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There’s a chart that comes up in State Demographer Susan Brower’s presentations about Minnesota’s population that always raises a lot of questions.
Can you spot what’s wrong with this picture?
The chart shows net migration to Minnesota — that is, people moving to the state minus people moving out of the state — for two groups. The first group, migrants to Minnesota from other countries, has shown steady gains since the 90s, with the number of immigrants even increasing since the turn of the century.
The story is far different for the second group, migrants from within the United States. In the ’90s, Minnesota was a net gainer of domestic migrants, meaning more people moved here from other states than moved away. Around 2002, that trend reversed, and since then, Minnesota has consistently sent more citizens to other states than it has attracted from them.
What explains the change?
Where Minnesotans are going
To get a clearer idea of what’s going on, it helps to know which states Minnesotans are moving to. Data from the Internal Revenue Service gives a granular picture of the number of households coming and going from Minnesota to other states each year, based on tax returns.
Much of Minnesota’s comings and goings have been from states with which it shares a border, namely Wisconsin, Iowa, North Dakota and South Dakota.
When you combine net migration from these states, Minnesota has pretty consistently gained migrants, overall.
But those gains were much higher in the ’90s and significantly reduced since 2002, and they were too small to offset Minnesota’s losses to other states in and out of the region.
What happened?
When you break it down by state, there’s been net in-migration from neighboring Wisconsin and Iowa, most years, excepting a negative shift to Wisconsin for a few years in the early 2000s. Over time, net migration from Iowa — though still positive — slowed.
Around that time, data show a net loss of households to North and South Dakota that coincides with the Bakken oil boom and major growth in South Dakota cities.
That makes sense: at the height of the oil boom, people were moving from all over the country for high-paying oil jobs, and North Dakota’s population growth led the nation.
“Migration was really picking up out there, and then in the most recent data I looked at on the Bakken, it was starting to decline,” said Jack DeWaard, assistant professor of sociology at the University of Minnesota. He and research assistant Jeronimo Lopez have beens studying data on inflows and outflows, using IRS records.
That decline in migration to North Dakota is consistent with a dropoff in the number of oil rigs parked near the Bakken, a dropoff in the price of oil and technology making it more efficient to drill for oil, which means companies require fewer jobs, he said.
Heading for sunnier climes
While migration to Minnesota from its neighbors declined overall in the 2000s, it still stayed slightly positive. What really helped drive Minnesota’s net domestic migration into negative territory, data show, was an uptick in the number of Minnesotans moving to Sunbelt states, especially Texas, Florida and California.
In the case of California, Minnesota’s net losses coincide with the start of the dot-com boom, around 1995. Between 1996 — the first year Minnesota saw a net loss of households to California — and 2015, a net 560 households have moved, on average, each year from Minnesota to California, IRS data show.
Florida has long been a big attraction for Minnesotans, but its appeal appears to have increased after 2002. Between 1990 and 2001, Florida saw a net gain of 540 households from Minnesota each year, on average. Each year between 2002 and 2015, it gained an average 990 Minnesota households, even considering a dip in migration during the recession.
The Lone Star State, meanwhile, has seen a clear uptick in net migration from Minnesota. From 1990 to 2001, Minnesota lost a net 50 households to Texas, on average, each year. From 2002 to 2015, that number was up to 700 net households each year, on average.
Though it’s definitely not in the Sunbelt, Washington state has also seen an increase in net household gains from Minnesota that increased over time, though to a lesser degree. Out-migration to other mountain west states, like Colorado and Oregon, has been more consistent over time.
What do these places have that Minnesota doesn’t?
Amenities, jobs
Sunshine, for one. Though there’s disagreement over how much amenities matter, they’re difficult to measure, and people’s preferences for them vary, many researchers who study migration have found that amenities — warm weather, proximity to lakes, rivers and oceans, and other lifestyle factors play a role in people’s migration choices. And researchers say they help explain long-term migration patterns from the Snowbelt to the Sunbelt, which became a more palatable destination for many when air conditioning became widespread following World War II.
“Growth patterns have been very consistent with amenity-led migration to places endowed with high levels of natural amenities such as nice climates, pleasant landscapes, lakes/oceans and mountains, writes Mark Partridge, a professor of rural-urban policy at Ohio State University in a 2010 paper. “Amenity migration has led to a fundamental transformation of American geography.”
But sunshine’s not the only thing these states have going for them.
The states with the most net in-migration from Minnesotans also have in common hot economies — especially in recent years.
That’s not to say Minnesota’s is bad. Minnesota didn’t fare as poorly as the country as a whole during the recession, and it recovered faster.
The dream of the ’90s
Up to this point, we’ve been looking at data from the 2000s to see what changed to try to understand why net migration to Minnesota dropped relative to the 1990s. But there’s another possibility here: that the high net domestic migration of the ’90s was an aberration.
Good economics conditions may help explain why Minnesota was such a big importer of people from other states in the ‘90s. “In the ‘90s, the economy of Minnesota outpaced, outperformed on a number of different indicators, the rest of the U.S.’,” Brower said.
The good times couldn’t last forever, though. “The recession of the early 2000s likely shifted relative opportunities in the U.S. and this would (have) halted migration patterns that Minnesota experienced in the 1990s,” Brower wrote in an email.
Despite Minnesota’s recession recovery, it didn’t see the level of post-recession growth some states did. A report by the Pew Charitable Trust’s Stateline that tracked job growth in states from the height of the recession to March 2015 found states that drew population from Minnesota saw some of the fastest post-recession employment growth: while Minnesota’s employment grew 8.5 percent, North Dakota’s grew 28.9 percent; Texas’ grew 15.1 percent; California: 13.2 percent; Florida: 12.6 percent, and Washington: 11.6 percent. Most of the people who leave Minnesota each year are young people leaving for college or in the early stages of their careers.
Gross domestic product for these states have grown at faster rates than Minnesota’s, too, according to data from the St. Louis Federal Reserve Bank.
Apparently, Minnesotans weren’t the only ones who noticed. The pattern of “Snowbelt” residents from the Northeast and Midwest moving to Sunbelt states is well established. It slowed down during the recession, but has picked up again in recent years, driven by lower costs of living, and booming job market growth.
All of these states, with the exception of California (which has a booming tech industry pulling people in and high housing prices pushing people out), have net positive domestic migration.
Why it matters
There could be other factors at play, but mostly, Minnesota’s migration patterns seem to be in line with the rest of the Midwest’s (besides the Dakotas with their economic booms) in recent years: it seems the net migration loss has to do with people leaving for sunny skies and good economies.
In fact, every Midwestern state besides North Dakota and South Dakota have been net domestic migration losers in recent years:
| State | International | Domestic | Total |
|---|---|---|---|
| North Dakota | 5,500 | 43,300 | 48,900 |
| Minnesota | 56,200 | -25,200 | 31,100 |
| South Dakota | 6,000 | 12,100 | 18,000 |
| Iowa | 21,400 | -4,600 | 16,900 |
| Nebraska | 15,500 | -5,400 | 10,000 |
| Indiana | 42,000 | -33,600 | 8,400 |
| Missouri | 35,500 | -43,500 | -8,000 |
| Wisconsin | 26,100 | -37,400 | -11,300 |
| Kansas | 24,900 | -40,200 | -15,300 |
| Ohio | 71,100 | -122,000 | -51,000 |
| Michigan | 80,500 | -153,200 | -72,700 |
| Illinois | 128,800 | -319,000 | -190,100 |
Why and where Minnesotans are going are questions researchers are keeping an eye on: after all, it’s not just for scorekeeping purposes that all of this matters.
Minnesota’s population growth is expected to slow in the coming decades as baby boomers age and the birth rate is projected to continue to be slow. In fact, forecasters believe the only way for Minnesota to have sufficient people for the jobs that are projected to exist is by importing them, both domestically and from abroad.
What these data can’t tell us now is how many Minnesotans move away and then boomerang back — or whether Millennials from Minnesota will come back once they have families of their own.
But if that’s to happen, the state may need to win them back.
“Minnesota is entering a new demographic era, where migration’s relative influence on our total population will rise. According to our projections, by the early 2040s, if our state is to experience any population growth at all, it will necessarily be from migration,” a 2015 report from the State Demographic Center says. “Minnesota leaders should work to stem and reverse domestic losses, redouble efforts to attract and integrate new residents, especially young adults, and seek to retain its current resident population.”
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Delusional
You really have to ask? How’s that Minnnesota Nice working out for ya? One of the same reasons Nestles and Toyota and other major companies are leaving the socialist state of Calle-fornia.
Compared to our neighbors to the east
Evidently our Minnesota Nice is pretty sought-after by those leaving the Scott Walker-led neighbor to the east.
Nice
Is Minnesota becoming the Safe Space for offended cheese heads?
I’m losing 25% of my workforce to retirement in the next five years. I’ll take every qualified cheesehead I can get.
RE: Delusional
Always amusing to see someone cite a few anecdotes to confirm their worldview when the overall data refutes it. California created 400,000 jobs in 2016, and is still by far the national leader in manufacturing output and manufacturing jobs, both of which are growing. Meanwhile, Nestle said they moved their HQ to Virginia to be closer to customers and suppliers, and Toyota moved its HQ to Dallas because employees complained about the cost of housing in LA, which is a function of that fact that everyone wants to lives here and the population (+ 2 million since 2010) grows faster than the housing supply. I see from your profile you’re from San Diego. If California is such a socialist hellhole, why are you still here?
Explanation
One word: Family. Otherwise I’d be outta here in a New York minute, like about at least a third of my acquaintances have done.
I’d like to see more detail
The basic information available here is interesting, but really doesn’t help explain the reasons behind the migration without more data. I’d like to see the specific on where people are leaving the state:
– Wealthy, middle-aged Minnesotans primarily leaving from the cities and suburbs might support the conservative talking-point that taxes are a major factor.
– If the decline is primarily among older, retired Minnesotans, it might just be a demographic blip as aging Baby Boomers leave for their new post-work homes in Sun Belt states (and which wouldn’t really presage any serious drop in the state’s economy, since retirees on fixed incomes aren’t driving a lot of economic activity outside their specific niches).
– If the decline is primarily among younger, rural Minnesotans, it speaks to a general loss of economic opportunity in rural areas, especially if those folks are relocating to cities other than Midwest cities — it’s notable that cities like Nashville and Provo have seen significant increases in migration in recent years, and if those are coming from young rural folks looking both for economic opportunity and a less expensive lifestyle than in their original home states, it could speak to a lack of understanding of local economic opportunity.
Most likely the data will show a combination of all three trends, plus perhaps other trends not thought of here — the point is to discover if there is one trend overwhelming the others, and one which the state might be able to do something about with changes to policy. That would be worthwhile data to see and ponder over.
Second the request for more detail!
We need to see the places in Minnesota that are gaining population and those that are losing population. Town by town, if necessary. And any factor that distinguishes out-migration and in-migration by rural areas and urban centers. Are Minneapolis and St. Paul losing people to other states, or is that movement primarily from our rural areas?
The, too, we need to see what a “household” gained or lost is: Is it a one-person 20-something “household,” or a family of four or more? Is it two retirees who are moving to a sunnier clime because they don’t want to have to shovel snow, or is it not having to pay income taxes?
We also need to see from whence come our immigrants, and who they are. For example, there was a big domestic immigration in the 1990s from stresed-out black ghettos in paces like Chicago, Gary,, IN, and East St. Louis, etc. to the Twin Cities. Has that eased, especially when the “gap” that exists in Minnesota cities between achievement and well-being of black and white families has become known to be so bad? How much of our international immigration comes from this or that nation i Africa, or Asia, or Latin America?
These are constructive data, in any case. We’ll need to keep tabs on emigration and immigration as rising sea levels overtake southern Florida in the next 25 to 50 years and as other effects of global warming make our southern states not as attractive, and some of our southern cities’ air unfit to breathe and water supplies are dicey there, compared to what we’ll still have in Minnesota.
Decidedly declining amongst seniors!
Speaking from personal experience (and – potentially – action), given Minnesota’s penchant for burdening fixed-income seniors with excessive and exorbitant taxes (compare to most other states), it’s not at all surprising that seniors and retirees are departing.
Minnesota ranks among the WORST states (according to Kiplinger) when it comes to income tax on social security (and disability) income: The majority of other states either tax SSI/SSDI minimally or not at all, with several offering NO income tax on ANY retirement income whatsoever – regardless of the source, as well as reduced property taxes for seniors.
Given the fact that (despite the presence of medical industry giants like the Mayo Clinic) Minnesota’s medical expense and insurance costs far exceed those of most other states , as well as challenges posed by our climactic “challenges” (read that: long winters, and subsequently higher utility costs), it’s a wonder that ANYONE retires and remains here!
Explain
If you are referring the political climate, I need an explanation. Looking at the end chart, I see losses in mostly conservative controlled states.
Question the point that pop. growth is certainly good
This article seems to suggest that the priority in the state should absolutely be meeting the projected workforce needs of the future. Why can’t we think about a stable population and a growing quality of life? We can probably actually have a decreasing population and an improving quality of life! There is no need to bring more people into the state to soil our land, water, and air. Let’s think about trying to stabalize our population while improving our economy and education systems and everything about life in this great state! Please quit with the GROWTH ONLY mentality; you are making it impossible to consider other, maybe more beneficial, sustainable futures. Thank you.
Taxes on SS & pensions
Perhaps the simplest explanation is that MN is one of 13 states that tax SS and MN taxes pensions. Retirees living on fixed incomes need help from the MN Legislature!
Are You Suggesting
That we stop taxing social security retiree benefits? If so, would you lower spending, and if so specifically what spending? Or should I pay more taxes, even though I am raising 4 children (with one out the door and another nearly done with college)?
Keep in mind wage income has been falling for a few decades now.
Double taxation of SS
Our SS (FICA) contributions are on an after tax basis so SS is actually taxed twice in MN. It should be viewed like a ROTH IRA where retirement distributions are tax free.
BTW, SSI is not taxed so why would SS be taxed? It makes no sense to tax SS twice.
Perhaps
We could just reduce spending across the board. The last three biennium budgets have seen 8% increases in spending and our “unbound” Governor wants a 10% increase for his last two years. Maybe we can just hold the increase to 8% since, as you state, wage income continues to fall…
Not to mention the high state income taxes, estate taxes, etc. Why again would wealthy retirees keep MN as their State of residence? Especially since they can come back to enjoy the Summer…
Of course someone here will say good riddance to them if they do not want to pay for the State that treated them so well. All the while forgetting that they likely paid a lot of taxes while they lived here.
On a related note, hopefully someday folks here will grow to appreciate companies / employers, instead of trying to stick it to them…
Estate Tax Canard
Oh that old estate tax canard? Really? It applies beginning at $1.8M, and that will rise to $2M in 2018. So a married couple can give their offspring $4M in unearned wealth without any tax consequences as long as they can find a minimally competent lawyer. Not bad for folks who no doubt benefited from tax payer goodies like roads, bridges, sewers, publicly educated employees, plowed roads, finical support for college educations…
Now how many families does that apply to? Do you really expect us to take this seriously? That the estate tax is responsible for increased out migration from MN?
On the other hand, I’m surprised that someone opposed to the estate tax would not heed Frank Luntz’ long ago admonition to always refer to it as (cue horror movie music) “the DEATH TAX”. So a tip of the hat to Mr. Appelen for using the correct terminology.
Strangely
I am actually supportive of some form of a “capital gains capture” tax at the time of death. Everyone has to pay tax on capital gains, well that is except for dead people. It sounds like the cost basis just gets updated when it is transferred and the capital gains taxes are never collected. This is bad for a couple of reasons… It makes tax averse older people more hesitant to sell later in life. (ie concerned about robbing wealth from kids) Reduces tax revenues.
I just think that the Left has been marketing it wrong by calling it an estate tax. They should just insist that all taxes be set in order at time of death… And I sure don’t think MN should be doing it at the state level when most others don’t. Thankfully my folks moved across the border to SD so I will not need to worry about it. I am just making a point that if you want the wealthy to stay here and pay taxes, we need to be more similar to other states. Having an extremely progressive system works fine when people are working here, but having it when the baby boomers are retiring is another story.
That would be interesting
I would be interested in seeing an analysis that captures capital gain taxes upon death versus the revenue from the estate tax. I think the former could actually capture more revenue.
Settle Up
Agreed and I think it may be more understandable for many.
Just like settling up the tab at the end of a night.
Taxes matter to those who pay the most, it turns out…..
This study last spring says it all….and the missing $ Billions are going to add up…..
http://tcbmag.com/Industries/Politics-Public-Policy/Minnesota-s-Great-Wealth-Migration
Capital Gains tax treatment
MN treats capital gains as ordinary income without any discount for inflation or time value of money.
Perhaps if MN did not tax SS and treated capital gains like the federal gov’t or like other states more retirees would remain in MN. It appears as though MN does not value retired seniors.
Climate change is already making Minnesota more desirable, weather-wise, than it was even twenty years ago when I moved here. It’s estimated that by 2050, many parts of the south will be all but uninhabitable due to high temperatures and lack of water. Minnesota will be a choice destination for those looking for comfortable climate and top notch amenities.
Minnesota is not everyone’s first choice
For three reasons – for many people who grew up here, they want to test their wings and put some distance between themselves and their families. If you raise kids to be independent, be happy and pack your bags to visit. I did the same at their age. I decided to come back, they didn’t. When young, you go where the jobs are. Second, we brag and complain about how cold it is. Why would people who have a choice decide to freeze and bundle up if they enjoy doing things that require perfectly good weather? Third, we are progressive as in we tax to pay for great public services and continue to be a magnet for international immigrants, even those from warm places as that not speaking zenglush doesn’t freak us out. Conservatives find placed like Arizona, Texas and Florida more in keeping with their philosophy.
Migration is all about the freedom to pick out the best place for you. We are better off promoting our state to those like what we offer. Texas is as unique as Minnesota and let people live where they are most comfortable. Florida is great in early retirement, but many return when they need more in terms if support, because Florida falls far short of Minnesota in terms of healthcare. And those able to be snowbirds have the best of two places.
Migration in, and out.
I moved from Mn to Tx in 1984, back to Mn in 1989, back to Tx in 2003, retired in 2009 and moved back to Mn in 2011 (the summer of 2011 in Tx had 71 days in a row over 100…), so I am included in several of those charts. Taxes were never a factor in my moved back. While my state taxes are higher in Mn (Tx has no state income tax), the overall cost of living is a bit less (imagine your electric bill running AC 7×24 April-October), property taxes are quite a bit lower (Tx is one of the highest in the country). If taxes were an issue you wouldn’t see as many people moving to California. It would be nice to see a deeper dive on the statistics…I have to believe a lot of it is retired folks moving out. On a side note, it’s nice to be back in Mn, living on a lake, a lake where the trees are on the shore, and not on the bottom of the lake.
Well
Since I am a north side city dweller same house (Wisconsin Import 33-34 years back), the North Loop, downtown, Northeast, University areas, all appear to be booming, (they all have good brew pubs) it doesn’t appear the migration is leaving the metro.
http://www.startribune.com/where-does-twin-cities-rank-for-population-growth-in-midwest/373236871/
LOL…every excuse, except the REAL reasons…
Leftist political climate, high taxes, death taxes, taxes on retired income, and repression of businesses,
Please share, what do you think the real reason is? I believe that cold weather convinces some people to leave or not come, but otherwise it is a great state with something for every one.
However it may cost wealthy retirees tens of thousands of dollars a year to stay a resident here. And maybe even more if they die here. Would you maintain residency here at that annual cost?
By the way we are not talking normal small 401K retirees who are not impacted by Minnesota’s highly progressive tax system. For better or worse they will likely stay and cost MN’s as they get older.
Well
Try the brew pubs!
Have had opportunities to move to Florida, California, Arizona, Colorado, etc. (the trade isn’t just $) quality of life is a fairly broad spectrum, we know the cities are progressive, some of us folks really appreciate the automatic camaraderie, regardless of race, creed, immigration status. Can it get to far left, of course it can, but overall, Texas is so far right, ,and hot it is unlivable, unless you are in Austin (a blue spot in a red sea) even the Texan’s appreciate it, Florida has its crime and heat issues as well, Arizona, great if you like desert and 108 Degrees 1/2 the year,
For folks like me, yes I can probably go anywhere, but you know what Dorthy said, “There’s no place like home”
Understood
Since I am still here, I understand the benefits of staying here. And since April 15 is approaching, I also realize the high cost.
The question is why do people leave or not come here in the first place?
I am thinking weather, taxes, lack of manufacturing jobs, etc. And if you can spend your Winters elsewhere and significantly reduce your taxes… It seems like a no brainer for many retirees.
Where as many folks seem to think that people to do not consider taxation costs as a factor in where they choose to claim residency. The belief that they can just raise taxes and those citizens just have to pay them. Forgetting that there is no law constraining them to stay here.
And yet
People continue to flock to Texas…
??
Republicans control the state house and senate, and Trump won 78 of 87 counties. Which political climate are you talking about? There appear to me to be two islands of blue (that by the way pay most of the state’s taxes) in a sea of red. Makers and takers?
Socialism
Left leaning, liberal, progressive and socialist seem to be the favorite labels for people who want to exercise concerted actions in support of bettering the lives of the people. Individual responsibility does not preclude participating in cooperative efforts for social betterment. If these attempts to provide conditions which will allow society to help its members gain comfort and security are denigrated by calling it socialism then look at our current situation and ask how is that antisocial approach working.
Mosquitoes
I left Minnesota 9 years ago for Colorado for the weather and mountains and a bit better job prospects for my spouse and I. Honestly didn’t mind the winters, but absolutely love the lack of bugs and humidity out here. Cost of living is fairly similar. Never regretted my choice.
Note that the number leaving
Wisconsin is larger and I bet that most of them have higher incomes, advanced degrees and also left from the downside of a certain politician