Rick Haglund: People aren’t moving from Michigan — but that’s not the good news you might think

October 5, 2019 7:25 am

People skate in the rink at Campus Martius park in downtown Detroit | iStockphoto

Michigan’s auto industry was built, in part, on the backs of hundreds of thousands of poor workers from the South who moved here in search of good jobs and better lives.

Detroit’s population swelled by some 400,000 residents between 1930 and the early 1950s, as people from the South and other countries moved to the Motor City.

During the boom years of World War II, and the late 1940s, “migration to the city took on a southern accent as poor whites from the upper South joined a new wave of black migrants from the deep South in making Detroit their home,” wrote historian Thomas Sugrue.

So many people from rural Kentucky relocated to the Ypsilanti area, where General Motors and Ford operated large factories, that the city took on the nickname “Ypsitucky.”

Similar scenarios played out around the country. America has long been a place where people have forsaken friends and family in search of better jobs and higher pay.

But no more. In a remarkable development, Americans are staying put.

And that calls for a new approach to economic development that shifts more resources to distressed places that residents can’t or won’t leave, argues Upjohn Institute for Employment Research senior economist Tim Bartik in a recent research paper.

“[T]he current state and local competition to lure businesses does not help distressed places, as booming areas offer tax incentives at least as large as those offered by distressed places,” Bartik said.

Michigan has plenty of the latter.

Many of the state’s cities — including Flint, Saginaw, Pontiac and Benton Harbor — have never recovered from the huge loss of manufacturing jobs over the past four decades.

Although its downtown and Midtown areas are in the midst of an impressive revitalization, Detroit remains the nation’s poorest major city.

And much of rural Michigan, like that in the rest of the country, is depressed.

It’s unlikely that those places will be revitalized anytime soon by flocks of newcomers.

Just 9.8% of American changed residences in 2018, the lowest level since the Census Bureau started tracking mobility in 1948. The percentage of people moving in a single year has fallen by half since 1985.

Many economists say that’s bad news because low mobility hurts innovation and overall economic growth if workers can’t or won’t move to more productive places.

And by “locking people into place, it exacerbates inequality by limiting the economic opportunities for workers,” said urban studies expert Richard Florida.

It’s not exactly clear why more people are staying home. The lingering effects of the Great Recession, high student debt and unaffordable housing are among reasons cited by experts.

But an intriguing study earlier this year by the New York Federal Reserve Bank suggests changes in “cultural values and norms” may be playing a major role in the decline of mobility.

Almost half of 1,300 people surveyed by the New York Fed said they were “rooted.” In other words, they were connected to their communities and weren’t willing to move for more money.

Fifteen percent said they were “stuck,” meaning they lacked the resources or ability to move. Just 38% said they had the resources and inclination to relocate.

Michigan’s population is the second-most static in the country, behind Louisiana, according to Census data analyzed by demographer Kurt Metzger. More than three-quarters — 76.2% — of Michigan residents were born here.

Almost as many Michigan millennial residents age 25 to 34 — 74.3% — are natives.

Michigan mobility chart | Kurt Metzger

That indicates we’re retaining a high percentage of young people, but Metzger said the figure also shows Michigan is not attracting enough new workers to offset a rapidly aging state population.

“While recent data show us doing better at retaining young homegrown talent, we will never rise without a much, much better attraction strategy and results,” Metzger said in a public Facebook post.

But Bartik contends that economic development incentives should be aimed at providing more jobs to people already living in those communities. 

Currently only about 20% of jobs created nationwide by incentives go to residents of communities benefiting from incentives, his study shows. That figure rises to about 33% for incentives targeted at distressed communities with high unemployment.

Overall, incentives aren’t particularly effective in luring people to communities trying to add jobs at a time when people have become more attached to their communities.

“Even sizable moving subsidies, of $10,000 or more, lead only a tiny fraction of residents to relocate,” Bartik said.

A more effective economic development strategy would include offering business consulting services to local companies, providing better job training and improving the roads, his study says. (Are you listening, Lansing?)

The result is likely to be more and better jobs for local residents, which could reduce a variety of social ills, including crime, poverty and family breakdowns.

Yes, Michigan also needs to attract more young workers to maintain a vibrant economy. But that’s unlikely to happen unless its communities become better places for those already living there.

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Rick Haglund
Rick Haglund

Rick Haglund writes the "Micheconomy" column for the Michigan Advance. He's a former reporter and business columnist for Booth Newspapers, now the MLive Media Group, with extensive experience covering Michigan’s economy and the auto industry. He now works as a freelance writer based in Southeast Michigan.