City Journal Special Issue 2013

After Bloomberg:
An Agenda for New York

Special Issue 2013
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City Journal

Aaron M. Renn
Leaving Town
Metro New York hemorrhaged $49 billion during the 2000s as residents sought opportunity elsewhere.
Special Issue 2013
Internal Revenue Service data show that the greater New York area suffered a net loss of 1.4 million domestic migrants from 2000 to 2010.

The New York metropolitan region is losing people. Though the region and New York City itself continue to grow overall because they have more births than deaths, the Census Bureau estimates that the metro area lost almost 2 million net domestic migrants during the 2000s; that is, 2 million more people left the area for other parts of America than moved there from other parts of America. The region offset part of that loss with a nation-leading net gain of more than 1.1 million international immigrants over the same period. But it wasn’t enough: the region’s total net loss of people to migration amounted to 858,000. And the trend has continued into the new decade, with the New York metro area hemorrhaging another 254,000 net domestic migrants since 2010, even as the economic downturn has slowed migration generally within the United States.

When people leave a city, they take their incomes with them, of course. The Internal Revenue Service lets us track the flight of income by publishing migration data based on tax returns. According to the IRS, metro New York suffered a net loss of 1.4 million domestic migrants between 2000 and 2010. (The IRS’s emigration tally is smaller than the census’s because not everyone files a return.) During the 2000s, domestic emigrants took $49 billion to other parts of the country. The cumulative loss, as the years pass and people keep heading for the exits, is staggering.

Many of these residents go to the Sunbelt. During the 2000s, the Miami metro area was the Number One destination for both New Yorkers and their income, sucking away more than 125,000 people over the decade and $6 billion worth of income. (Metro New York lost $14.8 billion in income to Florida as a whole, making it the top state in grabbing New York income.) Of the ten regions that attracted the most New Yorkers, four more were in the Sunbelt: Orlando, Atlanta, Tampa–Saint Petersburg, and Charlotte. New York also lost significant numbers of migrants to the nearby Poughkeepsie and Bridgeport metro areas, though these closer migrations are best understood as a type of far-flung suburbanization. The ten areas that attracted the most New York money included all of those five Sunbelt regions except Charlotte, while second and third place went to nearby Bridgeport–Stamford (home of wealthy, hedge-fund-dominated Greenwich) and Poughkeepsie.

Chart by Alberto Mena
Charts by Alberto Mena
Chart by Alberto Mena

Migratory patterns shifted over the course of the 2000s. During the first half of the decade, for example, more people left metro New York for California than for Texas, but from 2005 on, Texas overtook California. Still, more New York income continues to flow to California than to Texas. Taken together, those statistics suggest that the dysfunctional Golden State, even though it’s losing migrants to its booming Lone Star competitor, can still attract those with higher incomes.

Again, the New York region attracts far fewer domestic migrants than it loses. But its prime sources of new residents are heartland regions like Chicago (the leading net exporter of people to the New York metro area), Detroit, Pittsburgh, and St. Louis. Also high on the list are such college towns as Ann Arbor, Michigan; Lexington, Kentucky; Bloomington, Indiana; and State College, Pennsylvania—presumably because many of their residents come to work in the Big Apple after graduating.

Certain regions don’t figure prominently in the net-migration rankings because inflow and outflow between them and New York are relatively balanced. Yet in some cases, very high numbers of people are moving between the two regions. For instance, the Boston metro area attracted only 2,800 net migrants from the New York area during the 2000s, but over the same period, a whopping 160,000 people either moved from Boston to New York or from New York to Boston. Similarly, 111,000 people moved between New York and the Bay Area in California, even though the former lost only 8,100 net migrants to the latter. High “circulation rates” like these are nothing to worry about. In the interconnected, talent-driven global economy, intense circulation between places like New York and San Francisco is key to the vibrancy of human-capital networks.

Nor are New York’s migration woes a problem for the country as a whole. After all, the region continues to take in immigrants from abroad, turn them into Americans, and send them to other places. In much the same way, it takes in young, relatively untrained singles and sends out skilled workers, often with families. One can therefore view New York as a gigantic refinery of the nation’s human capital.

But the high net outflow of people from the New York metro area bodes ill for the region’s future, as it represents a huge drain of spending power and a diminution of the tax base. People are voting with their feet to leave New York. Some may move for retirement to warmer climes, but others are doubtless leaving for a lower cost of living and lower tax rates. New York is losing out, and there’s much work to do in fixing the policies that drive up its costs and taxes.

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