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Why Urban Migration Numbers Don’t Always Mean What They Seem to Mean

We focus on people leaving cities, but we tend to ignore where they came from and what they take with them.

New,York,City,Skyline,With,Brooklyn,Bridge,And,Lower,Manhattan
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People are fleeing the cities and taking their money with them. That’s what you’d gather from headlines like the one in the New York Post that read “Wealthy New Yorkers who fled in 2020 took $21B in income with them.”

There’s some truth in the urban exodus numbers. I’ve referred to them before myself. But the headline figures can obscure important nuances.

Particularly for major coastal hubs such as New York, the data typically refer to net domestic migration – people moving within the United States. They usually ignore or separate net international migration, of which these cities get a lot. Some of the net domestic outmigration actually comes from a prior international inflow.

Consider an immigrant couple from China that moves to Queens. They have two children in New York. Those children grow up, go to college, then end up moving to another city somewhere else in the USA. From a domestic migration perspective, that's zero in, two out. But it’s misleading.

As they grow older, the parents themselves buy a house on suburban Long Island. From the standpoint of New York City, that’s another case of zero in, two out. So, this immigrant couple coming to New York and raising a family leads to domestic outmigration of four. That’s hardly what most people think of when they talk about people fleeing the cities. But any city with large numbers of immigrants is going to generate similar moves of this type over time. They’re based on an earlier in-migration from somewhere else in the U.S. or outside its borders.

Big cities often take in younger, aspiring professionals, allowing them to gain valuable professional experience and build high-value networks they can then take with them when leaving. Only a limited number of people are going to stay in the first place of arrival to build a life. These locations are frequently winnowing out talent at the higher levels of success, similar to the up-or-out model of many professional service firms. The people who end up leaving still benefit greatly from their experience there, which could be conceptualized as a kind of graduate program or medical residency equivalent. The city benefits as well.

Consider two young people who move to the city as singles. They end up getting married, having a child and living on the Upper West Side of Manhattan. As their kid approaches school age, they leave. That’s two in, three out for net domestic outmigration of one. But again, it’s not what most people think when they read the headlines. Their initial arrival counts too.

There are similar nuances when it comes to money. The income loss often touted in the media is based on the reported incomes of the people who move. But in most cases, these movers don’t actually take any income with them. Many if not most of these moves happen when people change jobs. If someone leaves a job at Google in New York to take one at a startup in Austin, Texas, he doesn’t take any money with him. In most cases, the New York office will simply hire someone new to fill that job at roughly the same salary.

Income is a rough proxy for talent. The loss of higher-income residents can represent a talent drain. But for most elite locations in the country, like New York or San Francisco, this is another part of the natural talent life cycle. Many of those leaving were nearing the peak of what they were going to achieve in the big city. There are always hungry cohorts behind these leavers looking to see how far they can rise.

Remote work does have the potential to alter this equation. If someone can move from San Francisco to Boulder and keep the same job, that does potentially represent a loss of income for the city they move from. The rise of remote work does alter the calculus in some places.

And high net outmigration does sometimes represent a genuine loss. Cities shouldn’t be blasé about it. But there are structural factors that create high domestic outmigration, and the true economic loss is not as large as it seems.



Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.

An urban analyst, consultant and writer. He can be reached at aaron@aaronrenn.com or on Twitter at @aaron_renn.
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