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Thursday, January 7th, 2010

Migration Matters

Wendell Cox provoked a bit of a predictable tempest with his recent piece on migration, “The Decade of the South“. I suspect Cox relishes his role as provocateur-in-chief. So I’ll let him provoke me into summarizing some of the thoughts I’ve had on migration.

There’s a school of thought at that net domestic migration is the primary statistic of urban health. I believe I’ve even said something of the sort myself. In this logic, people are “voting with their feet” about which cities and states are implementing the best policies.

Of course, this creates a challenge for urbanists because the migration data is all away from major dense urban cores towards the South and various Sprawlville, USA’s. Hence when these numbers are thrown in their faces, they dismiss or discount them.

But people who don’t believe this tells the whole story are quick to understand the power of migration logic in other situations. Cities that are attractive to international immigrants are feted, as are those that hoovering up the “creative class”. Becoming a preferred migration destination for “talent” is a standard paradigm in urbanist development circles. And of course the slowing of migration to the Sun Belt and a nascent back to the city movement have been heralded by some as the end or reversal of previous trends.

So I think at some level, we all realize that migration matters. The question is, what is it telling us? I won’t pretend to have all the answers, but wanted to share a few thoughts around various aspects of this.

Vote With Your Feet

This seems to be the dominant paradigm, and there is clearly something to it. In this view, people decide to relocate based on various factors like taxes and regulation, cost of living, amenities, type of environment, economic opportunity, and more.

If you look at the Midwest, the cities that are doing well on most measures – Columbus, Indianapolis, Kansas City, and Minneapolis – also have net in-migration or are nearly neutral, while places like Detroit and Cleveland are losing people. Chicago is an interesting counter-example of a place that is conventionally viewed to be successful but has net out-migration. I’ll return to that in a bit.

We also see that talent hubs like Seattle, Austin, Portland, and Raleigh are seeing people move in. They are certainly out performing many other less sexy locales.

And Austin of course is in Texas, where huge numbers of people have moved. As much as we urbanists might not like it, the Texas story is real. The state has generated enormous numbers of new jobs, a total unmatched by other states. The same is true of many other southern places.

So clearly there is something to this notion of voting with your feet.

The Limits of Net Migration

But when we look behind the numbers, we start to see interesting patterns emerge. First off, migration isn’t uniform within states. Cox notes that Ohio had huge out-migration and categorized it as an “economic basket case”, yet Columbus has in-migration. Indiana is losing people, but Indianapolis is not. Nor are suburban areas near Louisville and Cincinnati. Given that different regions within the same states, state level policies like tax rates and right to work laws can’t be the only answer.

So although “vote with your feet” has validity, perhaps there are other dynamics at work.

Greenfields vs. Brownfields

The South is frequently touted as a place whose favorable tax and labor climate is attracting business. But that is far from uniform. Places like Atlanta exploded into major business centers, other cities did not. In Tennessee, Nashville is thriving while Memphis is not. The south even has outright Rust Belt cities like Birmingham. Why are there so many struggling places in this nominally favorable environment?

Jim Russell suggests another key driver of the move to the south is the enormous advantages of greenfield development:

Bankrupt Birmingham is located in Alabama, a right-to-work state. Tennessee also has this distinction and is home to recovering industrial-dependent Chattanooga. Both the South and the North experienced an implosion of the manufacturing sector. Supposedly better state policies in the Sun Belt didn’t save any of those places from this fate. Why would it work magic in Pennsylvania for Erie?

In the face of globalization, states seem increasingly impotent. I suspect that most people, including the politicians, don’t understand the forces at work. I see a number of parallels with the brain drain issue. There is a poor accounting of the current situation. Ideological thinking dominates political discourse and policy suffers as a result.

During the 1980s, deregulation was the economic dogma of choice. The states with the least rules and lowest taxes should win. That’s not how it played out. If your city was saddled with high legacy costs, then state policy didn’t matter. Just so happens that the Rust Belt had (still has) a lot more of those cities than the Sun Belt did.

You can find the same economic geography within regions concerning the urban core and suburban periphery. Essentially, Americans have moved from brownfields to greenfields. When the unit of analysis is state, that trend gets lost in the data noise.

This is not to absolve bad decision making. High legacy costs in part derive from bad policy choices. But there is an independent logic to greenfield development. Because the world constantly changes but things like your physical location don’t, and your built environment and institutions are difficult to change, this means any city will eventually find itself facing the call of reinvention. Things like infrastructure and buildings constructed to outdated standards, institutional cruft, and deferred liabilities are almost inevitable, no matter how well run your city or state.

For more on this topic, I’d suggest reading my “What’s Killing California?” or Ryan Avent’s “Disruptive Technologies“.

Network Migration

There’s also the fact that migration, particularly international migration, involves networks. Why do people move? What factors into their decisions? A lot of times, factors other than purely economic considerations come into play, such as a personal connection to a place, proximity to family, or proximity of ethnic kinfolk.

One Louisvillian told me that “Our most important export is our women.” By that, he meant that college educated women who moved away from Louisville often returned with husband and family in tow when they had children. In effect, a significant source of new blood in Louisville is people who marry Louisville women and move back to be close to family. This illustrates both “boomerang migration” (return to a place you left) and family networks.

It also shows importantly that where you live is also a function of where you are in your life. I don’t think it’s entirely reasonable to expect or desire people to live in the same place from cradle to grave. What makes sense for a young single might not make sense for a family with kids or for a retired couple.

International migration works on family and ethnic networks as well and is often startlingly specific. For example, many Mexican towns have developed almost sibling relationships with US cities because migrants from that town clustered in a particular place. One example is the centralization of immigrants from the town of Tala, Mexico in Indianapolis. This was the subject of a Nuvo cover story “Bienvendios a Talapolis“:

[Tala] Mayor Cipriano Aguayo, one of the immigrant pioneers to Indianapolis in the 1970s, returned to Mexico when he was able to save enough money to support his family. Aguayo still has two brothers in Indianapolis. According to residents of Tala, including the mayor, nearly every home in the small town has a family member in the United States and the great majority of those are in Indianapolis. The money they send back is extremely important for Tala’s economic sustainability.

“More money circulates in this region due to remittances than anything else,” Aguayo says, “so we depend a good deal on the cash that comes from Indianapolis.”

Some of it supports civic projects, an increasingly common trend in Mexico. Lucila Madrigal, a Tala municipal official whose sons live in Indianapolis, reports that emigrant savings helped finance a bridge, renovate the cemetery and pave streets in the county. Local families depend even more on money sent home by their “absent sons.”

While Tala’s immigrants to Indianapolis maintain strong familial, cultural and financial ties to Mexico, they have also helped build the sort of cultural foundations here in Indianapolis that both facilitate assimilation and maintain the ties that bind this transnational community together.

“We Mexicans aren’t used to being without some family nearby,” says Fabian Alonso, who divides his time between Tala and Indianapolis. “So we all try to get someone from here to move up there and that’s how we created our neighborhoods that replicate those in Tala.”

Maybe economic opportunity brought original pioneers to Indianapolis, but much of the rest of the migration was driven as much by network effects as economic logic. Otherwise why not just stay in Texas rather than keep going north? And from what I’ve read, many of Indy’s original international immigrants arrived more or less by accident or mistake. The roots of the Tala diaspora lay in the 1970′s, when Indianapolis was a backwater town trying to shed it’s “India-no-place” label.

There are plenty of other examples around. Fort Wayne has 3,000 Burmese, not because it is an economic hotbed, but because of an active local policy to bring in refugees.

The large, traditional American port of entry cities have both the most and easiest physical connections to other countries, as well as long established and robust migration networks. So it is no surprise they remain dominant in international immigration. This may not say much about whether that is “logically” the places immigrants should go.

Retirement

Another source of migration is people retiring and moving someplace to enjoy it. As this often involves leaving places with lousy climates for more sunny locales, it is a built in source out migration from the Frost Belt. These people may be leaving for reasons that have nothing to do with the amenities, tax structures, or regulatory schemes that are favorable to business and labor. Rather, they want places that are good to enjoy their life and don’t place a financial burden on their particular financial profile.

Huge numbers of people moved to Phoenix, but does that mean Phoenix is a great business center, or just a great place to golf?

Network effects are also in play here. A retired couple I know from Pittsburgh just moved to North Carolina to be closer to their children who left years ago. This might have said something about what Pittsburgh’s economy used to look like, but it doesn’t have much bearing on what it is today. Economics might explain the children, but doesn’t explain the parents. Places that previously experienced an out-migration wave driven by a bad economy or policy might, for this reason, suffer a hangover for many years even if the local economy hits an inflection point.

Again, this is a result of stage of life, not per se local policy. Many people may choose to retire in place, but the reality is, many others won’t.

Moving Out, Or Not Moving In?

There’s also the question as to whether or not net out migration is more a reflection of people leaving or not coming. People are constantly migrating away from everywhere. The question is, are they being replenished? A place could have a below normal out migration rate, but if no one is moving there, it still shows net out migration.

This could particularly be the case in places that are near an inflection point. Bad conditions have stopped driving people out, but nothing has changed to create an inbound dynamic. Perhaps because there have been so few people moving in, there are few established inbound migration networks. Also, the reputation of the place (or lack thereof) may cause many to not even put it on the list. Portland gets touted as a great place in the media every day, so people who might be interested in what it has to offer will naturally have that city come to mind. That’s less likely to happen for Pittsburgh.

Jim Russell again argues that we should look mostly at in-migration, not net migration as the figure. I’m not sure to what extent I totally agree with this, but there seems to be something to it, particularly for cities at an inflection point.

New York City

Then there’s the case of America’s largest tier one cities, and especially New York. These cities have very high net domestic out-migration. Cox notes that the majority of New York state’s 1.65 million out migrants left from New York City.

But it isn’t hard to see that a place like New York is a structural exporter of people. First, it is a huge magnet for international immigrants. After a time in NYC, if some of them move on then, bang, they are domestic out migrants. On the domestic ledger that’s 0 in, 1 out, a clear net loss, but not the whole story.

Also, it’s noted that NYC takes in lots of young people, but many leave when they get marrie and have kids. Again, let’s play this scenario out. Two young singles move to NYC, marry, have two kids. When those kids reach school age, they move to the suburbs or back to the wife’s hometown in Kansas City. That’s 2 in, 4 out, a net loss of 2 people.

Is this a bad thing? I won’t suggest that we shouldn’t try to improve our urban schools or make our central cities more family friendly. Of course we should. But it strikes me that places like NYC are never going to be the destination of choice for families with school age children. Even if it captured more market share, it seems that it will always be exporting families.

Again, is it reasonable to expect that every place will be equally as attractive to people at all stages of their life? I don’t think so. Some places are better for young singles, some for families, others for retirees. So anyplace that is attractive to young singles is likely to be a structural source of out migration.

If you think again about New York, it takes in immigrants – raw recruits if you will – and spits out Americans. It takes in young singles – more raw recruits – and spits out up skilled people with families. There is huge value added in this. In a sense, New York City is a gigantic refinery for human capital. It’s a smelter for people. Perhaps we shouldn’t be any more sad about New York exporting people than we are about it exporting financial services. Taking in people, adding value, then exporting them is one of New York’s core competencies. Maybe we should be thanking it for providing this valuable service.

Whatever the case, any place that is a magnet for immigrants and young people, as most tier one cities are, are likely to be structural sources of out migration no matter what they do.

Jim Russell on Migration

It’s no secret I’m a fan of Jim’s thinking on talent and migration matters. His blog Burgh Diaspora is required reading, IMO. As I hoped he might, he chimed in with a comment here, which I’m including below so everyone will see it:

Interesting to see all the aspects of migration packed into one post. Still, some additional data categories should be considered. It’s not so much that migration matters, but demography matters. We tend to play fast and loose with net migration and population numbers. Declining population has become synonymous with net out-migration. That’s a gross distortion.

Each shrinking city has a unique demographic profile. Break it all down by age cohorts and the analysis gets very complicated. In my opinion, it also gets more useful. What’s the urban dependency ratio? A huge issue in cities with substantial legacy costs.

Concerning natural replacement rates, there is a striking variance among Rust Belt cities. Lower rates make the net out-migration problem more acute.

Overall, I think the net migration numbers tend to limit our thinking about how to make better cities. The population shift from Rust Belt to Sun Belt is dramatic, but the dominant narrative that folks such as Cox peddle won’t inform better policy. This is especially true if we insist on using state level data.

A good example is Texas, a big “vote with your feet” winner. A lot of good that’s done El Paso and other lesser-tier cities in the state. Houston, Dallas and Austin will Hoover up graduates from those places as well as the Rust Belt. They also suck up talent from the entire Sun Belt.

I think state policy is a red herring.

Migration, Properly Considered

In short, migration does matter. Any city that thinks it can be blasé about this is fooling themselves. On the other hand, surface numbers only tell us so much. We need to understand the dynamics going on underneath the hood.

Still the American Dream

I thought I’d wrap this up with something I think almost all of us agree on, namely that immigrants have been a huge source of strength for America. Even those who are very down on aspects of immigration – illegal immigration, too much immigration, H1B visas, etc – tend to endorse the concept of America as the land of opportunity. This is one of the huge strengths of our country, and something that gives us an edge on the rest of the world.

The New Year’s resolution for the Christian Science Monitor was, “Don’t Accept US Decline.” Joel Kotkin’s recent piece, “Don’t Give Up on the US” takes up this theme as well, arguing that people from around the world still want to move here, and that’s a big source of strength.

Conveniently, Robert Guest had a long piece in the Economist recently dealing with immigration that called America “a Ponzi scheme that works.” Here are some excerpts from this great piece I strongly recommend reading:

When he arrived, Mr Lee was astonished by how rich nearly everyone was. He recalls his first dinner with Americans: the huge bowls and immense portions. He was startled to see lights left on in empty rooms. He is still impressed: “The roads are so wide, the cars so big, the houses so large—everything is abundant,” he says.

Yet this is not why he came, and it is not why he stayed and became a citizen. For Mr Lee, America is a land that offers “the chance to be whatever you want to be”.
…..
Because America is so big and diverse, immigrants have an incredible array of choices. The proportion of Americans who are foreign-born, at 13%, is higher than the rich-country average of 8.4%. In absolute terms, the gulf is much wider. America’s foreign-born population of 38m is nearly four times larger than those of Russia or Germany, the nearest contenders. It dwarfs the number of migrants in Japan (below 2m) or China (under 1m).
…..
You can find welcoming clusters of ethnic minorities in other rich countries, but not nearly as many. In a European country, if you want Korean food and a particular denomination of Korean church, you might find it in the capital but you will struggle in the suburbs. In America, it is easier to find just the niche you want: Polish or Vietnamese, metropolitan or exurban, gay or straight, Episcopalian or Muslim, or any combination of the above.
….
If you like low taxes and the death penalty, try Texas. For good public schools and subsidised cycle paths, try Portland, Oregon. Even within states, the rules vary widely. Bath County, Kentucky is dry. Next-door Bourbon County, as the name implies, is not. Nearby Montgomery County is in between: a “moist” county where the sale of alcohol is banned except in one city. Liberal foreign students let it all hang out at Berkeley; those from traditional backgrounds may prefer a campus where there is no peer pressure to drink or fornicate, such as Brigham Young in Utah.
….
Besides Somalia and the Netherlands, Ayaan Hirsi Ali has lived in Ethiopia, Kenya and Saudi Arabia. Of all these places, she considers America to be the easiest place to assimilate. She has her niche, hanging out with “nerdy academics” and eating Japanese food. Unlike Mr Lee, she is more or less divorced from her native culture. But that works just fine in America. “I’m surprised how fast complete strangers will invite you into their houses,” she says. Asked what she dislikes about her new home, she mentions that the air-conditioning is too cold.

She admits that before visiting America she had a negative view of the country. Listening to her Dutch friends, she assumed that Americans were fat, loutish, naive and sexually repressed. “But then I came here and found it was all false,” she smiles.

Outsiders sometimes assume that it is hard to be an outspoken atheist in a devout country such as America. Ms Hirsi Ali thinks it is easy. Many Christians ask if she is a believer. When she replies no, she says “they don’t try to kill me. They say they’ll pray for me”.
….
Migration matters. Economic growth depends on productivity, and the most productive people are often the most mobile. A quarter of America’s engineering and technology firms founded between 1995 and 2005 had an immigrant founder, according to Vivek Wadhwa of Harvard Law School. A quarter of international patent applications filed from America were the work of foreign nationals. And such measures ignore the children of immigrants. Jeff Bezos, the founder of Amazon, is the stepson of a man who fled Cuba at the age of 15 and arrived without even a high-school diploma.

Because immigrants have to work, America does not have ghettos full of permanently jobless and alienated young immigrants, as in France, for example. This is perhaps why, although America has a high murder rate—three times that of Britain—its immigrants rarely riot. They are too busy earning a living…..Some of America’s talk-show hosts are quite vicious, but no openly xenophobic politician can attract the kind of support that France’s Jean-Marie Le Pen did in 2002, or that Austria’s Jörg Haider did.

Robert Guest also covered the same ground in a video presentation. If the embedded video doesn’t display, you can directly visit the PopTech podcast page to view it.

Last, but certainly not least, Richard T. Herman and Robert L. Smith just released their book, “Immigrant, Inc: Why Immigrant Entrepreneurs Are Driving the New Economy (And How They Will Save the American Worker).” I guarantee you will find the stories in this book both inspiring and humbling. It will make you proud of America.

24 Comments
Topics: Demographic Analysis
Cities: Indianapolis, New York, Pittsburgh

24 Responses to “Migration Matters”

  1. Jim Russell says:

    Aaron,

    Interesting to see all the aspects of migration packed into one post. Still, some additional data categories should be considered. It’s not so much that migration matters, but demography matters. We tend to play fast and loose with net migration and population numbers. Declining population has become synonymous with net out-migration. That’s a gross distortion.

    Each shrinking city has a unique demographic profile. Break it all down by age cohorts and the analysis gets very complicated. In my opinion, it also gets more useful. What’s the urban dependency ratio? A huge issue in cities with substantial legacy costs.

    Concerning natural replacement rates, there is a striking variance among Rust Belt cities. Lower rates make the net out-migration problem more acute.

    Overall, I think the net migration numbers tend to limit our thinking about how to make better cities. The population shift from Rust Belt to Sun Belt is dramatic, but the dominant narrative that folks such as Cox peddle won’t inform better policy. This is especially true if we insist on using state level data.

    A good example is Texas, a big “vote with your feet” winner. A lot of good that’s done El Paso and other lesser-tier cities in the state. Houston, Dallas and Austin will Hoover up graduates from those places as well as the Rust Belt. They also suck up talent from the entire Sun Belt.

    I think state policy is a red herring.

  2. Jonathan says:

    Great article, Aaron.

    I was fascinated by your description of the boomerang effect. I’ve seen it too, that once a family gets settled and grows up, the wife’s hometown becomes more attractive as a place to move to.

    As a New Yorker, the idea of the city as being a human smelter is intriguing. Combined with the boomerang effect, it has policy implications, too. If so many people move there, get a graduate degree, a spouse, two children, and 10-odd years of job experience, and then plan to move away back to where they originated, how much money can you spend on initiatives to retain them?

  3. cdc guy says:

    Jim, state policy isn’t (and can’t be) a red herring as long as that’s where local tax and incentive policies are governed.

    Tax policy in Indiana may be heavily dependent on income taxes, recently shifting away from property taxes. In, say, Oklahoma the mix available to a locality may be more dependent on sales and property taxes. That would definitely affect how Indianapolis and Oklahoma City compete for people and jobs.

  4. Brendan says:

    One thing that’s always bothered me about “vote with your feet” – I wonder what percentage of people moving from older industrial cities up north to the Sunbelt cities do so specifically because their companies move there. Southern cities seem more than happy to trip over each other for the opportunity to hand out huge incentives to companies for headquarters and factory relocations…at that point, the employees who are transferred to the new city do so less because they have any sort of favorable opinion of the city and moreso because their bosses were lured to what may be a less-than-ideal location with the promise of a free build-out.

    I realize that this probably seems like splitting hairs, but if people like Cox are going to use vote-with-your-feet theories to make value judgements about Northern cities and their public policies, I think it’s a hair worth splitting. Older industrial cities often don’t have the financial capacity to whore themselves out to corporations looking for handouts because they’re overburdened trying to fund now-outsized infrastructure systems left over after suburbanization and (ironically) the cannibalistic policies of Sunbelt cities gutted their employment bases.

  5. Jim Russell says:

    cdc,

    It most certainly can be a red herring. There are two perspectives that make this clear:

    1) Cities within the same state (same constraints) demonstrate significant variance in economic performance.

    2) Rust Belt cities, regardless of state (variance of constraints) exhibit the same pattern of economic struggles.

    State policy is a poor predictor of urban performance. Just look at how people vote with their feet.

  6. Jake M. says:

    Boomerang effect is definitely alive and well in places like Madison, Wisconsin, where it’s estimated that 1/3 of UW graduates that leave the state for work come back to the state within 10 years of their graduation. This has happened to me and several of my friends (in my case, it’ll now be twice in 5 years as of next month).

    The lesson it tells me is that quality of life matters for a lot of people, and having that exchange with others that are interesting and going places, and having the ability to find things to do will trump a lot of big money and cheap living when you get to a certain point in your career. Ultimately, people want to LIVE somewhere, not just get paid, and all the tax policy in the world won’t change it for many.

  7. Alon Levy says:

    I don’t think any discussion of immigration politics in the US versus Europe can be complete without talking about anti-discrimination legislation. In the US, employers have to report racial data to the government, and if they underrepresent minorities, an investigation may follow. In Europe, they do not; in France, the government is prohibited from collecting any kind of racial data, or engaging in any affirmative action.

    In addition, the US has freedom of religion protections that prevent some of the abuses in France or Switzerland. Switzerland recently banned minaret construction (which Ayaan Hirsi Ali called a vote for tolerance – no wonder the American Enterprise Institute likes her). France bans veils in schools. In the US, both policies would be unconstitutional.

    Although Robert Guest is trying to make the US look good with immigration, it’s equally true about black people. The black/white and Hispanic/white unemployment ratios in the US are both much lower than the ratios for the main minority groups in Britain, France, and Germany; the racial wage gaps are smaller as well.

    It’s not that the US accepts immigrants so much as that it came to terms with its racism in the 1960s, so that now it feels guilty enough about it to try to make things better. And at any rate, the US policy on immigration is changing, for the worse, as any Hispanic rights activist will tell you. France may ban any minority self-expression, but it has no immigration raids, unlike the US, and no major party that opposes any social benefits reform that might benefit immigrants the way the Republican Party does.

  8. Bill Savage says:

    I’d add that the boomerang immigration effect also happens within metropolitan areas. Young college grads from the suburbs move into the city (I’m thinking, oh, Northbrook and Lincoln Park) after they graduate from university. Then, after a few years of careerism and mating dances, they move to the ‘burbs for better public schools. These patterns are fractal, and happen at many levels.

  9. You ask: is it reasonable to expect that every place will be equally as attractive to people at all stages of their life? I don’t think so. Some places are better for young singles, some for families, others for retirees. So anyplace that is attractive to young singles is likely to be a structural source of out migration.

    The notion that cities can specialize around serving particular stages of life seems to me based on a late-20c notion of abundance that may not last much longer. Separation of the generations of a family is also a key source of the anomie chronicled by Robert Putnam in Bowling Alone etc.

    For both financial and spiritual reasons, I expect to see Americans start to give greater weight to family ties. Recent immigration, especially from very family-oriented cultures of Latin America, Asia, and the Islamic world, is likely to deepen that shift.

    There will probably always be young singles places, if only because that’s the one stage of life where separation from family, and socialisation with others of the same age, is a normal part of life tied ultimately to imperatives of maturation and mating. But I expect to see some decline of retirement-specialised places, as more and more retirees want nothing more than to remain part of their family.

  10. DMW says:

    I don’t think you pay enough attention to who a city is losing and who it is attracting. Over the past decade, lots of people left LA and San Francisco. (They also attracted lots of different types of people.) I don’t know how many went to Seattle vs Las Vegas, but they were certainly very different types of people who went to each place. It’s not enough to just be attractive to large numbers of migrants (like Las Vegas), if you’re going to be a successful, healthy city, you want to attract the smartest and most ambitious migrants (like Seattle or Portland).

  11. Thanks for the comments, everybody.

    DWH, I covered some of this point previously in a post called Migration: Geographies in Conflict. You are right that there may be inflows of one type while there are outflows of another. Something to consider as part of that look under the hood. I’m not certain that trend of some places becoming more exclusive is entirely healthy, however.

    Jarrett, we’ll see how this plays out. I don’t think too many places will be fully specialized, only that some places are more attractive than others to people at certain stages of their life.

    Brendan, there may have been more industrial relocations in the south in the past. Today it strikes me that most plants and such are more likely to move to Mexico or China than the South. I don’t want to dismiss migration as an artifact of relocation subsidies. Having said that, there’s no doubt that for the major auto plants that have expanded in the South, the level of public subsidy is truly mind boggling. There’s a ~40 page PDF floating out there with everything Tennessee gave Volkswagon, and my jaw hit the floor when I read it.

  12. Eric M says:

    I like this post a lot. I often disagree with your analysis on certain topics, but I think much of what you say here is quite apt.

    Really liked this: “Taking in people, adding value, then exporting them is one of New York’s core competencies.”

  13. Brendan says:

    Big industrial projects are one thing, but part of my job includes scanning the Bizjournals commercial real estate news page every day, and I see small- and mid-sized companies moving offices (and the prized white-collar jobs that go with them) to the South with enough frequency that I have to believe that subsidies have more to do with north-to-south relocation patterns than we might think. Again, I’d love to see the actual percentage of people who move to the South specifically because their job moved there versus the people who move there for personal reasons.

  14. Jim Russell says:

    http://www.post-gazette.com/pg/10005/1025745-28.stm

    Pittsburgh has staved off the worst of the recession better than most other cities, and 2010 should be no exception, according to Grubb & Ellis Co.

    In a 2010 forecast released yesterday, the real estate services and investment firm based in Santa Ana, Calif., sees another gloomy year for commercial real estate and office markets nationally, although one marginally better than 2009.

    But at the same time, Grubb & Ellis is predicting that the Pittsburgh region will continue to defy national trends. It said more space was being occupied than vacated in most sectors, and that vacancy rates in Pittsburgh have stayed below national averages during the recession. It expects both trends to continue this year.

    Much more to commercial real estate geography than state tax regimes. See Chicago, Boston, NYC, and (now) Pittsburgh.

  15. Brendan, it would be interesting to see the numbers. I don’t think that’s standard data, but it would make a good research project for someone with the resourced to do it.

  16. Alon, there’s probably something to what you say. But I think it is also true that the US is one of the rare countries in which national identity is not linked to a particular ethno-cultural experience (or at least much more weakly so, and for a much shorter history). This makes assimilation much easier. Also, I think there’s something to this idea of a weak welfare state that means immigrants here are hustling for work versus some of the extreme unemployment you see in Europe.

  17. Alon Levy says:

    The US does benefit from its choice to define Americanness in non-ethnic terms (and so does Canada). But France defines Frenchness is non-ethnic terms as well, and has a history of immigration from the same countries that sent migrants to the US in the early 1900s. The difference is that France celebrates monoculturalism, unlike the US and especially Canada, and was not forced to examine its racism until the 2000s.

    I’m not sure how much I buy the weak social welfare hypothesis. The US does have entrenched unemployment among the inner-city poor. Even in 2000, Harlem had 20% unemployment; inner-city Baltimore had 40% unemployment. Underclass unemployment in the US isn’t much better than in France. Where the US does better is that its minorities are more likely not to be in the underclass to begin with.

    Besides, Israel has social welfare, but most recent immigrants, who are Jewish, do not slip into welfare dependency; the group that does suffer from high welfare dependency is ultra-Orthodox Jews who’ve been in the country almost since independence. While Israel is more racist than the US and Canada, it’s not so racist against Jewish immigrants (unless they’re Ethiopian, and the Ethiopian-Israeli community does have high unemployment).

  18. Wad says:

    Alon Levy wrote:

    The US does benefit from its choice to define Americanness in non-ethnic terms (and so does Canada).

    I grow worried that this is becoming a passing notion, especially after the Iraq war started, continues today, and is growing worse as the downturn prolongs.

    We’ve heard many demagogues make in no uncertain terms what Americanness “really” is. It was made clear in its group identity and its belief system, which at its heart features a mythos of violence and social dominance orientation.

    It’s cold comfort to say that Americanness is not unique in time or space, or “just a phase that will pass”, because it usually passes in a bad way.

  19. Alon Levy says:

    It is becoming a passing notion, just like it became a passing notion temporarily in the 1920s. But like in the 1920s, the in-group is a declining majority. By 2050, the US is expected to have a nonwhite majority, which means that today’s nativists will have to redefine Americanness to include most new immigrant groups.

    This is no different from how in the 1960s and 70s the Republican Party redefined itself to appeal to non-Jewish ethnic whites. In the 1920s and 30s, the racist demagogues hated Italians and Poles, and often Catholics in general. In the 1970s, they hated only Jews and blacks. A declining majority can be uncanny in making sure it remains a majority.

  20. Wad says:

    Alon Levy wrote:

    It is becoming a passing notion, just like it became a passing notion temporarily in the 1920s. But like in the 1920s, the in-group is a declining majority. By 2050, the US is expected to have a nonwhite majority, which means that today’s nativists will have to redefine Americanness to include most new immigrant groups.

    Your optimism is unflappable, I’ll give you that.

    I am skeptical that demography will solve the American political crisis.

    I see the view that America is in a beautiful twilight. After the twilight comes the dark age.

    The “Real Americans” have crystallized the who and what of membership requirements. History also tells us that, across time and space, these movements tend to thrive in crises.

    Demographics may dilute their numbers but not their power. Whites could become 1/6 of the total population, but the point is moot if each one carries a revolver.

    Other warning signs:
    1. The proportion of crisis areas (rural and urban areas in decline) has grown in tandem with growth areas.
    2. The United States has evolved socially and economically, but not politically. Despite our social and economic transformation, the governing structure is still stuck in the 18th century. This system magnifies the political power of crisis areas at the power of vigorous industrial areas. This in turn amplifies the power of crisis areas. Attainment of power confers validity.
    3. This particular movement has underpinnings of a group mythology rooted in violent romanticism and possessing social dominance orientation. The latter is a common trait in nations with a strong timocratic social order — in both militaristic and propertied senses of the word.
    4. This particular movement is measurably regressing in intellectual and social development. What Americans are erroneously calling an ideological backlash is actually one that is tribal.
    5. We also must deal with the problem of a group that feels it has fallen from its origins. Godwin’s Law forbids me from mentioning a particular political party or its ideology to make a point, but there are other movements with similar grievances: irredentism, revanchism, theocracy and even its more extreme extension of thearchy. A need to recapture a common glory is a dangerous thing.

    What has happened to these movements? The horrors of 20th century Europe were highly intense but of short duration. On the other hand, the Middle East threw a Tea Party in the 15th century that continues through this very day.

    Should we be forced to choose between these two fates?

  21. Alon Levy says:

    I was going to mention the unmentionable party even before I saw point 5 of your comment… yes, the demographics that support racism today are the same as those that supported racism in 1920s’ Germany. The difference is just the proportions. 1920s’ Germany wasn’t 80% urban, and it didn’t have large, politically important region where politicians couldn’t get elected without the blessing of minority voters, which in today’s US consist not just of New York and Los Angeles but also Houston and Dallas.

    The reason I shrug off the possibility of a privileged 1/6 of the population keeping the rest down is that it’s only been observed in one modern country, Apartheid South Africa. And in several respects, US whites just don’t have that power. First, South Africa instituted apartheid while it was still a colonial state. And second, blacks in South Africa were poor; blacks are poor in the US as well, but as long as the racists can’t find it in them to appeal to educated immigrants, they’re fighting a losing game.

  22. cdc guy says:

    Jim Russell wrote:

    There are two perspectives that make this clear:

    1) Cities within the same state (same constraints) demonstrate significant variance in economic performance.

    2) Rust Belt cities, regardless of state (variance of constraints) exhibit the same pattern of economic struggles.

    State policy is a poor predictor of urban performance. Just look at how people vote with their feet.

    Some variances within a state can be explained by historic and developmental forces outside of state-level policy (especially historic concentrations of industrial specialization). Compare Warsaw, IN with Elkhart: the difference is that one specializes in RVs and the other in biomedical implants.

    Further, similar “patterns” of economic struggles can have varying “frequencies” and “amplitudes”: compare Indianapolis and Lansing. Lansing got pounded much worse by GM’s failure, and that’s arguably an artifact of one state’s policy embedding lots of bias toward the US legacy auto manufacturers.

  23. Jim Russell says:

    Comparing state capital to state capital is a good idea. It might also help to compare college town to college town (e.g. Bloomington and Ann Arbor). These cities tend to be outliers. But comparing one state with another generates many more questions than it answers.

    Regardless, a lot of domestic migration modeling has already been done. We needn’t remake the wheel. The biggest predictors are identified (e.g. climate). I’ve yet to see state tax regime listed among them.

  24. cdc guy says:

    LOL, Jim. I’ve been telling Aaron for several YEARS now not to overlook the simple answer (climate). Glad there’s finally proof. :)

    I agree that state-level economic (or economic-geography) modeling in an integrated national economy is tough. But differences can be subtle and are almost always at the margins, and state-level policies have their effects at the margins. It’s more like a joint variable than an independent one but there is nonetheless some identifiable effect.

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