The Mackinac Center Driving Michigan’s Migration Discussion

Mackinac Center analysts have frequently been the first to say what needs to be said on public policy issues. Committed to our independence, big and bold ideas are produced by our shop because that is part of the mission of a good think tank. One idea discussed early and often by our experts was that of state-to-state migration and what such statistics tell us about ourselves and public policy.

Many scholars believe that there is arguably no better single metric for summing up “quality of life” issues than that of migration. For some reason, people get up and go, and moves are viewed economically as investments in one’s self and one’s family. These investments can come with considerable costs — both economic and psychological.

What drives people to vote with their feet and move to other states (or to Michigan from elsewhere), and what does it say about policy choices? In a word: opportunity.

Typically, opportunity takes an economic form but it need not. It can also be a function of such things as days of sunshine and other amenities such as access to lakes and oceans.

Studying migration determinants allows us to infer what attracts or repels people and their money and talents. Because Mackinac Center scholars are sensitive to such items we noticed quickly when Michigan’s economic fortunes led to apparent changes in outbound migration rates.

Our first official, published investigation into Michigan’s outbound migration rates came in early 2006, though we had been following available data on the subject for two years. America’s largest mover of household goods, United Van Lines, had reported increases in the rate at which it took Michigan residents elsewhere. According to United Van Lines, 63.9 percent of all its Michigan-related moves in 2005 were outbound. This was just shy of Michigan’s all-time outbound rate of almost 67 percent set in 1981. The company keeps such records on the contiguous 48 states going back to 1976.

Mackinac Center Adjunct Scholar Michael Hicks performed a statistical analysis of the entire UVL dataset against actual migration data and found the two to be very highly correlated. That is, UVL’s private data was telling us what was happening with regard to inbound and outbound moves long before the Census Bureau could give us official statistics. As the state continued to suffer economically, Hicks and I would drill further into migration data looking for answers and recommending policy solutions.

In 2006, UVL data indicated that Michigan had once again achieved the dubious distinction of having the highest outbound traffic rate of any state in the union — a position it would hold for four straight years. In 2007 Michigan broke its own all-time outbound traffic rate at 67.8 percent of all Michigan-related moves being outbound. Remarkably, Michigan’s 2007 unemployment rate of 7.1 would have actually been higher had there not been an economic release valve. There were other jobs to be had around the nation and people were fleeing our state to take them. That would change during the Great Recession and our unemployment rate would leap past 15 percent.

By 2008 the Mackinac Center — with help again from  Hicks — decided to create its own statistical model in an attempt to find out what policy variables might be driving what we took to calling Michigan’s diaspora. After consulting a rich field of migration literature we chose to measure the influence of variables such as taxes, labor flexibility, days of sunshine, welfare levels and unemployment rates. Our findings confirmed what other scholars had found, though perhaps to varying degrees. We found:

  • For every 10 percent increase in per-capita state and local tax burdens some 4,900 people would leave Michigan every year thereafter. 

    We found this migration impact to be three times higher than the national average we calculated from data in our model. Since our research came hard on the heels of an 11.5 percent increase in the personal income tax, such new data struck home. The full tax hike package (which included a business tax increase) passed in late 2007 and took an additional $1.4 billion from Michigan taxpayers.

  • For every 10 percent increase in the value of transfer payments from government to people in a state, outbound migration would increase by another 850 people annually.
  • For every 1 percentage point increase in Michigan’s unemployment rate — which was the highest in the nation in June 2008 at 7.9 percent — Michigan could expect to lose another 900 people annually.
  • For every 10 percent difference in days of sunshine (our weather variable) between Michigan and other states we could expect to lose another 120 people annually.

The weather variable is no small matter because study after study finds that weather is an influential variable in peoples’ decision to move, and it is the one policy above that Lansing lawmakers can’t change. Scholar John Rappaport focused solely on the influence of weather in his study of migration and reported that, from 1970 to 2000 Michigan’s weather was responsible for population growth in the Great Lake State of between 1.5 percent and zero.

Maybe we should be grateful that Lansing pols can’t change the weather. If they could we’d probably have blizzards in July. Since commanding the sun to shine or the rain to fall is still outside their talents, we long argued, they should make changes that would swamp Michigan’s weather variable. Specifically, we began recommending elimination of the state’s new and ugly Michigan Business Tax and replacing it with nothing. That is, to make up dollar losses with only cuts to government spending.

We also recommended that the state adopt a right-to-work law. Anecdotally it seemed that many Americans, not just Michiganders, were moving to the South and West areas overwhelmingly represented by states with right-to-work protections.

As 2008 — the year we performed this study drew to a close  — the United States Census Bureau announced that between July of 2007 and 2008 Michigan had lost 46,000 more of its residents. At the time, we were only one of two states to lose population.

But Census and United Van Lines aren’t the only sources from which migration statistics can be drawn. The Internal Revenue Service publishes county-to-county move data based on income tax returns. That data was also revealing: Michigan residents chose to move to Florida and Texas from 2007 to 2008 than any other states in the union. During that year 12,748 Wolverines moved to Texas while the Great Lake State absorbed 5,272 Texans for a net loss of more than 7,400.

By July 2009 United Van Lines was reporting that (mid-year) 70 percent of its Michigan-related traffic was outbound. The migration news is still bad for Michigan but getting better. Michigan ended its run as the number one outbound traffic state and through 2012 ranked 4th in the nation. Official Census Bureau numbers, released in December, also noted an improvement in population growth.

It is still too early to tell if it was recent policy changes that are responsible for Michigan’s improving migration picture. Eventually, however, we believe that recent business tax and labor climate changes will drive greater economic growth and opportunity for Michigan and ultimately all Americans.