Skip to content

The Meaning of the Massive Flight of Wealth and People to Red States

America is on the move. So where are Americans moving to and from, and where is their money going as well. This is important to understand to know where opportunities may exist as well as where politics may change in a region and its subsequent culture.

The demographic migration.

America’s top 15 cities by percentage growth last year were clustered in Arizona, Texas, and Florida, with a few in Idaho and one in Tennessee. The US is spreading out, heading South and West, and creating new boomtowns, tech hubs, and rising power centers.

A Census Bureau recent report showed some key takeaways.

  • Georgetown, Texas, had the most growth from July 2020 to July 2021 – 10.5%, a rate that would double the population in less than seven years.
  • Next were Leander, Texas (10.1%) … Queen Creek Town, Ariz. (8.9%) … Buckeye, Ariz. (8.6%) … and New Braunfels, Texas (8.3%).
  • The sixth-fastest-growing area was Fort Myers, Fla. (6.8%).
  • Then Casa Grande, Ariz. (6.2%) … Maricopa, Ariz. (6.1%) … North Port, Fla. (5.5%) … Spring Hill, Tenn. (5.4%) … Goodyear, Ariz. (5.4%) … and Port St. Lucie, Fla. (5.2%).
  • Three suburbs of Boise, Idaho, were in spots 13-15: Meridian (5.2%) … Caldwell (5.2%) … and Nampa (5.0%).

Looking at the map of the US below, we can see the cities that are of greater than 50k in population, where the demographic winners and losers are – learn more here and here.

US City Demographic Change 2022In terms of raw gains in population, the following five cities showed the biggest influx of new residents.

US Big City Demographic Change 2022

More than half of the country’s 15 largest cities saw population decreases during the coronavirus pandemic, according to US census data released measuring city growth from July 2020 to July 2021. The switch to remote work during the pandemic enabled many people to move, prompting desires for cheaper cost of living or lifestyle changes.

The wealth migration.

Will the Red Wave come crashing down on the Democrat's heads in November?(Required)
This poll gives you free access to our premium politics newsletter. Unsubscribe at any time.
This field is for validation purposes and should be left unchanged.

So the above gave us a good idea of where people are moving to and from. The next question one may ask is – what kinds of people are on the move relative to their socioeconomic class.

As an example, Illinois, one of the nation’s other big losers, shows just how damaging being an “exit” state can be – especially when a state starts to lose its wealthier residents, and they are only partially replaced by people who make less. The Illinoisans who fled in 2020 earned, on average, $30,600 more than the residents of Illinois gained from other states. That’s the biggest gap since at least 2000. See this in the chart below.

Illiniois Net Migration Incomes Historical 2020

Looking at the broader US, in the chart below, we can see the biggest winners and losers in major cities in terms of wealth migration.

Biggest Net Migration Incomes Historical 2020In the map below we can see the wealth migration by state – learn more here. The problem with chronic outflows, like in the case of New York, is that one year’s losses don’t only affect the tax base the year they leave, but they also hurt all subsequent years. The losses pile up on top of each other, year after year. And when a state loses income to other states for 21 straight years, the numbers add up.



US Wealth Change by State 2022

The opposite is true for migration winners like Florida. Gains in people and income pile on top of each other each year, building an ever-growing tax base. In 2020 alone, the state’s tax base was some $197 billion higher due to the 20-year string of positive income gains from net in-migration.

The demographic and wealth migration political analysis.

As a way of review, the following is the “official” electoral map from the 2020 presidential campaign – see the source here. This gives you an understanding in which states the politically Blue (Democrats) and politically Red (Republicans) live.

2020 Electoral Map

If one overlays the demographic and wealth migration maps over the political map, the correlations become clear. What are some key takeaways on what it may mean politically?

  • People are moving from politically Blue states to Red states.
  • The people that are moving to Red states are more affluent.
  • Losing Blue states become even poorer and more problematic.
  • America’s regions have become even more polarized politically.

There is a thinking that the Blue state migrants will turn their new homes in Red states to Blue. As crazy as it may seem, people flee what they created, only to create once again what they have fled. This may or may not be true.

It is possible that the migrants coming from Blue states to Red states are more politically conservative and will be slower to change their newly adopted communities to Blue. Seeing the homes, they fled from becoming even more problematic may cause them to rethink their values.

Time will tell.

See more Chart of the Day posts.

 RWR original article syndication source.