The brain drain of America's great city (2023)

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[PHONE RINGS]

Hi?

Hi. Is that Laura?

Yes, it's her.

Hi Laura. This is Alex Stern from the New York Times. How are you?

Hi. Its going well. You too?

Bom.

My name is Laura Newman. I am 33 years old, born and raised in Brooklyn. After college, I moved back to New York and lived with my mom because I couldn't even afford roommates in an apartment. Or, I think I could have paid, but that's about it, I already had a goal of opening a bar or restaurant and knew I had to save.

In 2012, I was making $35,000 a year and working 90 hours a week. I didn't want to give up on that dream, but whenever I feel like it, my goal is to achieve that written value. Every time I got it right, I checked real estate and other business expenses, and each expense added up so much that I felt like I couldn't get any further with the amount saved. I tracked inflation and that's it.

I got involved in bartending events that brought people from all over the country and encouraged networking, I spoke to people who lived in other cities and we started discussing the cost of living in terms of how much they spend on rent, groceries, and it was amazing for me. And I think that's when I started seriously thinking about leaving New York, although as someone who was in St. Vincent's Hospital, I found the idea of ​​leaving New York illegal.

I currently live in Birmingham, Alabama and currently own two bars. One is called Neon Moon and resembles a honky-tonk five-star bar. The other is called Queens Park and is a cocktail bar. It's funny though because there are a lot of New York transplants here in Birmingham, and people almost always say, Sitting at your bar feels like New York. Thank you.

In 2020, we purchased a historic craftsman's house from 1910. There is a swimming pool. I'm sitting in the backyard by the pool now. It is like the most amazing picturesque oasis. Trees everywhere. We have plants everywhere and this beautiful covered patio with lights and fans. I have a bonfire. I have a car. We have four dogs that I have always dreamed of. We're trying to have the kids I've always dreamed of, but I never thought I'd be able to live in New York, so I've decided never to have them.

After spending my life in New York imagining that I could never have things and just write them into my life plan, it's great to have these things and have that stability.

From The New York Times, my name is Sabrina Tavernise, and this is The Daily. In recent years, well-educated Americans have begun to leave major coastal cities like New York, San Francisco and Washington DC en masse. Today, my colleague Emily Badger explains what is driving this profound change and what it means for the future of the American city.

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It's Friday, June 2.

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Emily, welcome to the show.

Yes, thanks for having me, Sabrina.

Emily, you just told a story about where Americans are moving, specifically how they move out of big, expensive coastal cities like where I am now, New York. Tell me what you think. What's the story?

Yes, we are particularly interested in places like New York, Washington, where I sit, San Francisco, Los Angeles, Seattle. These are large metropolitan areas that have been disproportionately responsible for much of the economic activity in the United States. They have a lot of highly qualified employees there, they produce a lot of innovations, there are a lot of startups happening in these places.

They are very important to the American economy, and it has long been clear that as these places become more expensive, workers with lower wages are leaving. So if you're a bus driver, a janitor, a teaching assistant, or a home care worker, doing those jobs that don't require a college degree, these people are moving from those places, and it makes sense that they did it. Living in these communities with relatively low-paying jobs is extremely costly.

But what we're seeing much later in the census data we've been looking at, and what's really surprising to us, is that we're starting to see college-educated workers leaving those places as well. Now we're talking about lawyers, consultants, engineers, people who work for tech companies. They were the engine driving the economy of these great coastal metropolises and are extremely important. They are the lifeblood of these places and it is quite surprising to watch them move and also bodes ill for the future of these places.

And when we talk to some of these people who have moved and ask them what puts you off, many of them describe the cost of living, specifically the cost of housing, suggesting that this big, expensive subway has reached a tipping point where even people who have really good jobs, even those who make six figures, start to feel that they can't live comfortably there anymore.

So this is really a phenomenon that I've noticed in my own life and in my circle of friends, people leaving New York and going to other cities like Philadelphia, like Houston. But I saw your story and thought, okay, this is really a national thing. It's not just people in my circle of friends. So I want Emily to really show me what you discovered. What exactly is going on here and when did it start?

If you think about the cities I'm talking about, economists call them superstar cities, alluding to the fact that they have disproportionate economic power. They became them over time as these economic centers and specializations developed. So if you graduated from college in Iowa or Illinois and want to work in finance, move to New York. If you want to work in the tech industry, move to San Francisco. Maybe you're moving to Seattle. If you want to become a defense contractor or work for the government, move to Washington.

And this concentration of alumni is part of what makes these places so economically powerful. Economists would argue that having all these workers in the same place increases their productivity. They brainstorm, come up with things together that they wouldn't come up with if they worked alone at home in Iowa.

Normal. So there's basically a multiplier effect in these super star cities, whatever you call them, right? These are cities that are greater than the sum of their parts.

Absolutely.

And it's not just good for cities. It's also good for the entire US economy.

Economists believe that's exactly how it worked.

So when did we notice that it started to change based on your reports?

So let's take an example from San Francisco. We started seeing this change about a decade ago. Those high-skilled workers from San Francisco that we talked about are starting to move en masse. More and more of them move every year. They still move to San Francisco because San Francisco remains a magnet for these kinds of workers, but more and more are moving until we get to the point where now more moves than moves.

I understood it. The turning point to actually take a net loss. This means that more people are leaving than arriving.

Yes. The San Francisco area is becoming a net exporter of college graduates to other parts of the country. And if something like this happened in a Rust Belt community or a smaller community in Central America, we'd call it a brain drain, wouldn't we?

Right.

We're not used to thinking of these large, massive coastal metropolitan areas as a brain drain, but that's what we're really seeing in these migration data.

So if these big cities export these people, who imports them? What places do they go?

Places like Salt Lake City, Austin, Houston, Dallas, Tampa, Atlanta. Those places that are developing are still thriving, you have relatively good job prospects there. But most importantly, they are cheaper than those big coastal cities.

But why are people leaving these seaside towns right now? I mean, house prices have been really high in New York and San Francisco and elsewhere for a long time, right? Is it a pandemic issue?

Then the pandemic hits and overwhelms these patterns we've seen over the last decade. I think one of the main reasons why this is happening is that many highly skilled workers in expensive coastal cities are getting this new remote work option for the first time.

And for many, that means permanent remote work, allowing you to completely move to another part of the country and keep your job. And for some employees, that means they now have a great new deal they can take advantage of, which is a San Francisco paycheck but a Dallas mortgage payment, a Phoenix mortgage payment. And that's a lot if you do.

Normal. Like who wouldn't want to do that? People have been doing these arbitrage things with their paychecks and mortgages during the pandemic. We even see it among our own colleagues.

Yes. That is, the circumstances of the pandemic and the rise in popularity of remote work are perfect for starting this trend, which has been growing over the last decade. Austin is a good example of a place that has benefited from this trend. About a third of employees who moved to Austin during the pandemic and these migration figures say they are working remotely now that they have moved there. That's an incredible number of people who are essentially remote migrant workers.

This is amazing. One-third of all employees moved to Austin.

Yes, and what Austin is doing to attract all these workers is actually the other half of the story of the migration trends we're seeing. On the one hand, we see that these incredibly expensive coastal cities scare people away, but we see places like Austin and Salt Lake City that attract them. And in these places, something has changed in the last ten years. Even in the last 20 years.

They rebuilt their urban centers, built new restaurants. Now you can get really good Thai food in many other communities across America. They've developed their own kind of tech hub, so if you're a tech geek, getting a job in Austin is quite likely. It's likely that if you decide you don't want to do this job in Austin, you might be able to find another job in Austin that does the same thing, because there's a lot of stuff like that now.

But arguably affordability, and in particular housing affordability, is the most important thing this next tier of cities does, and what comes up most often when I interview people who have made these moves and ask them why they moved. I mean, you hear technicians, engineers, and consultants say, "I wanted to be a homeowner, and I could never do that in San Francisco."

As of this spring, the average cost of buying a single-family home in the San Francisco metropolitan area is $1.25 million.

wow. Average cost. So a typical house.

A typical house. And it's probably a small house, with one bathroom and maybe two bedrooms.

Thanks, San Francisco.

Again and again people mention affordability of housing, and that's actually a hugely important advantage this next group of cities has over San Francisco, New York, Washington DC. Their housing is much more affordable and more affordable because they built so much. And that just isn't true in San Francisco.

Yes. I was somewhere in Phoenix last year and was amazed at how expensive it was in the suburbs and around the city. The metropolitan area prospered due to construction.

Yes. These are places that are growing and enjoying the arrival of people, working very hard to accommodate more people who are moving.

Cities like Phoenix seem to be solving San Francisco's housing crisis.

That's what's happening.

So it's great for places like Austin, Nashville, Salt Lake City, but not San Francisco, Washington DC or New York. All this movement of workers with higher education from these places will also bring big problems.

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we're coming back.

This is Diana Nguyen. I'm the producer of The Daily at The New York Times. I think for starters, can you tell me your name, age and occupation?

So my name is Eduardo Lerro. I'm 45 years old. I work as a consultant.

I feel like I spent many lifetimes in New York while I was there, but really the last seven or eight years of my life have been spent in New York as a graduate student and then as a teacher in New York Public Schools. .

I've never hated New York in my life and I still don't. It was the only place in the world where I naturally belong. There's a part of me that's only calm in New York, partly because I'm gay and most of the time we're completely safe and assimilated. I am a museum junkie and go to every exhibition and gallery. I love New York art, New York culture, the amazing diversity of New York. I lived in Queens and my block had 20 languages ​​and it was a small block.

You're always aware that this is a cost-benefit analysis, that everything you love about New York comes at a very high cost.

And what happened to me over time was that I became more and more reluctant to bear these costs.

And when I say cost, I don't necessarily mean just the economic cost in dollars. I mean, for example, a grueling laundry routine. So what's it like for a 40-year-old to go up and down three flights of stairs to get his clothes to the laundry mat three blocks away, say in the rain or snow or whatever?

And the same shit is supposed to work, the same shit goes to the supermarket. So to live in New York, you have to do - and if you don't have money, a lot - a lot of money, everything that the average American can outsource, like a laundry room, a dishwasher, or other amenities that people just have, all that work is up to you .

Can you tell me when you really started thinking about the idea of ​​moving and what made me fall into this headspace?

Well, actually it was quite suddenly because I was thinking about it. For example, every summer I went - or whatever. I visited my family often. I'd be like oh I miss them. Oh, Minneapolis is so cool. And then I'd go back to New York and say, oh, you're crazy, girl. You can't go back there. But then it happened that I got this job at the company I work for now, and it was really easy to move around. And I was working remotely and they were like, yeah, sure. You can live where you want. So I live in Minneapolis and work remotely.

So, do I miss the city in so many ways? Yeah, but that's okay, the bill has changed because I've found that I have a lot more time to be human in my own life and body when I'm not in New York. I just wrote a novel. I've always wanted to write a novel. I wrote a novel. Why is it important? Because what do you not do working in New York?

Are you saying you wrote a novel in Minneapolis because you had time?

Sim.

What is it about?

That's - well. So it goes in -

Yes, here's the password. It's Jane Austen for gays in an alternate reality without homophobia.

What things do you like about the place where you live?

So this weekend I rode the Rowbike for about 150 miles and it was pure bliss and peace.

I visited my home twice this weekend. I don't think I've ever had a visitor to New York like a dinner guest. For example, I now have people in my house and they have parking.

Tell me about your apartment.

This is an apartment I bought two years ago. I think it's 1,400 square feet, and when I left, I thought, oh my god, it's so big. Now I feel like I need twice as much space. But that's what happens when you leave the farm. After all, you just want to roam for free.

I don't need to be constantly preoccupied with high levels of intense stress and anxiety to get through the day. So it's quiet, it's clean, it's beautiful and I have lots of amenities.

So Emily, people are really enjoying their new life in these smaller towns, but you said this new migration pattern is causing problems in the larger cities they left behind. What are these problems?

So major cities across the country have basically struggled for the past two generations to attract these workers. Losing this competition in San Francisco, New York, Washington D.C. means economic activity you will miss. It's tax revenue you'll miss.

And the money that well-educated people spend is the money that low-paid service workers earn in restaurants and bars and things like that. To get out these people who, as we said before, are the driving force of the economy in these places, the economic development officials really don't want to see it, the mayors really don't want to see it.

Normal. If you are the mayor of New York or San Francisco, this is very disturbing.

Sim.

What are they doing with it? What actions do they take?

The most important action they could take, since many of these people cite the cost of housing as a reason for leaving, is that many more housing could be built in these places. And actually, ultimately, it's not really happening. they do not. The state of California is trying to do a few things to address the housing crisis, but most of these places have not built enough housing for decades and there is little sign that they are suddenly going to solve the problem.

But why don't they exist? I mean, it's going a bit against the flow, isn't it?

Housing policy in America doesn't make sense in some respects. Part of it is that if you already own a home in the San Francisco area, you've made a lot of money in the real estate market I've described. Its value has doubled in the last decade and you don't want to build many more homes because you want to preserve the value of your property. And almost built into housing policies in these places are many homeowners and current voters who are simply against building more homes. They choose people who don't want to build more houses.

You know, New York State has been talking about it lately. The governor proposed several ideas in her budget this year that would encourage local communities to build more homes to address this housing crisis, but there were many objections and all of those ideas essentially died during this year's term.

So what does that mean, Emily? Where does that leave us?

So one of the things that is happening is that geographic disparities in America are widening, and that actually means that disparities between places are increasing. New York is moving away from other parts of the country, San Francisco is moving away from other parts of the country, because increasingly only the richest of the rich can really afford to live and feel comfortable there. Economists are very concerned not only about inequalities between people, but also about inequalities between places. Just -

It's because?

It is unhealthy for a country when so much wealth is concentrated in a small number of places and only a small number of people manage to use all the resources that come from this wealth. Only a small number of people can go to the cultural institutions that New York has, to enjoy the hospitals that New York has built, to enjoy the restaurant industry that New York has.

Going back to the economist's argument about what happens to these places with the multiplier effect they have, the economist would say that it would be better if as many people as possible could live in the most productive and prosperous places. Literally, US GDP is growing because more people are working and producing things in the most productive places.

But we also spent the last 20 minutes talking about the fact that it's impossible, because no one can afford to live in these places. With all due respect, economists, by this logic, couldn't all the people moving to Austin, Denver, and Nashville create more of these productive hubs elsewhere, and wouldn't that be good for the economy? For example, why does it have to be these super cities?

And not. That's a good question. And I think it's quite possible that Austin, Denver, Phoenix will play the same special role in the economy for the next few years that New York, San Francisco and Los Angeles have played for generations. They may become the new engines of the American economy and will have stronger multiplier effects in the coming years.

And that would be good for the country. My point is that it would be good for economic activity and for skilled workers to spread to more places, to move from the coast to inland, so that more corners of the country can feel that they are benefiting from the prosperity of this type of worker-based economy about the knowledge that employees with higher education rule.

Everything would be fine, but it would be much better if it wasn't for the housing crisis that caused this increase in these other places. My point is that we would be much better off as a country if we promoted more wealth in more parts of the country and moved more people to places that are already wealthy.

So, Emily, what about availability in Nashville, for example, when all the tech people leave? Presumably they bring some of these problems, right? For example, they export the same things that plague New York and San Francisco to some extent.

Yes. I mean, we've mostly talked about how good it is to have these highly skilled workers in Nashville or Austin or Salt Lake City, but there's an asterisk on it and that's it, because higher-income workers who have more jobs come in and increase pressure on the local housing market. They are raising housing prices.

So when you're a college-educated worker in New York and you look at Nashville, you think, oh my god, it's so much cheaper for me to live there. But when you live in Nashville for a long time and watch a New Yorker move into the local real estate market with a New York salary, you think, oh my god, my community is getting more and more expensive. It is potentially unavailable.

Right. New Yorker, go away.

Yes Yes. I mean, it's true that this group of people brings many benefits, but also some challenges, but it's not inevitable that Nashville will take over all the accessibility issues of New York or San Francisco. This next tier of seats has actually reached a crossroads where mayors, officials and voters now have a chance to decide: We don't want to be the next San Francisco.

And the first question is: ok, how do I do it? A big part of the answer to that question is make sure you keep making room for more people, and that means building more homes. This means thinking about building cheap houses.

And when it comes to the workers themselves who make these changes, the people we are ultimately talking about are not necessarily making these changes the way mayors will have to think about them. or the way economists thought about it. I mean, they talk about these very intimate, beautiful details about quality of life and what it means to them to have quality of life.

They talk about things like: I finally don't have to share a bathroom with other people. I don't need roommates. I can have large pieces of furniture the size of Texas that I could never have in a New York apartment. Or just those other little touches like getting to know your neighbors in a way they didn't know in those big cities, access to peace and quiet, or free time for hobbies. All these little details give people the impression that they have a better quality of life than in these really expensive places.

So to hell with efficiency. We want to be in a place that makes us happy.

Yes, and increasingly these highly skilled workers have more opportunities to find it.

Emilio, thank you.

Thank you for welcoming me.

we're coming back.

Here's what else you need to know today.

On Thursday night, the Senate passed a bipartisan bill designed to raise the debt ceiling and avoid an unprecedented bankruptcy of the U.S. government. The vote mirrored that of the House that passed the measure on Wednesday, with Democrats pushing it over the line. Despite being a Republican bill, 44 Senate Democrats supported it, compared to only 17 Republicans.

President Biden is expected to sign the bill into law before Monday, when the government is expected to hit its debt ceiling and run out of money to pay bills. And Arizona has determined that there is not enough groundwater for all of the already approved housing in the Phoenix area and is preventing developers from building new neighborhoods.

The decision by government officials is a sign of impending problems in the West, where overuse, drought and climate change are crippling water supplies. Phoenix is ​​now the fastest-growing metropolitan area in the nation, and Maricopa County, where Phoenix is ​​located, derives more than half of its water supply from scarce and valuable groundwater.

Today's episode is produced by Nina Feldman, Alex Stern, Diana Nguyen, Carlos Prieto and Mooj Zadie. It was edited by Lisa Chow, features original music by Marion Lozano, Elisheba Ittoop and Dan Powell, and was engineered by Chris Wood. Our theme song was performed by Jim Brunberg and Ben Landsverk of Wonderly.

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It's all in the journal. I'm Sabrina Tavernise. See you on Monday.