ORLANDO, Fla. — New data from the Census Bureau, released in early September, provided additional insight into migration patterns through 2023. Trends that began during the pandemic have continued, though at a less dramatic clip, with Florida cumulatively being the No. 1 net recipient of domestic migration from 2020 through 2023.
The latest data reveals in 2022-2023 Texas took the No. 1 spot with net migration (total move ins minus move outs) at 149,100 people. Florida wasn’t too far behind with 131,483. Still, considering the lead Florida had during the pandemic, currently the Sunshine State has added over 100,000 more people than Texas since 2020.
Looking at the longer-term trend that began in 2020, the top five states in terms of total net migration have been Florida, Texas, North Carolina, Arizona and South Carolina. The top five states that have had negative net migration are California, New York, Illinois, New Jersey and Massachusetts.
The states losing population contain many of the traditional coastal employment hubs that have been major spots of population and employment growth over the last several decades. However, cost of living in these areas has soared as a more educated working population continued to concentrate there, and competition for top talent often led to increasing compensation packages. Higher wages to help offset higher living costs also contributed. Still, for many looking for top employment opportunities, the trade-off made sense as proximity to employment nodes ensured access to potentially well-paying jobs and career advancement.
However, for some people, the calculus changed during the pandemic when the necessity to be proximate to employers waned. This allowed people to make other choices, often prioritizing quality of life amenities over coastal city life. These trade-offs often came with lower costs of living, appealing to those who were weary of paying high prices for less than amazing real estate.
Much ink has been spilled over this topic already with experts pontificating on the myriad of reasons as to why these cities and states have partly lost their appeal, particularly within certain key demographics. More recently, much has also been made about how the career growth prospects of remote workers may be limited if they are not back in these core markets. Whatever the reasons are as to why people left and if they are coming back, the simple truth is these are becoming notable trends.
Earnings growth helps explain migration patterns
Solving the “why” behind people leaving these states is something experts will try to do for a while. While there is no one reason, one thing we did look at when considering the “why behind the what” is earnings, specifically the growth during this same time. One thing to note about earnings – it’s different from income, which includes passive income from retirement savings or investments, whereas earnings is from an employer. We focused on earnings over income to focus on the workers rather than retirees or the independently wealthy, as employment and earnings tell us more about a larger portion of the population.
Any cost-of-living calculator will tell you that living in these out-migration states will require a much higher salary for many places in the in-migration states to have a similar standard of living. For example, someone relocating from Orlando to San Jose, Calif., would need a salary approximately 80% higher than what they are currently earning. The cost of housing is a driving difference in living costs, which is nearly three times as expensive in San Jose, along with other higher costs including gas and food. This higher cost of living is baked into the compensation levels typical of the area, but earning growth tends to be slower since these salaries are already very high.
We looked at the earnings growth from 2020-2023 and calculated the percentage change between 2020 and 2023, focusing on our top in and out migration states. What we found is that the top in-migration states saw an overall higher percentage growth in earnings during this time, with the out-migration states still seeing growth, but not as strong.
As previously discussed, earned income in many of these out-migration states were already relatively high, meaning they didn’t have as much room to grow as states that had a lower starting point. Still, when considering cost of living in these places, the increases seen in the in-migration states would likely go further than the more moderate increases in already expensive locales.
Why it matters
It was one thing for Florida to be the top recipient of people migrating during the pandemic. It’s certainly another for that trend to continue, even at a slower pace in the years since. Florida has been growing in population and popularity, and a diversifying and maturing economy is reflected in what people can earn here.
Jennifer Warner is an economist and Director of Economic Development
© 2024 Florida Realtors®
