SHARP SLOWDOWN IN MIGRATION CAUSE FOR ECONOMIC CONCERN
HANK FISHKIND: It’s really important because we are so dependent upon population growth that comes from migration. Ninety percent of our growth comes from people moving here, and most of the growth in our labor force. And that’s particularly true here in Central Florida, so that’s why this slowdown in migration is potentially worrisome for us. That’s it.
BRENDAN BYRNE: Is it a serious concern for economists?
FISHKIND: Yeah, it’s a real serious concern, again, you know, considering 90% of our population growth, and most of our labor force growth comes from migration, much of it from other states in the United States.
BYRNE: So you’re the economist. Let’s put some numbers on it, Hank.
FISHKIND: Sure. Over the last few years, population growth has averaged about 350,000 in Florida, and that’s about average since 1970. But what we were expecting is at least 100,000 to 150,000 more people moving into Florida, based upon the demographics and the economics. I mean, we’ve had one of the longest periods of economic growth ever in U.S. history, very low interest rates, very low inflation. These are the exact conditions that should give rise to much faster population growth. We didn’t get it.
BYRNE: So why isn’t that population growth there?
FISHKIND: Well, there’s a lot of theories about it. One thing is the great recession. Much of the slowdown came after the Great Recession. And there was a sharp drop in wealth as people’s houses are worth less, so it’s harder for people to move. A second thing is that even though we have changes in the demographics, that should have benefited us with lots of retirees, their wealth was also compromised. And then during this whole economic expansion, Brendan, the wealth was largely concentrated amongst the higher income population and so vast swathes of the population didn’t get any increases in income.
BYRNE: Why has mobility dropped so dramatically?
FISHKIND: Well, in part for the economic reasons we discussed, also in part because of the demographics. So even though there are a large number of baby boomers, half of the rate of movement has occurred over the last few years. So it used to be that almost 20 percent of all people turning 65 and over would move and now it’s only 10 percent. Baby Boomers are working longer, in part because they want to and in part because many of them have to.
BYRNE: Now this is a concern to economists so there must be a cost involved in this right? What are we looking at here?
FISHKIND: Well, this huge costs in terms of economic growth, when we have slower mobility, we have lower rates of economic growth. Lower rates of mobility are also associated with lower rates of economic innovation and and therefore growth in real GDP. So the lack of mobility in this great reduction is going to correlate to slower growth. And we’re having that now we’re only having 2 percent growth where we used to get three and 4 percent growth.
BYRNE: So we talked about why people haven’t moved. What did the census numbers say about why people have moved?
FISHHKIND: Well, most people move for personal and family reasons, about 25 to 30 percent of all people who move move for those purposes. People moving for work is about 12 to 13 percent and retirements only 1 percent of all reasons that people move.
BYRNE: That seems really low, 1 percent for retirement.
FISHKIND: It does seem really low and in fact it’s actually higher than it was 20 years ago. It’s one of the few areas of mobility where the rate of mobility actually has gone up. And that’s all because of the change in demographics with the retirement of the baby boomers. And so we would have expected actually that rate to be two to three percent, not just one percent.
BYRNE: You mentioned that there was about 12 to 13 percent of growth of people moving for job related reasons has that number grown since the 2000s.
FISHKIND: It’s grown some and it reflects a stronger economy because now people can move and they feel more confident that they’ll be able to get a job as compared to the depths of the Great Recession.