“Last one to leave, turn out the lights.”
In Michigan during the 1980s this was a frequent one-line joke. If recent trends continue, it will be no joke.
Data from household mover United Van Lines (UVL), released June 30, indicate Michigan has eclipsed North Dakota as the number one “outbound” state in America, with 65 percent of the firm’s Michigan-related traffic moving out of the state. This is the first time in a quarter-century that Michigan has held the number one position.
UVL has been publishing data on its client moves since 1977. Statistical analysis shows it strongly correlates with federal census data. In other words, UVL moves are highly correlated with American migration patterns.
Departure Rate Climbing
The survey shows Michigan’s outbound traffic is increasing, climbing 0.4 percentage points in 2003, 2.8 percentage points in 2004, and 3.0 percentage points in 2005. During the first half of 2006 the outbound rate was up 1.1 percentage points over the 2005 rate.
It may not be long before the Great Lakes State eclipses its 1981 record of 66.9 percent of UVL traffic moving out of state. Michigan had double-digit unemployment that year. Responses to a new question added to this year’s UVL data indicate 57 percent of all U.S. moves are job-related.
This moving trend appears to be affecting other important sectors of the state’s economy. According to the Office of Federal Housing Enterprise Oversight (OFHEO), Michigan finished dead last among the states in home price appreciation from the first quarter of 2005 through March 2006, with a 2.86 percent increase.
The Detroit News reported on July 6, “in May there were nearly 14,400 more homes for sale in Wayne, Oakland, Macomb and Livingston counties [located in Southeast Michigan] than last year (a 43 percent increase), and 32,500 more than five years ago.”
“As the state economy goes, so goes housing appreciation,” said Bill Martin, chief executive officer of the Michigan Association of Realtors in Lansing. Martin said listings are up over last year, but he believes the state as a whole can avoid a net decline in sales.
Job Losses Mount
It is no secret that Michigan’s economy has been hurting. From January 2004 to January 2006 the Great Lakes State was the only state not hit by Hurricane Katrina to lose jobs, according to the Mackinac Center for Public Policy, a Midland, Michigan-based research institute.
The Mackinac Center reports Michigan’s per-capita Gross State Product (GSP) ranking among the states has fallen to 35, dropping from 16 in 1999. From 2004 to 2005 the state’s GSP percentage growth was last in the nation. In other words, the state and its people are growing poorer relative to the rest of the nation. That Michigan’s citizens have less wealth means they have less to spend on housing, and many are leaving for greener pastures and attempting to sell their homes in the process.
North Dakota, Louisiana, New Jersey, and Indiana round out the top five states in terms of outbound traffic, according to UVL, while Oregon, North Carolina, Nevada, South Carolina, and Georgia are the top inbound states.
Michael LaFaive ([email protected]) is director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy.
For more information …
The July 6 Detroit News article, “Desperate House Sellers,” is available online at http://detnews.com/apps/pbcs.dll/article?AID=/20060706/BIZ03/607060381.
“Elderly Migration and State Fiscal Policy: Evidence from the 1990 Census Migration Flows,” published in the National Tax Journal, is available at http://ntj.tax.org/wwtax/ntjrec.nsf/0/1c27d6fa02ad14a485256afc007f3c3f?OpenDocument.