Top 10 States People Are Fleeing
New York, Illinois and Louisiana are expected to lose more residents than they gain this year.
By Jenna Goudreau, Forbes.com
Dec 8, 2010
"We're seeing one of the lowest mobility rates in a century," says Nathaniel Karp, chief economist for banking firm BBVA Compass. Karp says the recession has forced many people to stay put because they are unable to sell their homes, cannot find jobs or are unwilling to relocate for work if it means sacrificing a partner's stable position.
The slowdown makes the question of who's moving and why even more significant than in years past. Using 2010 projections by Moody's Economy.com, Forbes ranked the states in which people are leaving faster than they are arriving. Economists report several overlapping trends that may be forcing people out of certain states as much as they are pulling them toward others.
At No.1 on our list, New York is expected to wave goodbye to 49,000 more people than it gains this year. The state has seen a steady loss of residents over the past five years, losing an average of 100,000 people per year. Karp explains that, because New York is a large state, it may report greater movement than others, but notes that population size is not the only reason residents are fleeing.
"In order to move, you need to be able to sell your home," says Karp. "The housing market [in New York] has not gone through the meltdown that other states have gone through."
While New York homeowners may have a slightly easier time selling their homes and moving to greener pastures, a competing trend is the number of unemployed renters who can no longer afford the high cost of living in and around New York City. Karp says the expensive lifestyle and high taxes may force the long-term unemployed to move on to more affordable regions.
The Prairie State came in at No. 2. Illinois is expected to lose 27,000 people this year, consistent with its average annual loss over the last five years. The losses are likely linked to the state's economy and tax structure. Job losses in manufacturing and industrial machinery are likely pushing people out of the state, Karp says, adding that state taxes have also been "an issue" for many residents.
Midwestern states, in fact, are well-represented in the top-10 list. Nebraska (No. 4), Kansas (No. 5) and North Dakota (No. 9) are among the many central states projected to lose residents in 2010.
The movement may be related to broader structural changes. "For most of the decade people have been moving to the South and Southwest," says Kenneth Johnson, a demographer and professor of sociology at the University of New Hampshire. He believes the trend is closely related to life cycle: Retirees are attracted to states with temperate climates, affordable costs of living, good health care and pretty scenery. For these reasons, Florida and Arizona are expected to receive an influx of hundreds of thousands of people this year.
At the same time, young people in search of jobs may move to the regions to work in services and high tech, says Karp. Texas and North Carolina are home to some of the largest public companies in the country, like Exxon Mobil and Bank of America, and are also among the top-five most attractive states this year.
At least two states in the top 10 are victims of unfortunate circumstances. Louisiana (No. 7) and Mississippi (No. 10) are both expected to lose residents this year. In 2006, the year after Hurricane Katrina ravaged the Gulf Coast, almost 300,000 people left Louisiana and nearly 20,000 moved out of Mississippi. The projected losses this year, though much milder, could be related to the impact of the BP oil spill.
Though specific conditions are pushing people out of some states, economists say more people moving around would be a positive sign for the economy. "Mobility makes it easier to respond to economic cycles," says Karp. "People are still living in places where there are no jobs. That's one of [the] reasons why the unemployment rate remains really high."
Top 5 States People Are Fleeing
No. 1: New York
Projected Loss: 49,000 people
Population: 19.7 million
Percentage Change: -0.25%
The Big Apple may lose more people than it gains in 2010 because of the depressed job market, high cost of living and an ongoing trend of retirees and job-seekers heading to the South and Southwest.
No. 2: Illinois
Projected Loss: 27,000 people
Population: 13 million
Percentage Change: -0.21%
Economist Nathaniel Karp says Illinois' tax structure and loss of manufacturing jobs may be pushing people out of the state this year.
No. 3: Ohio
Projected Loss: 8,900 people
Population: 11.6 million
Percentage Change: -0.08%
Over the last five years Ohio has lost an average of about 30,000 people per year. This year its losses are projected to slow, but remain significant enough to put the state at No. 3.
No. 4: Nebraska
Projected Loss: 5,900 people
Population: 1.8 million
Percentage Change: -0.33%
Nebraska has seen steady losses since 2001. The projected number of people leaving the state this year is particularly high when considering its small population.
No. 5: Kansas
Projected Loss: 4,200 people
Population: 2.9 million
Percentage Change: -0.14%
The Census Bureau reports modest gains for Kansas since 2007. The losses expected this year are similar to those seen in the earlier part of the decade, when the state lost an average of 4,500 per year.
