Why doesn’t everyone leave Chicago or Illinois?

With the recent news of Chicago’s continuing population decline as well as population loss in some suburbs, some critics have suggested this all makes sense with the problems facing Chicago and the state of Illinois. The argument goes like this: when social, economic, and political conditions are bad, people vote with their feet and leave. Look at all the people moving to Texas and the Sun Belt!

However, there are multiple reasons people stay in Chicago and Illinois. Among them:

  1. It is costly financially to move. It takes time and money to move to a new location. Having a good job on the other hand is needed.
  2. It is costly socially to move. Finding new friends and social connections can be difficult, particularly in today’s society where Americans tend to stick to themselves.
  3. They have a good job in Illinois or Chicago. There are still plenty of good jobs here; Chicago is the #7 global city after all and there are lots of headquarters, major offices, and research facilities alongside large service and retail sectors.
  4. They have families or ties to the area. The Chicago region is the third biggest in the country – over 9 million residents – and there are lots of residents with long histories and/or many connections.
  5. Both places have a lot of amenities. One of the busiest airports in the world? Impressive skyline? Access to Lake Michigan? Good farmland? Located in the center geographically and socially in the United States? Land of Lincoln?

All that said, for the vast majority of Chicago and Illinois resident, there are not enough negatives outweighing the positives of staying. (This is not the same as saying current residents are happy or wouldn’t prefer to live somewhere else.) Compared to other American locations which are growing more quickly, it doesn’t look good but Chicago and Illinois also aren’t emptying out like American major cities did in the postwar era or some rural areas.

More on the reduced geographic mobility of Americans

A new book from economist Tyler Cowen discusses how the geographic mobility of Americans has declined:

Nowadays, moving from one state to another has dropped 51 percent from its average in the postwar years, and that number has been decreasing for more than 30 years. Black Americans, once especially adventurous, are now especially immobile. A survey of blacks born between 1952 and 1982 found that 69 percent had remained in the same county and 82 percent stayed in the same state where they were born…

One reason people don’t move where the jobs are is because of real-estate prices — which in turn are kept at high levels by regulatory restrictions and NIMBY-ism. In New York City in the 1950s a typical apartment rented for $60 a month, or $530 today if you adjust for inflation. Two researchers found that if you reduced regulations for building new homes in places like New York and San Francisco to the median level, the resulting expanded workforce would increase US GDP by $1.7 trillion. That won’t happen, though: More homes would diminish the property values of existing homeowners.

That locked-in syndrome is a factor in economic stagnation, too: A recent Wells Fargo survey found that white-collar office productivity growth was zero. As the economy was supposedly recovering from the financial crisis, from 2009 to 2014, American median wages fell 4 percent. Men’s median incomes today are actually below 1969 levels. Had we retained our pre-1973 rates of productivity growth, the typical household would earn about $30,000 a year more than it does.

Despite all the hype attached to a few tech companies, far fewer companies are being formed than in the 1980s, and fewer Americans are working for startups. Such new companies are linked with rapid job creation. We’re coming close, Cowen says, to realizing the 1950s cliche (not really true then) of everyone clinging to a job at a handful of huge, soul-crushing companies.

As I’ve seen a number of stories about declining mobility (see earlier posts here, here, and here), I wonder if the period between the early 1900s and 1960s was simply unusual. The American economy was doing well (except for the Great Depression and the World Wars) and other factors including legal segregation in the South drove mobility. What if more limited mobility is “normal” outside of unusual time periods? Should we expect that Americans should be willing to pick up and move just because there may be a job or an opportunity elsewhere? I would guess humans default toward less geographic mobility because moves limit the ability to develop communities. In fact, it has only been in recent centuries that more of the population has even had the opportunity to travel or move large distances from where they were born. Perhaps the real question here is to find out more of what would lead people (whether in the United States or elsewhere) to move significant distances.

Why Americans do or do not move

An article about the most and least mobile cities in the United States includes some discussion of what pushes people to move or to stay put:

“There are two main determining factors whether people move or not,” says Nathalie Williams, a sociology professor from the University of Washington. The good: “The better people feel their lives are going, the less likely they are to move elsewhere.”  The bad: Lousy economies can force people to head for greener pastures.

But of course, economic insecurity can also keep people in the same place.

After the housing bust in 2007, migration slowed down, because uncertainties about the job market had made people nervous about changing jobs and deciding to move on. They were less likely to upgrade to a bigger and nicer home. Plenty even found their homes deep underwater, and were unable to sell.

Now that the recession is over, mobility is finally picking up again, says Kenneth Johnson, a demographer at the University of New Hampshire. And jobs lure people, especially younger ones who haven’t put down deep roots, to new centers of employment.

The short explanation is that economic factors are influential. But, there may be three caveats to this: (1) movement can occur because of either a good or bad economy, (2) it may depend on people’s stage of life, and (3) perhaps there is more to this than economics. Regarding the first point, the article juxtaposes Detroit and Honolulu, the two cities that are least mobile. These are two very different places: one is doing well, the other is not. Later, it is noted that several of the most mobile places are college towns with populations that are more transient (this involves students but also others whose jobs in academia and related industries can lead them from college town to college town). Finally, the description of life in Honolulu cites some economic factors (low property taxes) but also includes a unique cultural setting that some enjoy.

In the end, I’m not sure this article does much to help explain why people move. They move less when economic times are good and bad. Certain places are more mobile because of institutions that encourage transience (colleges) while other places have quality of life traits that discourage moving. Does this mean the most mobile places are somewhere in the middle of these rankings? Or, is it all relative to what people in the region have experienced in recent years?

American geographic mobility still limited

Richard Florida highlights how the percent of Americans moving each year has slowed, particularly compared to the postwar era:

Just slightly more than one in ten Americans (11.2 percent) moved between 2015 and 2016, almost half the 20.2 percent rate back in 1948, when the Census began tracking American mobility. Mobility was once the cornerstone of the American Dream, but today Americans move less often than Canadians, and only a bit more than Finns or Danes.

Both longer and shorter moves have declined over this period. Just 6.9 percent of Americans made shorter moves within the same county, down from 13.6 percent in 1948. The mobility rate for these types of moves plummeted between 1998 and 2008 (with the economic crisis) as the chart below shows, and has declined more slowly ever since.

(David Ihrke/U.S. Census)

Longer moves between counties declined from 6.4 percent in 1948 to just 3.9 percent today over the same period.

(David Ihrke/U.S. Census)

Florida goes on to provide several possible reasons for this more limited mobility. But, two quick issues come to mind:

  1. The historical comparison is both useful and might be a red herring. On one hand, we can consider trends over six decades and this provides helpful context. Too many current news stories talk about trends based on one year changes in data. On the other hand, the immediate decades after World War Two may have been extremely different with general prosperity in America and growing suburbanization. Should we expect the same levels of mobility today or was the postwar era unique?
  2. Is there an ideal level of mobility? I know Florida is in favor of mobility because it means workers can flock to places with jobs and cities that have certain features will attract motivated and talented residents. Clearly, no mobility would create issues as there could be significant mismatches between jobs and employees. But, instead of making comparisons to a few other countries, what would be a healthy level of mobility in the United States?

All that said, a less mobile United States is a different United States.

Peak urban millennial reached?

A new study suggests millennials are now less interested in settling in big cities:

Millennials have been singled out as the stuff cities are made of, but Dowell Myers, a professor at the University of Southern California’s Price School of Public Policy, says the real estate industry should be bracing for a shift back to suburbs…

In a study published in late April in the journal Housing Policy Debate, Myers examined Realtor surveys and various sources of federal data…

Myers, however, found that circumstance was the likely driver of urban living: Three cycles — one demographic, one economic and one housing-based — converged in the 2000s to drive millennials into downtowns.

All three have reversed their effects, he said.

If this holds up, two possible consequences:

  1. Cities have worked hard in recent decades to appeal to young, educated adults – the Creative Class, in particular. If this group doesn’t move to cities in as large of number, who will cities try to attract? They may still go for wealthier empty nesters and retirees who can purchase housing and contribute to the tax base. But, they don’t quite have the same benefits as vibrant, motivated young people.
  2. If they aren’t going to the big cities, suburbs and suburban developers will increasingly look for ways to attract this demographic. Denser, more vibrant suburban areas could be appealing as they offer “city-lite” living. This could lead to more smaller yet having-all-the-features suburban housing.

Explaining Americans’ decline in geographic mobility

Derek Thompson highlights a decline in movement and summarizes what might be behind it:

Between the 1970s and 2010, the rate of Americans moving between states fell by more than half—from 3.5 percent per year to 1.4 percent. “It’s a puzzle and it’s the one I wish politicians and policy makers were more concerned about,” Betsey Stevenson, a former member of Obama’s Council of Economic Advisers, told The New York Times this week. Fewer Americans moving toward the best jobs and starting fewer companies could lead a less productive economy. On Thursday, the Financial Times reported that productivity “is set to fall in the U.S. for the first time in more than three decades.”…

Every dimension of declining American dynamism is connected. The slowdown in most areas’ business development comes from a shifting tide in American migration. For 100 years, population flowed from poor areas to rich areas. Now the trend has reversed. Land-use policies prevent more middle-class families from living in productive areas, because housing becomes too expensive. Meanwhile, the rich can afford to cluster in a handful of metros where entrepreneurship is a norm, while business dynamism falls in the rest of the country. There used to be too much land to settle. Now there’s not enough land to share.

Two quick related thoughts:

  1. You regularly see people make the argument that people should just pick up and move to where there are more opportunities, meaning jobs and a cheaper cost of living (generally referring to housing and maybe taxes). There is even a single case in Evicted where a person moves from a poor Milwaukee neighborhood to a southern city and seems to be doing well. However, moving is not necessarily easy (see #2).
  2. Why are economists the only ones summarized here? Are sociologists not paying much attention to this? On one hand, I can see how economics would drive decisions about moving. Yet, it is not the only factor. People have social connections wherever they live and it can be difficult to form new social networks. While Americans always have prized mobility, don’t they also celebrate finding your roots and being a presence in your community? (Granted, Americans may be doing neither: moving less and being less engaged in civic life.) This reminds me of some public housing residents who didn’t want to leave pretty bad conditions in high-rise buildings. Or, what about explanations like those in The Big Sort or The Rise of the Creative Class where people choose to live near people like themselves.

Majority of older Americans want to “age in place,” not move to the city

An article profiling some suburbanites who moved to the city as older adults admits that this isn’t the path desired by most Americans:

But you didn’t move back into the city, did you? Instead, you’re doing what the vast majority of American adults prefer to do: “aging in place.” According to a recent survey of adults 45-plus by AARP, 80 percent of respondents agreed that “what I’d really like to do is remain in my local community.”

But for those willing to make the exodus, the move into Chicago proper can be extremely rewarding…

Still, the Zimmermans’ move into town runs counter to overall trends. The 2015 data from the National Association of Realtors show that among “repeat buyers” (most likely to be boomers and Gen Xers), only 12 percent are buying in urban areas. An equal number are going to rural areas, 20 percent are going to small towns, but most — 53 percent — are buying in the suburbs.

And here’s a bit of a shocker: Although studies show that a third of retirees don’t expect to move at all, those who do move are not necessarily even downsizing. According to a recent survey by Age Wave, a firm that specializes in research on the aging population, only about half of retirees 50-plus who move after retiring choose a home that’s smaller; 19 percent move to a place of equivalent size, and 30 percent actually upsize.

There are always a good number of stories about urban revivals and people flocking to American big cities for the amenities and short commutes. However, the stories tend to obscure that the majority of Americans do not choose this path. When asked, many Americans say they want to live in small towns than anywhere else.

Particularly for older adults, the move to the city is probably only possible for those with significant means. Additionally, where many of those people want to move – is in nicer neighborhoods with cultural events, access to jobs, and newer construction – as opposed to living in many of neighborhoods of the city.

At the same time, aging in place in the suburbs presents unique challenges with its emphasis on single-family homes and driving. Homes can be difficult to maintain for decades and driving may not be possible at a certain point. Then, the spaciousness of the sprawling suburbs can be a significant hindrance to providing social services.