Millennials jump in?

Posted on May 30, 2019 by grim

From CNBC:

Many millennials say buying a home may finally be within reach

Samantha Suckno says knew she wanted to start to build a life with her soon-to-be husband in a home they owned.

So she and her fiance, Jason Ortiz, came up with a plan: move into a rental property together, pay down their bills and start saving. The couple also cut back on traveling.

“The money I was using to pay for my own rent was basically going into paying off credit card debt,” the 31-year-old said, noting that when she was on her own she “had been living paycheck to paycheck.”

Suckno and Ortiz, 37, were married in February 2018. In July, they bought their first home together in Rockaway, New Jersey.

Their decision to make the leap into homeownership may be part of a growing trend.

A new study by Chase Home Lending found 52% of millennial first-time homebuyers feel financially ready to buy a home. And 70% said they are willing to cut back on extra-curricular activities, like shopping, movie-going and a spa visit, once a month to make it happen. The bank surveyed 1,000 first-time U.S. homebuyers, ages 22 to 38, in March.

…

They also have things like student loan debt and delayed marriage to thank for the late start. Additionally, older millennials graduated during the last recession and witnessed the housing crisis.

“They went through a process where renting seemed like a better idea and a safer outcome,” said Sean Grzebin, head of consumer originations at Chase Home Lending.

Then there is the desire they have for a more balanced life that includes spending money on traveling and going out to dinner, he added.

However, now “they are starting to realize the importance of homeownership and the necessity to have some balance in terms of sacrificing those things,” Grzebin said.

In fact, Suckno said she was among the last of her friends, fellow millennials, to buy a home.

Posted in Demographics, Economics, National Real Estate, New Jersey Real Estate | 143 Comments

What NJ Makes…

Posted on May 29, 2019 by grim

From the APP:

NJ manufacturing jobs grow, but will parents let kids skip college?

Aquatherm, a Lakewood manufacturer that makes solar heating systems for swimming pools, has no shortage of ideas that could help its business grow.

Workers, on the other hand, are another story. 

“I see our engineers come up with ideas and they have to stop sometimes and we can’t move forward because we don’t have the right people on the production line,” Patricia Cubero, general manager.

Help is on the way to Aquatherm and other blue-collar firms, even if a new effort won’t pay off for several years. New Jersey is launching a program in Ocean County to reignite interest in careers that fell out of favor by offering field trips in manufacturing for students and an all-important constituency — their parents.

It’s a step, officials say, toward rebuilding what has been a broken ladder to the middle class. And it comes on the heels of a recent series by the USA TODAY NETWORK New Jersey and the Asbury Park Press that looked at what it will take to restore the American dream.

…

New Jersey’s manufacturing history is rich. It was sparked by Alexander Hamilton, who turned Paterson into America’s first industrial city, powered by the Great Falls, seen in the video above. It later was home to workers who made RCA television sets and Ford Motor Co. automobiles.

Employers began to flee New Jersey for lower cost states and countries, taking workers with them. The manufacturing sector dropped from nearly 550,000 jobs in 1990 to fewer than 240,000 in 2015, according to the New Jersey Department of Labor and Workforce Development.

But in the past four years, the sector has shown signs of life. Its job growth rate of 5.6 percent matched the overall employment growth in the state, and topped the manufacturing job growth nationwide of 4.2 percent. Learn more about the fields with the fastest growth in the video at the top of this story.

In New Jersey, for example, machinists make on average $50,160 a year, while tool and die makers earn on average $55,680 a year, according to the U.S. Bureau of Labor Statistics. 

…

New Jersey might be finding a niche in so-called advanced manufacturing, which depends on technology and automation to make the end product.

“We’re not going to compete in manufacturing where labor costs themselves are a huge part of the final cost of the product,” Rutgers University economist James W. Hughes said. “But with advanced manufacturing, it’s much more automated and labor is much more skilled.”

The rebound is putting pressure on the industry. Some 360,000 manufacturing jobs in New Jersey are unfilled, according to the New Jersey Manufacturing Extension Program. And the labor crunch isn’t expected to ease; 80 percent of jobs are held by workers between the ages of 45 and 65.

The jobs are a potential pathway to the middle class, and they don’t require a four-year college degree. But both manufacturers and educators say convincing parents that the field is right for their children is a tough sell.

Posted in Economics, Employment, New Jersey Real Estate | 44 Comments

Tax the shore

Posted on May 28, 2019 by grim

From WHYY:

N.J. may roll back tax on Shore rentals, but details remain fuzzy

New Jersey lawmakers are moving to exempt many Shore-goers from an unpopular new tax on home rentals, but it’s still unclear when the change would take effect — and who exactly it would help.

A vocal group of renters and owners has been pushing for the change since last year, when lawmakers worked with Gov. Phil Murphy, a Democrat, to create a nearly 12% tax on short-term rentals.

The law was intended to make accommodations booked through online marketplaces such as Airbnb subject to the same taxes as hotels and motels.

But the way the “Airbnb tax” was written, it applies to all rentals lasting less than 90 days not booked through a real estate broker, including Shore properties filled with the help of yard signs, classified ads, Facebook groups or personal connections.

The Assembly voted unanimously this week to approve a measure, A-4814, that would make the tax apply only to rentals arranged through marketplaces where bookings can be offered, reserved and paid.

That would spare renters who arrange their stays directly with property owners. The change would take effect immediately upon being signed into law by the governor, according to the bill.

But Sen. Vin Gopal, a Democrat from Monmouth County sponsoring a companion bill in the upper house, said he wants to amend the measure so the exemption applies more narrowly to owners with two or fewer units and their guests.

And under his bill, the change would not take effect “until the first day of the first calendar quarter beginning at least 60 days following the date of enactment” — meaning Oct. 1 at the earliest.

…

The state has estimated it will bring in about $8 million from taxing short-term rentals this fiscal year — and about $12 million to $15 million next year. The state’s current budget is $37.4 billion.

Posted in Property Taxes, Shore Real Estate, Unrest | 56 Comments

Rats leave sinking ship

Posted on May 25, 2019 by grim

From Bloomberg:

Florida Is the Big Winner as the Wealthy Move Out of Northern States

Roughly 5 million Americans move from one state to another annually and some states are clearly making out better than others.

Florida and South Carolina enjoyed the top economic gains, while Connecticut, New York and New Jersey faced some of the biggest financial drains, according to a Bloomberg analysis of state-to-state moves based on data from the Internal Revenue Service and the U.S. Census Bureau.

Connecticut lost the equivalent of 1.6% of its annual adjusted gross income, as the people who moved out of the Constitution State had an average income of $122,000, which was 26% higher than those migrating in. Moreover, “leavers” outnumbered “stayers” by a five-to-four margin.

…

Florida posted a net income influx of nearly 3% of the state’s adjusted gross income in 2016. South Carolina, Idaho and Oregon were also among the largest gainers in the interstate shuffle.

“Florida’s powerhouse economy continues to churn out new jobs, retiree migration to Florida is on the rise, and millennials are coming into their prime home-buying years,” Brad O’Connor, chief economist for Florida Realtor, said in a report before the trade association’s annual summit.

…

New York’s annual net loss was the highest, with a net $8.4 billion leaving the state. Exiting incomes of $19.1 billion were replaced by people who brought in $10.7 billion less in income. Illinois and New Jersey were next with net outflows of $4.8 billion and $3.4 billion, respectively.

Those three states also had three of the four highest proportions of outbound versus inbound residents last year, according to the United Van Lines, the largest U.S. household goods mover.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 15 Comments

Has Asbury made it?

Posted on May 21, 2019 by grim

From the NYT:

Carolyn Curtin moved to Asbury Park in 2002 and fell in love with a late Victorian house with a falling-down porch and heaven knows what other problems. She knew nothing about construction, but borrowed a level from a crew rehabbing a building across the street to check it out.

“I walked all three stories and threw down the level; everything was spot on,” she said. She bought the house at auction for $209,000 and began fixing it up. Then she fell in love with her plumber.

Today, Ms. Curtin, 55, has parlayed both romances into a business called Salvage Angel by the Sea. In a former Canada Dry warehouse on the west side of the city, she and her partner, Brett Holloway, collect the architectural fragments of Asbury Park’s upheaval for others to repurpose.
…

Ms. Curtin is one of the risk-takers who moved to this historic oceanfront resort when it was a capital of crime, drugs and disappointment. Many came, as she did, for the music and art scene that thrived amid the erosion, with small businesses giving the community its character as a culturally rich outlier on the Jersey Shore.

Now that large-scale development has finally taken off after a few false starts, the streets are safer (crime dropped by 13 percent last year) and Asbury Park is attracting more affluent weekend and full-time residents. Stalwarts like Ms. Curtin are poised both to profit from and mourn the transformation.

On the one hand, median home values have risen 42 percent in the last five years. Instead of eyesores, visitors see retrofitted historic buildings like the three-year-old Asbury Hotel, built in a former Salvation Army boardinghouse, and new construction like Asbury Ocean Club, a luxury condominium-and-hotel complex slated to open this summer. The once-desolate boardwalk and shabby downtown have become vibrant retail corridors.

On the other hand, the rising cost of rent, goods and services is putting a squeeze on the population of 16,000 — 30 percent of whom are living below the poverty line — and, some say, threatening the quirky energy that makes Asbury Park unique.

Posted in Economics, Housing Recovery, New Development, Shore Real Estate | 156 Comments

Gives me hope

Posted on May 18, 2019 by grim

Click the link, look at the photos. Audible did an incredible job. This is far cooler than anything anyone is doing in SF and the Valley.

From the Star Ledger:

Audible just opened an office inside an old N.J. church, complete with organ pipes and stained glass

An old Newark church has come back to life — and with a new purpose. 

Audible on Friday officially opened its new 80,000 square foot office space, dubbed “Innovation Cathedral,” inside the renovated Second Presbyterian Church on James Street. 

Twenty-five years after the church shut down and its congregation dissolved, the once-abandoned building now dazzles with stunning stained glass windows — all expertly restored. 

There’s a four-lane bowling alley (AudiBowl), conference rooms named after famous Newarkers like Sarah Vaughan and Lilly Martin Spencer, and the old choir loft repurposed as an open work space. 

“It was a dead building for 25 years,” Audible’s founder and CEO Don Katz said. In many ways, he said, the historic church is symbolic of the “deprivation and decline in Newark” and its recent resurgence.

Audible is one of the city’s anchor institutions and relocated its headquarters to Newark in 2007. Since then, the digital audiobook seller has grown from 100 employees to more than 1,500. 

“The Innovation Cathedral, its history and future as a house filled with meaningful work at the cutting edge of technology and culture is, for me, a metaphor for the way we at Audible have worked really hard to define a core element of our strategic purpose, as a company around the comeback of this great American city,” Katz said. 

Posted in New Development, New Jersey Real Estate | 51 Comments

So absurd it needs to be reposted

Posted on May 16, 2019 by grim

From SportsTalk:

Paterson, NJ Developers Think An Arena Can Help Save A Struggling Shopping Mall

Sports as an economic generator in Paterson, NJ? 

It doesn’t appear that any sports league is looking to put a team in Paterson, New Jersey. But there is a proposal put forth by the owners of the financially struggling Center City Mall in the northern New Jersey city that calls for the construction of a 12,000 seat arena which presumably could house a minor league hockey or minor league basketball team along with an indoor football franchise and other arena fare and a hotel. The mall owners think by putting an arena and hotel near the mall, people would not only go to arena events but would shop at the mall. Center City Partners think it will cost $100 million to build an arena, a hotel and a parking garage. But the mall owners don’t want to foot the entire bill. Instead, the ownership filed papers with the New Jersey Economic Development Agency seeking $40 million dollars of tax credits. The state is giving city of Paterson $130 million worth of tax credits to help spur the local economy. Paterson is New Jersey’s third biggest city and once was an economic powerhouse with a silk industry leading the way but by the 1960s, Paterson fell into a steep decline.

Paterson was once the home of the Negro League baseball New York Black Yankees. The team played at Hinchliffe Stadium. That ballpark could also be revitalized as part of the Paterson tax credit plan. The stadium has been closed since 1997. There is a proposal on the table to reopen the park using some of the tax credits which would allow the venue that opened up in 1932 to host soccer, football and track and field events. It is unlikely that Paterson could get a minor league baseball team or have high school teams use the park as the planned renovations do not include a full sized baseball field.

Posted in Economics, New Development, New Jersey Real Estate, Politics | 99 Comments

What’s driving gross income tax increases?

Posted on May 15, 2019 by grim

From the Star Ledger:

N.J. income taxes rolling in like never before. Now Dems will fight over what to do with all that extra cash. 

New Jersey’s income tax collections came roaring back in April, surprising state leaders and cracking open a debate over how the state should spend its extra cash.

The mid-year recovery led Gov. Phil Murphy’s administration to announce Tuesday it is boosting its revenue forecast for the state budget year that ends June 30 by $377 million and plans to deposit all but $60 million of that money into a depleted “rainy day” fund to cushion the blow of a future downturn.

But the state Legislature may have other plans.

Democratic state Senate Budget Chairman Paul Sarlo, D-Bergen, and Sen. Declan O’Scanlon, R-Monmouth, signaled interest Tuesday in rerouting the $317 million destined for the rainy day fund to next year’s state budget, where it can replace some of the revenue Murphy’s administration wants to collect from a tax increase on millionaires.

The surprise cash alters — but doesn’t resolve — the clash between the governor, who wants to put it in savings, and legislative leaders, who are looking for alternatives to Murphy’s push for a millionaires tax.

Sarlo said Tuesday the two-year revenue updates from the state Department of Treasury bolster legislative leaders’ position.

“The pressure to do a millionaires tax is gone,” Sarlo said after a Senate budget committee hearing. “The pressure of balancing the budget, that pressure is off. We don’t need that any longer to balance the budget.”

…

The state collected $3.6 billion in income taxes in April, confirming the Treasury Department’s suspicions the slowdown in the tax’s revenue was caused by high earners responding to the new $10,000 cap on state and local tax deductions by delaying their estimated tax payments until closer to the April filing deadline.

…

“While we correctly anticipated the taxpayer behavior that played out, we not only met our robust April tax collection targets, but we encountered somewhat of a surprise when Gross Income Tax collections set a new April record,” Muoio said.

…

“With the current surge in the (Gross Income Tax) outlook, the governor is proposing to take advantage of this good fortune by returning $250 million of this revenue directly back to the taxpayers in the form of property tax relief in FY20,” Muoio said.

“But without the half a billion dollars generated by the true millionaires tax, the (Gross Income Tax) revenue boost will be eliminated, and funding for increased property tax relief and other priorities will be nearly impossible.”

Posted in Economics, Employment, Politics, Property Taxes | 63 Comments

Policy has repercussions

Posted on May 14, 2019 by grim

From ROI-NJ:

GSI forum offers some ‘uncomfortable truths’ of doing business in N.J.

State Sen. Declan O’Scanlon was measured in his tone but precise in his words.

Speaking at Garden State Initiative’s second annual Economic Policy Forum on Thursday in New Brunswick, O’Scanlon (R-Holmdel) put the shortcomings of the state’s economy on the actions of government officials.

“The worst thing a state can do — which is the playbook New Jersey seems to follow at times — is to go out and act as if you actually care about what businesses say and what they need, and then do the exact opposite,” he said. “We’ve done that for a long time.”

O’Scanlon, who has served in the Legislature since 2008, said growing the economy is a numbers game — and one the state currently is losing.

“The rhetoric that comes out of the front office ignores mathematics,” he said. “There is a limit to how much we can increase the cost on the people who create the jobs here until they go away. And they’ve already started to go away.

“It’s a thing that we deny: Our tax policy and our regulation policies have a real impact on what people do.”

From Commercial Appeal:

Pandrol USA to open North American headquarters in Memphis

Railroad company Pandrol USA plans to open a North American global headquarters in Memphis, incentive documents show.

The new headquarters planned for 611 Winchester Road would bring 73 jobs to Memphis. The workers will be paid an average wage of $49,453 annually, the company said in an application for a Community Builder payment-in-lieu-of-taxes (PILOT) incentive submitted to the Economic Development Growth Engine for Memphis and Shelby County.

The EDGE board will vote on whether to approve the incentive at a public meeting at 3 p.m. Wednesday at the Better Business Bureau office on Tyndale Drive in East Memphis.

Pandrol has no presence in Shelby County. Workers at the new facility will manufacture railroad fastening products, the PILOT application said. The new headquarters is expected to cost the company nearly $9.3 million.

…

The company has requested a 15-year PILOT incentive. That would save the company about 75% of its tax obligation for the lifetime of the incentive. That represents more than $1.5 million in savings, according to EDGE documents.

Pandrol is a global company with offices in several countries, including France, China and Russia. The main office in America is in New Jersey, according to the company website. It is not clear if that office will remain open after a Memphis headquarters is established. 

Posted in Economics, Employment, New Development, New Jersey Real Estate, Politics | 52 Comments

Overhauled? Shut it down.

Posted on May 13, 2019 by grim

From the Star Ledger:

The EDA gave tax breaks to a predatory lender, group says. That’s why the state agency needs to be overhauled.

Last week, corporate whistleblower Kerrie-Ann Murray testified that her former employer falsified payroll paperwork to facilitate a move to New Jersey and obtain $16.8 million in tax credits from our state Economic Development Authority. The company, Jersey City-based World Business Lenders, then laid off an entire department after selling that tax credit to a third party.

Murray’s testimony is yet another example of the level of waste and corruption involving EDA’s corporate tax incentive program. What’s even more troubling was that the EDA considered an application from World Business Lenders at all.

At first glance, this seems the kind of company you want to persuade with tax incentives to do business in New Jersey. World Business Lenders claims to be a non-bank lender dedicated to serving the needs of small business owners, in particular minority-owned main street businesses unable to obtain credit or loans from banks.

But a close examination of the company history, and Kerrie-Ann Murray’s testimony, shows it’s the worst kind of subprime predatory lender, preying on vulnerable business owners who need quick access to capital. World Business Lenders makes profits off bad credit, defaulted loans, and the misery of bankruptcy. It’s the kind of company that destroys small businesses and local economies.

Company founder Doug Naidus made his fortune by selling a mortgage company to Deutsche Bank, a financial outfit responsible for servicing and foreclosing on many of the subprime loans that fueled the world financial crisis. Since then, Naidus has perfected a new kind of predatory lending — this time targeting small business owners. As a non-bank lender his company is subject to less regulatory oversight than banks, and that’s reflected in its business practices.

World Business Lenders charges interest rates as high as 125 percent, with daily loan repayments sometimes running to more than $160 per day for small business owners. Borrowers have put up cars, houses or even livestock as loan collateral. When unable to pay, the company has seized these assets, forcing bankruptcies and ruining lives. “They’re in the business of helping these businesses fail,” said Mark Pinsky, former president of Opportunity Finance Network, a national association of community development financial institutions. Nadius himself once joked that he could save his company money by paying salesmen in repossessed Pontiacs.

Posted in Economics, Employment, New Jersey Real Estate, Politics | 48 Comments

Where prices are going up in NJ. It’s not where you think.

Posted on May 10, 2019 by grim

From the Star Ledger:

The town in each county where home values are increasing most 

Get these homes while they’re hot — and in some cases — still cheap.

We’ve looked at the hottest markets in New Jersey — the places that are hitting their peak price right now. But if you’re looking for a home, you might be hunting for a bargain town near you that’s going to gain in value. Where else to start than the places that have boomed in this past year?

These real estate markets showed the greatest increase in their counties, according to Zillow data. Since there’s so much regional variation in housing markets, some of the hottest markets in a county seem pretty weak. But some are exploding in home prices. Either way, if you’re hunting for a home in your county, you might want to snatch these places up.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 121 Comments

Grass is greener, taxes are lower

Posted on May 9, 2019 by grim

From Fox Business:

Florida-based ‘Unhappy New Yorkers’ campaign targets fed-up taxpayers

Tens of thousands of New Yorkers are leaving the high-tax state and moving to Florida, a trend local real estate developers are looking to capitalize on.

Armando Codina, executive chairman of Miami real estate development firm Codina Partners, helped launch a campaign called “Unhappy New Yorkers,” aiming to attract those “fed up” with taxes and other conditions in the state.

Data from the U.S. Census Bureau showed that while Florida received more movers than any other state last year, New York’s outflows to the Sunshine State were the highest – 63,772 people. New York had the third-largest outflows of any state, with 452,580 people moving out within the past year.

The Unhappy New Yorkers campaign launched around April 15, which Armando called “an awakening day” for people who might be upset about their tax bills – thanks in part to the $10,000 cap on state and local tax deductions enacted as part of the Tax Cuts and Jobs Act. New York was found to have the highest overall state tax burden, according to a recent WalletHub study.

Florida, on the other hand, has no state income tax.

Armando said in addition to tax issues, a new pattern among millennials favoring warmer climates, job portability and the perception of an anti-business climate – bolstered by Amazon’s decision to scrap plans for its Queens HQ2 – has helped contribute to population loss in New York – to Florida’s benefit. He said he has “absolutely” seen an uptick in moves following the SALT changes.

The campaign’s website asks whether visitors are unhappy New Yorkers due to “high taxes,” “rotten weather,” and the “outrageous cost of living.” It also has a section dedicated to “total savings” for people moving to Florida, reportedly at $24,649 for someone with an income of $100,000; $49,509 for someone with an income of $200,000 and $235,197 for people with incomes of $1 million. It is unclear what metrics were factored into those calculations.

New York’s Democratic Gov. Andrew Cuomo has said he expects the cap on state and local tax deductions to have a negative impact on the state’s population – and tax receipts. He blamed a $2.3 billion budget deficit on the new tax law, calling the state’s financial situation “as serious as a heart attack” as wealthy residents leave.

Armando noted that because of falling tax revenues, the tax situation is only likely to get worse for New York residents.

Posted in Demographics, Economics, National Real Estate | 108 Comments

How In Living Color predicted the future.

Posted on May 8, 2019 by grim

From CNBC:

How the hustle and gig economy is choking the middle class

For Emmanus Stephen, an Uber driver from Asbury Park, New Jersey, earning enough to pay the bills means strategizing carefully about where he will work each day.

Local, short-distance rides near his home on the Jersey Shore are convenient for him, but they don’t pay well — “You drive all day and you can make $100,” says the father of six.

So to pay the bills, he’ll often drive the 45 miles to Newark Liberty International Airport, where he can shuttle travelers on longer distance, more lucrative trips. He works all night to beat the New Jersey traffic, then heads home at 4 a.m., dropping his children off at school before getting some shuteye.

With Uber preparing for an IPO, the issue of whether gig economy workers like Stephen can earn a living wage is likely to reemerge. For publicly traded companies, the issue of social impact is a growing issue.

Many gig economy workers are part-timers doing freelance work on the side, to supplement paychecks from full-time jobs. There are 15.8-million independent workers who are full-timers, according to The State of Independence in America 2018 report by MBO Partners, which studies the freelance economy.

Posted in Demographics, Economics, National Real Estate | 102 Comments

Welcome Home

Posted on May 7, 2019 by grim

From the Star Ledger:

These 2 N.J. suburbs are among most affordable ‘you’d like to live in’ outside of major cities

One of the desirable traits of living in New Jersey is much of the state’s proximity to a major city, yet it can still be pricey to live on the outskirts of a major metropolitan region.

But according to new Realtor.com research, there are actually affordable suburbs with low crime rates and reasonable commutes in the Garden State “that you’d like to live in.”

The website identified Hillside in Union County and Gloucester City in Camden County as two of the most affordable suburbs in the country that are located outside of major U.S. cities.

While it may not have the same name value as popular suburbs like Montclair or West Orange, Hillside is located an hour from Midtown Manhattan and is considerably cheaper, with a median listing price of $272,000, according to Realtor.com

“That’s why more people are looking at Hillside, which lacks a quaint city center but still has an urban feel with street blocks lined with unique older homes,” the website says.

In South Jersey, Realtor.com notes that there is an abundance of affordable suburban options outside of Philadelphia, but found Gloucester City, where the median listing price is $86,700, as the most affordable option.

…

Realtor.com does make it clear that these two New Jersey towns are lacking some of the attributes many look for in a suburb outside a city. In Hillside, the school system is rated lower than other nearby suburban towns, while the Union County township also lacks fine dining options, according to the website.

And in Gloucester City, one of the reasons listing prices are so low is “due to the surplus of vacant homes or places that need some serious work.”

Posted in Demographics, Economics, New Jersey Real Estate | 66 Comments

Brains win.

Posted on May 4, 2019 by grim

From Citylab:

The Geography of Brain Drain in America

Perhaps the biggest problem afflicting America is its widening geographic divide between the winners and losers of the knowledge economy. A raft of studies has documented the growing divergence between places based on their ability to attract, retain, and cluster highly educated and skilled workers and to develop high-tech startup companies.

Talented and skilled Americans are the most likely to move by far. While the overall rate of mobility among Americans has declined over the past decade or so, still, between one-quarter and one-third of U.S. adults have moved within the previous five years, a higher rate of mobility than just about any other country on the globe. But behind this lies a tale of two migrations: the skilled and educated “mobile” on the one hand and the less educated “stuck” on the other.

One consequence of this is that states as different as Ohio and Hawaiihave been considering initiatives to stem brain drain and hold onto their own talent. In fact, such policies date back at least to the late 1990s. Back in 1999, when I lived in Pittsburgh, economic-development officials there came up with the idea of “Border Guard Bob,” a uniformed sentinel who would patrol the region’s borders to convince talented local grads to stay—an initiative that quickly became the butt of jokes and was scuttled.

Now, a new report from the Social Capital Project of the Joint Economic Committee of the U.S. Congress takes a close look at the reality of brain drain across the 50 states. The report uses U.S. Census data from 1940 to 2017, and focuses on highly educated people in their post-college and post-graduate-school years—people between the ages of 31 and 40 who are either “movers” or “leavers,” heading off to different states, or “stayers” who continue to live in their home state.

…

The fourth map (above) shows the change in net brain drain since 1970. Among the states that experienced big increases in net brain drain were some in the Midwest and Plains (Iowa and the Dakotas), and particularly a swath of the Southern Sunbelt. Better performers, or states that decreased net brain drain, included New York, New Jersey, Illinois, Washington, and Massachusetts. Ohio and Michigan did well on this measure, meaning they improved from being the states with the highest net brain drain back in 1970.

Bringing it all together, the best performers over the past three-quarters of a century are the states along the Boston–New York–D.C. corridor; on the West Coast; and Illinois, Texas, Colorado, Arizona, and Hawaii. States fared the worst, experiencing more brain drain, in parts of the Midwest, the Great Plains, New England, the Southeast, and especially the Deep South.

The geographic winners have only seen their advantages grow since 1970. This split geography of brain gain and brain drain poses huge implications not only for our economy, but also for American society and politics. “Brain drain has significant consequences—economic, yes, but also political and cultural,” the report notes. “By increasing social segregation, it limits opportunities for disparate groups to connect. And by siphoning a source of economic innovation from emptying communities, brain drain can also lead to crumbling institutions of civil society. As those natives who have more resources leave, those left behind may struggle to support churches, police athletic leagues, parent-teacher associations, and local businesses.”

Posted in Demographics, Economics, Employment | 45 Comments