Michigan's Migration Status Improves

Since 1977, United Van Lines has published an annual analysis of which states (plus the District of Columbia) it moves clients to and from. For four consecutive years (2006-2009), Michigan experienced the highest net rate of outbound moves according to UVL. Full-year numbers are out for 2011 and there is good news for Michigan. The Great Lake State is now fourth among the states for outbound traffic, a considerable drop since 2009.

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Michigan’s outbound traffic rate in 2010 was a discouraging 62 percent. That is, 62 percent of all Michigan-related UVL moves were leaving the state. New Jersey’s rate was highest at 62.5 percent. In 2011, 58.0 percent of Michigan’s moves were outbound.

The top five outbound states are Illinois (60.8 percent), New Jersey (60.5 percent), New York (58.3 percent), Michigan (58.0 percent) and West Virginia (56.7 percent). The top five inbound destinations are Washington, D.C., (62.5 percent), Oregon (60.8 percent), Nevada (56.9 percent), North Carolina (56.4 percent) and Florida (55.1 percent).

This UVL data is one of several important migration indicators. Because the information is released so early in the year, it serves as a leading indicator for what U.S. Census state-to-state migration numbers will show when they become available next December, almost a year later (and those figures typically run from July to July). The Mackinac Center performed a statistical analysis and found UVL’s data to be very highly correlated with the Census figures.

The Mackinac Center has long studied migration patterns because they are perhaps the single best metric for measuring quality of life issues. Outbound migration suggests there are more attractive options elsewhere.

What variables drive those decisions?

Research suggests they include many factors, including taxes, the labor climate, the generosity of welfare programs, and even weather. Lawmakers can’t control weather, but the policies they adopt in other areas do impact migration decisions. For example, Mackinac Center research has found that for every 10 percent increase in personal taxes paid by Michigan residents, some 4,900 people flee the state every year thereafter.

Other studies have found similar relationships between taxes and migration, such as one released just last summer by the Mercatus Center. In 2007, lawmakers here hiked personal income taxes by more than 11 percent, a factor that almost certainly continues to drive citizens from Michigan.

As part of a 2011 tax system overhaul, the Michigan Legislature effectively repealed an upcoming 8.3 percent personal income tax cut that had been written into statute by their predecessors, while also eliminating exemptions that will increase taxes for many retirees. However, in 2011 the Legislature also enacted significant business climate reforms that are likely to improve the employment picture here, and potentially reduce outbound migration in the future.

In general, policies that lower the cost of living, working, investing and raising a family tend to make living in a state more attractive to current and potential residents. The Mackinac Center has identified cutting taxes and spending, passing a right-to-work law and reducing regulatory burdens on job providers as policies most likely to bring about that desired outcome.

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