There’s an old joke about economists that I’ve always liked. A junior professor goes to his senior colleague with a brilliant new idea. The older man dismisses it. “In practice, that may be fine,” he sniffs, “but in theory it will never work.”
Economists are like that, at least many of them are. They don’t want reality to invade their abstractions. One of the best examples has to do with mobility. Years ago I read an article by a prominent economist who downplayed the problem of a small town factory spewing out pollution. What’s the big deal? He asked. There must be another town nearby that doesn’t have a soot factory. The residents of the first city could easily move there. Pretty soon the polluter would get the idea.
It works in theory. But it’s not the way most people act. They don’t like to uproot themselves. This may be because they don’t want to leave their friends and relatives, because they are clinging to hometown memories and traditions, or because they just don’t feel like cleaning up the garage. In any case, they are not moving. Or if they do, don’t go far.
The issue of mobility has come up a lot over the past year as the whole country has been forced to grapple with the ravages of the coronavirus. Economists and their libertarian acolytes have predicted an outpouring of wealthy Americans from virus-ridden cities to safer rural areas. Free market polemicist Kristin Tate recently enjoyed a spate of “fresh college graduates and new parents” advocating for a healthier area. “Employees who were previously tied to downtown offices can now trade Brooklyn for Mayberry.”
We’ve heard that before. Back in 1997, British economist Frances Cairncross published her well-read book The Death of Distance, which suggested that breakthroughs in communication would allow knowledge workers to do their jobs at home, and that the result was an emptying of urban downtown areas and a There would be a rush to smaller, quieter places. It did not happen. The city center did not shrink; They grew. In 2018, the proportion of Americans who worked remotely was between 3 and 5 percent.
After the Great Recession began in 2008, Americans didn’t move much either. Their most common response was to stay where they were, even if an opportunity lurked somewhere in some far corner of the country.
The pandemic situation could of course be different. Freshly graduated college graduates who can work freely from home may have the opportunity to leave Brooklyn for Mayberry. But they wouldn’t do it to escape the plague, at least not if they kept up with what was going on. COVID-19 infection rates were no better in most of America’s rural areas than on the streets of major cities. By the end of February, Surry County, NC, where the fictional Mayberry was located, had suffered 140 virus deaths out of a population of just over 70,000 people.
We actually have a lot of data where people have moved and why. There was a drain from many neighborhoods, but it wasn’t very large. Last June, a careful study by the Pew Research Center found that 3 percent of Americans reported permanent or temporary physical activity due to the coronavirus. In November the number was up to 5 percent. This is not a trivial number of people, but it is far from a national exodus. A subsequent study by the Cleveland Federal Reserve came to a similar conclusion, cautiously reporting that statistics on people leaving cities “are unlikely to fit most definitions of exodus.” (I am grateful to the indefatigable Joe Cortright of the City Observatory for pointing out the Cleveland study.)
The numbers vary considerably from region to region. In San Francisco, for example, there appears to have been significant discrepancies. An estimated 80,000 residents left in 2020, an increase of 77 percent over the previous year. But just as interesting as this number is the data on where they went. By far the biggest destination for people who left San Francisco last year was just across the bay in Oakland and the surrounding Alameda County. The next three most popular destinations were also all in the Bay Area. If you browse the list below, you will find Denver. Portland, Oregon; and Austin, Texas, as top long-distance travel destinations. But they were very far down – none of them even made it into the top 15.
This strongly suggests that these migrants did not leave because of the virus itself. You wouldn’t move to Oakland from San Francisco to keep from getting sick. It’s much more likely that you would take such a move because the San Francisco economy was in trouble and jobs were disappearing. And the latest studies have tended to confirm that. The Pew study concluded that nationally as of November, even a subset of those who had moved during the year, only about one in seven did so to avoid a higher risk of contracting the virus.
BUT HERE’S SOMETHING DIFFERENT THAT THE STUDIES TOLD US: Most cities that lost population in 2020 didn’t lose it because people left. They lost the population because there were no newcomers. In New York City, according to a McKinsey study, the ratio of arriving to departing workers fell by 27 percent. Again, this is just common sense. Why move to New York when jobs are disappearing there? Similar numbers apply to Los Angeles, Boston, and Seattle.
This has what it takes to be a major event. Almost all of the major cities that have gained or held on to population over the past decade have done so because immigrants came from outside the United States. If they don’t come for an extended period of time, even if the mass exodus remains a myth, the population of major cities could decline significantly.
Recent research also tells us something about who the urban emigrants were. They weren’t middle-aged people with families. For the most part, they had no middle class income. They were young people, disconnected, and economically stressed. According to Pew, 11 percent of Americans ages 18 to 29 said they had moved for virus-related reasons in 2020. Within the low-income population cohort, the number was 9 percent – about twice the total in the United States.
But even these numbers are misleading. Very few of these moving companies uprooted themselves and looked for new places. Many of them were college students whose campus had closed due to virus problems and who were temporarily moving back in with their parents. In June, 61 percent of those who had moved for pandemic reasons had moved in with one or more family members. In November it was 42 percent.
As big a mistake as it is It is also a mistake to deny that what has happened will have long-term consequences if one takes windy speculation about a large-scale restructuring of the American population at face value. As Richard Florida and others pointed out, our big cities – including the successful ones – have been losing traditional working class residents for several years. The most attractive cities have gradually become enclaves of wealthy professionals and modestly paid service workers. This class of service is largely made up of immigrants. If immigrants are unwilling to move to cities, at least temporarily, we are likely to face not only a shortage of urban labor, but also a decline in the demand for housing in many neighborhoods.
In this case, downtown companies may have to search harder for employees, including lower-level workers, and pay them significantly more than they did before the pandemic. Perhaps even more noticeably, we are likely to see – in some places already – an increasing number of vacant residential properties and a corresponding reduction in the rents that the units are supposed to fill.
That could tilt the urban landscape in different ways. In the long term, this could increase the attractiveness of central cities for immigrants and restore the significant immigration figures of the previrus decade. Or it could fuel a round of arrivals by a new group of young professionals attracted by the newly available units and falling rents. For decades, one of the most appealing things about New York City has been affordability to young people from across America who dreamed of settling in Gotham, making it into journalism, or publishing or show business, and having a good time doing it. In the past 10 years, that dream has largely died out. New York was just too expensive. In a post-pandemic America, it can become affordable again for ambitious and starry people.
Or maybe the urban future will be something completely different. I’ll leave it to economists to make these predictions. But I’m not going to bet any money on what they predict.