Detroit: Out-Migration Devastates Michigan (and the Midwest)

The Detroit News is running a series on out-migration from Michigan called "Leaving Michigan Behind". (For some reason, the main article is missing from the series front page). While this series is nominally about Michigan, that state's acute woes, as in many areas, shows us exactly the same problem that has been occurring in slow motion in the Midwest for a long time.

This article finally recognizes the full truth. Out-migration from Michigan is not just an effect of the poor economy there, but has also become one of its causes. Growth has its own particular logic. It feeds on itself. So to with decline. It begets more decline. Reversal will not be easy. For Michigan, it likely won't happen until the auto industry restructuring is completed. In other places, there is more scope to act.

The demographic challenge facing Michigan is huge:

• A net of 109,000 people left Michigan last year
• Since 2001, Michigan lost 465,000 people to migration - as much as the population of Grand Rapids, Warren, and Sterling Heights (the second, third, and fourth largest cities in the state after Detroit) combined. "Population loss of that magnitude is so rare that its impact has never been studied."
• Those departing are disproportionately educated and higher income. The state lost a net of 18,000 people with college degrees in 2007 alone. Half of Michigan's college grads leave the state a year after graduation. The largest single city for Michigan State alumni is now Chicago. "It's just like being back at Michigan State" says one of the people who moved there.
• People leaving earned $49,700. Those who moved in, only $40,000. This represented a payroll loss in the state of $1.2 billion in 2007 alone - with an additional $3.7 billion in indirect effects.
• The departure is putting downward pressure on housing prices, reducing tax collections, and making it difficult for the state and its communities to invest in improvement.
• The series devoted a whole article to the thousands more people who want to leave but can't due to being upside down in their mortgage or other constraints.
  

This is an incredible problem, not just for Michigan, but for the rest of the Midwest. In particular, the net loss of college educated residents who are the entrepreneurs and workforce of the new economy businesses is crippling. Businesses won't be started or relocate in an place without an ample workforce.

However, the current focus on "brain drain" as the source of the problem misses the real issue. While no doubt the Midwest economy is causing college grads who might otherwise want to stay home to leave, in an ever more mobile society, moving out is a natural part of people's lives. Indeed, if you read the typical account of how the elite global knowledge worker lives, you often hear about people flitting from place to place to place chasing opportunity.

The real problem is not that too many people are leaving, but rather that too few are coming. It isn't an outflow problem, it's an inflow problem. Places like Silicon Valley or New York or London didn't get to be talent hubs by retaining their home grown talent - they did it by hoovering up everybody else's talent. They might have good education systems and elite universities to be sure, but they've smartly decided to outsource the expensive process of producing most of their brains to other people - like the folks in the Midwest. Quoting the article

"Saying that college grad rates must increase for Michigan to remain competitive, Granholm set a goal in 2004 of doubling the number of college graduates.

"Since then, the number graduating from Michigan colleges has inched upward from 38,615 in 2004 to 41,250 in 2008.

"But the burgeoning exodus of college grads has wiped out that gain.

"The biggest beneficiaries of Granholm's efforts so far have been states like Washington, where officials bluntly describe the influx of thousands of college-educated workers from Michigan as a cost-effective approach to education.

"'That we can attract those people (with degrees) is a benefit to the state,' said Washington state Rep. Glenn Anderson, the ranking Republican on the higher education committee. 'We are importing intellectual capital at a very low cost to ourselves.'

"So many college grads have flooded into Washington to work for companies such as Boeing and Microsoft, that Anderson has had trouble pushing for increased higher education funding for in-state students.

"Indeed, since 2000, Washington has jumped from 18th to 12th in the nation in the percentage of adults with a degree. Michigan fell from 30th to 35th.

"'We're getting a lot of people, bright people, and that's good,' said State Rep. Mike Sells, D-Everett."

This shows the counter-productive nature of programs designed to boost educational attainment rates. The quote at the top of this article says it all. I remember seeing a billboard advertisement for Indiana University touting, "More Brains, Less Drain". But that is absolutely backwards. More brains means more drain.

The Midwest's leading export isn't cars, it's educated people. Arguably much of the Midwest is, as someone once put it, a giant factory producing people for export. It's like the Matrix, only the people are produced through ignorance created by a consensual hallucination, not an AI generated virtual reality.

That's not to say we shouldn't invest in our kids education. If we didn't educate them, they might be more likely to stay, but they would not be the contributor to our economy that we might hope. But beyond the economic effects, it is simply the right thing to do. I believe we owe it to our children to do what we can to help them find their fullest flourishing in life, to have the best chance of realizing their hopes and dreams.

Which is another reason I'm troubled by policies that try to retain college grads in state. It is almost an exploitative message, one where the highest educated children are expected to stay home not for their own benefit, but for someone else's. I want everyone to have the widest possible horizons. By all means, if they want to stay at home, I want there to be a place for them there. But often it is better for them to leave. I can guarantee you that you wouldn't be reading this post if I had stayed in Laconia. I had to leave the become The Urbanophile. Having left, I can return with new and valuable experience and more to offer than if I'd stayed. Also, even if I were to leave and never come back, I'd like to think I can still serve the cause by being an advocate and a connection for the old hometown and home state. Cities and states need to start looking at those who left as an asset, the way universities and employers see their alumni networks, instead of a loss.

There are three sources of talent:

1. People who stayed
2. Boomerangers who left and came back
3. Immigrants who are new to a place

All of the most successful cities get the majority of their talent through immigration. But most places in the Midwest don't even try to lure non-native graduates. It's as if they have so little confidence in their attractiveness that they can't even conceive of someone who wasn't born there wanting to move in. They put all of their focus on retention and boomerangers - and mostly just educating more people who will end up moving out of state.

This has serious consequences. Firstly, it looks at talent like some sort of a "wages fund doctrine". That is, it assumes every state has its fixed homegrown population supply, and every brain that gets away reduces the potential like water literally draining from a leaky barrel. But more importantly, it means those states won't benefit from the new ideas and experiences and the diverse perspectives that true outsiders would bring.

In an in an ever more complex, diverse, rapidly changing globalized economy, a place's best competitive interest is not well served by having a city or state full of people who've never lived anywhere else.

So why do states and cities follow this approach? I think it is probably the same reason that every city and state in the Midwest is seeking the same new industry clusters. Something has to be done and these seem like the most plausible ways to go. If not this program, then what? What do you tell people who are seeing the plants disappear, the brains move away? No leader can simply say, "Sorry, can't help ya."

The problem is that programs that would really change game require sustained commitment to the long term, often requiring public policy choices that are not popular, and will only pay off downstream, and without a guarantee of success. It is often easier and more popular, among conservatives and liberals, to focus on boosting graduation rates, "brain drain" programs, or "creative class" flash in the pan programs like having the mayor hob-nob with skateboarders or artists to show that we have "cool cities". And indeed, these might do some good - but won't reverse the trend line.

The reality is more difficult. Attracting significant talent over the long term means change and investing to create places the educated want to live - without rendering a place undesirable or unaffordable to everyone else. That's a really hard problem, because to do it right you can't just copy Seattle or Portland or Denver or Austin. Tackling those cities at their strongest point by trying to beat them at their own game is a fool's errand. And they've more or less decided to focus only on the educated elite. Instead, you have to think hard, get creative, dig deep and find a unique, compelling, and truly local vision for an environment that will appeal to a segment of the educated classes. It is an absolute imperative. Because smart, talented, ambitious, educated people, the kind who start companies or work in new economy businesses, want to live in a place where the civic aspirations match their personal aspirations.

With some pockets of exceptions, the Midwest is failing to deliver, either for its current residents or the ones it needs to attract to turn around decline.
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