In slowly growing Michigan, some interesting migration trends

In December of each year, as many await the holidays, demographers look forward to the latest state population estimates from the Census Bureau. While the interest is in the volume of growth for most states around the country, those of us with a particular interest in Michigan are usually hoping for growth of any kind. While this decade began with a loss in 2011 (a continuation of a streak that began halfway through the previous decade), modest growth has been the rule for the past three years.

Population estimates are constructed by incorporating the components of population change - births, deaths and migration, both domestic and international. These estimates track population at mid-year, most recently on July 1, 2014. Births and deaths have remained rather consistent over the last 15 years. However, Michigan’s aging population has brought about decreasing births and increasing deaths, resulting in a decreasing net gain over the years.

The Department of Homeland Security provides an estimate of the number of legal immigrants intending to reside in Michigan. This number fluctuates slightly, but is always positive, as statistics are not maintained on persons who emigrate. The primary determinant of Michigan’s bottom line has been net domestic migration – a consistently negative number resulting from more people leaving Michigan than coming in. The last half of the previous decade saw an average monthly net loss of 7,500 residents, resulting in significant overall population loss for the State. The first four years of this decade have brought that monthly loss down to 2,800, leading to the turnaround in our total population fortunes.

The source of the migration data is the Internal Revenue Service. Each year, the IRS matches tax return ZIP codes with that of the previous year’s form. This allows the IRS to determine movement patterns state-to-state, as well as county-to-county. Because these are tax returns, they can also capture any change in income that accompanies the migration patterns. After a long hiatus, resulting from improvements in their methodology, the IRS recently released both the 2011-12 and 2012-13 files.

The 2011-12 data show Michigan losing a total of 10,424 households, or 15,646 total residents. Those households took with them an estimated $485,449,000. So where did our residents go? As one might expect, the winners were the top growth states in the South and West – Florida, Texas, California, Georgia, North Carolina and Arizona. These six states took $526.8 million from our state economy.

While an additional 31 states benefitted from households leaving Michigan, 13 donated to us. While none reached the 1,000-person mark, we must nevertheless be thankful for what we received. The top six donor states – Illinois, New York, Ohio, New Jersey, Indiana and Pennsylvania – contributed $223.6 million to the Michigan economy.

The 2012-13 data confirm the decrease in out-migration. Michigan’s net loss was 9,849 households, or 12,720 residents. But in spite of the decrease, more money left the state with them – $555.5 million. While Florida and Texas remained the top two destination states, increasing their net gains over the previous year, Tennessee and South Carolina replaced California and Arizona in the top six. On the donor side, Illinois more than doubled its previous level of giving, while second place New York held its spot. Eighteen states moved to the donor side in 2012-13, up from just 13 in the previous year. Just five of those eighteen are located west of the Mississippi.

A benefit of the IRS’s new methodology is their analysis of tax returns by the age of the primary filer, tied to their migration pattern.

The greatest share of out-migrants were those under age 26, illustrating the problem that Michigan has in retaining and attracting new college graduates. Tax filers under 26 had both the highest share of in-migrant (3.9 percent) and out-migrant (5.0 percent) households. A number of efforts have been launched in recent years to try to turn this trend around. We will need to monitor future IRS releases to judge their efficacy. The loss in young tax filers was more than double the number of our older “retiree” segments.

Tax filers between 26 and 34, the millennial segment, represented the second-highest share of both in-migrant (3.6 percent) and out-migrant (3.8 percent) households. While out-migrant households in this category outnumbered in-migrant households, the associated income went against the trend.

The most interesting finding is associated with tax filers between 26 and 34 years of age. This is the demographic group (particularly those with a college degree) that states and cities are doing everything they can to attract. While it is true that Michigan loses more individuals in this category than it attracts, the losses tend to be concentrated in the lowest household income categories - under $50,000, but concentrated In the $10,000 - $25,000 category. Michigan gives up 1,979 households with gross incomes below $50,000, but gains 737 households with gross incomes of $50,000 or more. The result is a net gain for Michigan of $59.8 million.

Two years of data do not make a trend but we can see some hopeful signs that we will be able to revisit as soon as the 2013-14 file is released. Will net out-migration continue to decrease as more states become donors to Michigan? Will we be able to lower our losses in the younger age categories and will the income growth we saw in the all important 26-34 year cohort continue and, perhaps, flow forward? I hope to have the answers by early October.

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Sat, 09/26/2015 - 4:05am
So, bottom line: Michigan is still losing residents. But the majority of those residents we're losing only take from the system instead of contributing to it. And I don't know about anyone else here, but I'm more than a little concerned about the IRS compiling and releasing personal income data to the general public (even if it is aggregate). That was never a function of the federal government.
Sat, 09/26/2015 - 10:00pm
My daughter, a U-M graduate, moved to Asheville, NC. My niece, an MSU graduate, moved to Raleigh and her sister, a GVSU graduate, also moved to Raleigh. My daughter likes the mountains and artistic community. My nieces work at Wake-Med and Duke University Medical Center. I feel like I've been abandoned. There's nothing terribly wrong with Michigan, but given a choice they would rather be in North Carolina.
Sun, 09/27/2015 - 7:37am
KG-1's concern puzzles me. What's exactly is the worry about the federal government publishing aggregate data about domestic migration? With the availability of these data from income tax submissions, they have the raw data available. Their computers can analyze it at minimal expense. The data obviously have value to the states. It looks like a win for everyone. Is this an aspect of a general fear of government?
Sun, 09/27/2015 - 12:23pm
My concern stems from that fact that the government has a serious problem with the "little things" they introduce, snowballing into very large things in a very short period of time. Take you pick on things like seat belt laws to PRISM, it inevitability becomes a very steep slope with no solution in sight. You may argue that the data is valuable to the states, but it is also valuable to large businesses who use it to keep track of the minutiae of our everyday lives. Why do you think that companies offer "preferred customer" programs when you purchase groceries, home improvement items or electronics? Why do you think that utilities are pushing so hard on "smart meters". People have obviously "forgotten" the fact that Lansing used to sell personal information like our home addresses to solicitors. Little bits of information gleaned from various disparate places here and there soon glow and become a very valuable commodity when viewed as a whole. Why do you think financial institutions (i.e. credit cards) are able to know so much about you when you are applying for a card of loan? Phil has already written several pieces already about how we have the best government that money can buy. Do you really think that it is that much of a stretch for some well-connected lobbyist working for a business, to re-write the law so that tax information isn't released on the aggregate level, but instead personal? Unlike yourself, there are a significant number of us who still value our privacy.
Lawrence Kolb
Tue, 10/06/2015 - 7:01pm
Aggregate information can help us all better understand what's going on regarding in and out migration. This reflexive hostility towards government seems out of place in Michigan. Might you be happier in Idaho?
Sun, 09/27/2015 - 9:57am
There are economic factors, bad roads and regressive political policies but judging from things I have read and heard I get the impression that a lot of young people leave Michigan because they find it a boring place to live. I'm far from being a young person but I can't really blame them and I'm finding it rather boring as well.
Sun, 09/27/2015 - 11:29am
Kurt Metzger's analysis of these Census Bureau/IRS data is very informative. Population growth in a state tends to promote economic growth. What strategies may be taken in Michigan to promote population growth?
Sun, 09/27/2015 - 3:01pm
Well, KG-1 don't buy from Amazon, E-Bay, walk on the public streets with security cameras, buy from large retailers, search the internet, subscribe to any number of publications or belong many organizations or do a multitude of other common activities. It's all either public record or the information is sold to the highest bidder.
Mon, 09/28/2015 - 11:44am
And you don't see a fundamental problem with any of that? There was a time here in America where business and the government only knew the information about you, that you wanted them to know. And I haven't even begun to touch on the issue of identity theft...
Jeff Salisbury
Sun, 09/27/2015 - 5:38pm
This op-ed is so ridiculously illogical it barely rises to the level of serious discourse or debate. How could families (or even new college graduates) who left Michigan for jobs elsewhere take $485,449,000 with them to their new state of employment? If they left and the job remained... then someone else would simply take their place and the $485,449,000 would remain in the Michigan economy. On the other hand, if they left and the job evaporated, then so did the $485,449,000. Either way, no one TOOK $485,449,000 out of Michigan and began spending it in Florida, Texas, California, Georgia, North Carolina and Arizona.
Mon, 09/28/2015 - 1:41pm
Further on Jeff's comment, if someone who doesn't have a job finds one in another store and moves there to fill it are they really a negative for Michigan? What If they are living on social assistance? One concern, if we know that our universities are producing far more teaching degrees than we can use in Michigan, why do we let them continue to do it? That definitely looks like a loser for Michigan. You can throw in a bunch of others to go with teaching. I'm not sure if this is just to stir up controversy or something else?