Residents are moving again. That’s good news for Michigan’s economy.

Moving in Michigan

Michigan’s rate of residential moves between counties within a state is ninth in the nation. That’s quite a contrast to Michigan’s rate of moves between states, which is 46th nationwide.

It’s no secret. Michigan has done a poor job attracting folks from other states, and its residents are equally less likely to leave the state.

Yet while the percent of people moving nationwide is now lower than it has been since the end of World War II, Michigan’s residents actually do something more frequently than residents in most states: They move within the state a lot more.

At a time when economists have noted that a decline in mobility creates a mismatch between available work and available workers, Michigan’s intra-state migrations could reduce those problems.

Thousands move every year between Wayne, Oakland and Macomb counties in southeast Michigan, and thousands more move in and out of Ottawa and Kent counties, the leaders of the West Michigan economy that is booming.

“For us, it’s easy to sell this area,” said Cindy Brown, executive director of Hello West Michigan, an organization that promotes the region as it works to attract employers and workers.

Michigan’s high rank – 9th  in the nation, at nearly 4 percent a year –  in intra-state moves is an antidote to the very low level of migration between states (Michigan is ranked 46th in moves between states). Nearly 9 percent of residents moved within counties (national rank is 18).

The intra-state moves help rearrange the labor market in a state that lost over 820,000 people to other parts of the country from 2001 through 2016, when the manufacturing sector collapsed and Michigan was the only state to lose population between 2000 and 2010.

Fewer moves can create a labor imbalance, economists say, with workers in one region unable – or perhaps unwilling – to swap regions in search of better opportunity. And in Michigan, there are widely divergent unemployment rates, from more than 7 percent in northern and northeastern Michigan to around 3 percent in west central and west Michigan.

Jobless rates vary

Some of Michigan is enjoying historically low unemployment rates while other areas continue to struggle. Rates are from October

Source: State of Michigan

“Low mobility rates are associated with worse outcomes, especially for less educated, younger workers,” said Steven J. Davis, a University of Chicago economist who has written about the impact on fewer moves on the labor market.

Getting help

But the intra-state moves are helping: people are headed to West Michigan from across the state.

Some workers who lose their jobs find it easier to move because union contracts may allow them to move to other facilities. When the Monroe Visteon plant closed in 2008, workers were placed at plants in Saline in Dearborn, said Mike Keck, financial secretary for UAW Local 723, which represented the plant’s workers.

He knows the workers with Local 723 were lucky – they were guaranteed an opportunity, even if it meant moving or a long commute.

“Some of these places, when they close, it’s ‘have a nice day,’” said Keck, who has retired.

Not everyone is so lucky: In Luna Pier, the closure of the Consumers Energy electric generating plant in 2016 cost the tiny city on Lake Erie more than 60 percent of its tax revenues, Mayor Dave Davison said. That forced the city to layoff eight people – and they had no job guarantees.

“For a small community, that’s a lot,” he said.  He said all have found work in the area.

What happened in Luna Pier points out the double-edged sword of mobility: It’s better for people if they can easily move from one area to another. They are better positioned to weather quick turns in the economy. But more frequent moves can hurt communities, taking away human capital that’s not guaranteed to return.

“If you are interested in the welfare of the individual, you want people to be able to move relatively easily, however if you are interested in the welfare of the place, then you would prefer that people don't move as easily and quickly,” said Don Grimes, a University of Michigan economist who creates an annual forecast of the state’s economy.

For many rural parts of the state that are rapidly aging and losing population, the loss of people reverberates for those who remain: the tax base is lowered and there are fewer people to support the economy, the schools, the community.

“Those areas are going to see issues being able to provide services and remain as independent communities,” said Eric Guthrie, the state’s official demographer.

Just prior to the nation recession, when the rest of the country was doing better, many people left Michigan for work. But once the Great Recession started in 2008, those flows largely stopped, in part because housing values had sunk so low people couldn’t sell their homes and because opportunities dried up elsewhere, Grimes said.

When you don’t want to leave

Not everyone wants to move – or is able.

Bay County and neighboring Saginaw County were the hardest hit regions in the state.  Wages have fallen, adjusted for inflation, and though unemployment is less than half of what it was during the recession, it’s still higher than the state average or that found in West Michigan.

So why don’t more people pack up and head west?

“It’s called cost of living,” said Bob Adamowski, CEO of the Bay County Realtor Association.

Workers who make less now than they did before the recession can afford to stay, Adamowski said, in part because of the cost of living, not least of which is housing.

Median home values in Saginaw and Bay counties are $96,200 and $100,600, respectively, and are down nearly 18 and 7 percent from 2010. Compare that to Kent County, where values have risen and the median home value is now $163,100.

Adamowski also tapped into the idea behind recent research that shows that the biggest driver of the declining mobility rate is fewer people are switching jobs. Researchers from the Federal Reserve Board and the University of Notre Dame concluded that the value of a new job opportunities does not outweigh the value of staying put.

Go west?

Though Michigan enjoys some of the highest rates of intra-state moving in the nation, it can be hard for workers to leave one area for another. Here are a few economic differences between Kent County (Grand Rapids) and Saginaw and Bay counties, where job, wage and housing values have lagged.

Housing* 2010 2016 Change
Kent $159,115 $163,100 2.5%
Saginaw $117,006 $96,200 -17.8%
Bay $107,574 $100,600 -2.5%

*Median home value, owner-occupied homes

Income* 2010 2016 Change
Kent $53,653 $59,668 11.2%
Saginaw $47,092 $45,849 -2.6%
Bay $51,037 $44,756 -12.3%

* Median household income

Unemployment 2010 2016
Kent 10.1% 3.4%
Saginaw 12.2% 5.1%
Bay 11.6% 5.2%

In the past, Americans moved far more frequently and the same too was true in Michigan. In the Upper Peninsula, mining booms and busts have sent population there on a frequent roller coaster ride. Since 1910, the region has lost population in five decades, and gained it in five others.

That same fluidity, which saw huge national surges in population from east to west and north to south, has waned nationwide. Some of the reasons are rooted in demographics – an aging population moves less – and economics, with rising rates of homeownership affecting the ability to move.

People move for a number of reasons besides jobs: They often move to attend college – some of the highest migration counties are where the state’s largest universities are – and often when they retire.

But one of the biggest drivers is still a career opportunity. And in West Michigan, those still have some magnetic appeal: Kent and Ottawa counties are growing in population, much of it driven by net positive migration from within the state.

Again, that’s good news – for workers, companies and the region’s housing. Also for advocates like Hello West Michigan’s Cindy Brown. It also helps explain why the region’s jobless rate hovers just over 3 percent – success begets success.

“We are not seeing a problem getting people to West Michigan,” Brown said.

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Comments

Rich
Tue, 12/19/2017 - 3:34pm

As a senior with multiple residences, I will declare my residence in the area that gives me the greatest tax advantage. Talking to those from other states, I find that Michigan is extremely oppressive when it comes to property tax on non-homestead residences. It is, in my opinion, also taxation without representation in that any non-homestead person can not vote on any millage that may affect their property tax.

John Q. Public
Wed, 12/20/2017 - 12:03pm

“If you are interested in the welfare of the individual, you want people to be able to move relatively easily, however if you are interested in the welfare of the place, then you would prefer that people don't move as easily and quickly,” said Don Grimes...

Individuals are real; places are artificial. I know which one I'm more interested in seeing prosper. Nearly every effort to make a "place" prosper is a concerted political attempt to concentrate even greater wealth than they already hold in the hands of the already wealthy landowners there.