The IRS published it annual internal migration data last week, and it shows a massive exodus continues through 2022 the big three blue-trifecta states. California ranked, again, as the biggest income loser, along with New York and Illinois. The exodus diminished in 2022 relative to 2021, but remains well above pre-pandemic levels set in 2019. California lost nearly three times as much income in 2022 to other states as it did in 2019. New York lost 50% more than it did in 2019. And New Jersey’s net income loss hit a record in 2022 (largely owing to fewer New Yorkers moving across the Hudson River). On the other hand, Florida gained about twice as much income in 2022 from other states as it did in 2019, while Texas’s income haul surged by more than 150%. All of the top gainers are red-state trifectas, except NC has a pro-business Dem governor. Employment in California, New York and Illinois STILL hasn’t recovered to pre-pandemic levels, and may never do so. California has about 400,557 fewer workers than in January 2020 while Florida boasts 669,806 more. LOSERS: 1) CA - ($23.8 billion) 2) NY - ($14.2 billion) 3) IL - ($9.8 billion) 4) NJ - ($5.3 billion) 5) Mass - ($3.9 billion) GAINERS: 1) Florida: +$36 billion 2) Texas: +$10.1 billion 3) South Carolina: +$4.8 billion 4) Tennessee: +$4.7 billion 5) North Carolina: +$4.6 billion https://lnkd.in/gUpRUMQb Dave McClure Stephanie M. Shorter, PhD Amit Gupta Marvin Liao Chris Neumann Arjun Dev Arora Eric Jackson Ken Miller Rutvij Thakkar Don Fotsch Leigh Gui, CFA Justin Donald Jeremy Johnson Michael Corcelli R Stewart (Randy) Thompson
Growth vs stagnation the name of the game. I do not see it changing back any time soon. What about you? Wasn’t alive in the early 70s but think that it has to reach this level of desperation to right itself
Thanks again for sharing, Aman! Very insightful. Also, I have a strong feeling- based on data I keep seeing and reading - that similar patterns could be found for a number of (left) European federal/city states like Berlin, for example. Also, what strikes me is that this data is not that hard to read. Of course, not every mayor has the intellect of Aman, but it does not take more than basic math to understand that there is a massive, structural problem for NY, CA etc. If you want to continue to be lavish with gifts and social programs- independent of them making any sense at all - you need income and hence taxes and that means rich people and a lot of small, medium and large businesses. Why are left governments so insanely stupid in those states? is it their internal divisions? And yes, there are issues in those red states, too.
How will the demographic changes affect CA’s position? An urbanist that I follow and who has no love lost for TX found some of the most dynamic (housing with lowest tenured ownership in place) in Seattle and the big TX and FL cities. CA owners are “dug in like ticks” and not going anywhere. What happens in CA if it starts aging faster than TX and FL? 15 - 20 years from now?
As people go, so goes their money.
Great insights here! Thanks for sharing.
What’s the sum of the economies of the losers vs the gainers? The losers are an order of magnitude bigger. The blue states are the most dynamic anywhere in the world despite some transient issues. Already the AI revolution is so big and strong in the Bay Area, that this will get back bigger and better. The ecosystem of the blue states in terms of capital, research, innovation, populations, academia simply dwarfs the small states cited above. And it’s been several decades coming.