost every large, successful city has had large bursts of newcomers during boom times and maintain their attractiveness to outsiders over the long haul.
Migration statistics tell us whether or not a city is viewed as a place where outsiders are willing to say, “This is where I’ll make my fortune” or raise a family or chase another dream. But let’s face it, at some level most of us do care about the money. When greedy and unscrupulous carpetbaggers show up, when large numbers of immigrants start pouring the doors, when corporate highflyers are ready to set up shop, when indie rockers move to your town to start up their band, when entrepreneurs move their to start up their companies, etc., you’ll know you’re doing all right.
If you take a look at the Midwest, you’ll find that net migration figures correlate very closely to the conventional wisdom view of the health of the community. Minneapolis, Kansas City, Columbus, and Indianapolis all have material in-migration. The others are flat to declining. Clearly these four cities are generally considered among the best performing in many respects. The interesting outlier is Chicago. That city is typically viewed as highly successful, but is suffering from outmigration. It has very high international in-migration, but this is exceeded by domestic outmigration. Does this indicate that the Chicago region is not as healthy as it looks? Or is it merely a special case of demographic transition in the Midwest’s only true “global city”? Time will tell I suppose.