Brain drain from a big city in America (2023)

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[PHONE RINGING]

Hello?

Hi. Is this Laura?

Yes, this is her.

Hi Laura. This is Alex Stern from The New York Times. How's it going?

hey It's going pretty well. And you?

Good.

My name is Laura Newman. I'm 33 years old, born and raised in Brooklyn. I came back to New York after I graduated college, and I moved in with my mom because I couldn't even afford roommates in the apartment. Or, I guess I could afford it, but it was like I already had this goal of wanting to open a bar or a restaurant and I knew I had to save money.

I was paid $35,000 a year in 2012 and worked 90 hours a week. I did not want to give up this dream, but every time I felt, my goal is to achieve this amount saved. Every time I hit that, I would then check real estate and other business expenses, and each expense would increase so much that it was like I wasn't making any progress with the amount I had saved. I've kept up with inflation, and that's it.

I'd get involved in bartending events that would bring people from all over the country and encourage networking, and I'd talk to people who lived in other cities and we'd start talking about things like the cost of living in terms of what they spend on rent, groceries, and that it was fantastic for me. And I think that's when I started thinking seriously about leaving New York, even though as someone who was born in St. Vincent's idea of ​​leaving New York was, like, illegal.

I currently live in Birmingham, Alabama and currently own two bars. One is called Neon Moon, and it's something of a honky-tonk offering from a five-star nightclub. The other one is called Queens Park, and it's a cocktail bar. It's funny, though, because there are a lot of New York transplants here in Birmingham, and I pretty much constantly have people who think, I feel like I'm in New York when I'm in your bar. Thank you.

In 2020, we bought a historic craftsman's house from 1910. It has a swimming pool. Right now I'm in the yard and I'm sitting by the pool. It's like, the most amazingly arranged oasis. Trees everywhere. We have plants everywhere and this beautiful covered patio with lights and fans. I have fire. I own a car. We have four dogs, which is what I always wanted. We are trying to have children, which I always wanted, but I never thought I could afford to live in New York, so I decided I would never have it.

After spending my whole life in New York and imagining that I could never have things and kind of writing them off my life plan, it's kind of great to have those things and to have the stability of those things.

From The New York Times, I'm Sabrina Tavernise, and this is The Daily. In recent years, college-educated Americans have begun to leave big coastal cities like New York, San Francisco and Washington, DC in large numbers. Today, my colleague Emily Badger explains what's driving this profound change and what it means for the future of the American city.

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It's Friday, June 2nd.

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Emily, welcome to the show.

Yes, thanks for having me, Sabrina.

So, Emily, you just posted a story about where Americans are moving, specifically how they're moving from big, expensive coastal cities like the one I'm sitting in right now - New York City. Tell me what you find. 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 major metro areas that are somewhat disproportionately responsible for much of America's economic activity. They have a lot of college-educated workers there, they produce a lot of innovation, there's a lot of startup activity going on in these places.

They are very important to the American economy, and it has long been clear that as these jobs have become more expensive, lower-wage workers are leaving them. So if you're a bus driver or a janitor or a teaching assistant or a home care assistant, those kinds of jobs that don't require a college degree, those people were moving out of these places, and it makes perfect sense that they did. It is incredibly expensive to try to live in these communities on a relatively low paying job.

But the thing that we're seeing much more often in these census data that we've been analyzing, and the thing that's really kind of surprising to us, is that now we're starting to see college-educated workers moving out of these places as well. So now we're talking about lawyers, consultants, engineers, people who work for tech companies. They are the engine of the economy in these large coastal metros and are incredibly important. They're kind of the lifeblood of these places, and to see them start to move in is kind of surprising, and also kind of bodes ill for the future of these places.

And when we talk to some of those people who have moved away and ask them about what's driving you to leave, a lot of them describe the cost of living, particularly the cost of housing, and that kind of suggests that these big, expensive metros have reached a tipping point. an upheaval where even people who have really good jobs, even people who make six figures, start to feel like they can't live comfortably there anymore.

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

So if we think about the kinds of cities I'm talking about, economists call them superstar cities, kind of alluding to the fact that they have this kind of disproportionate economic power. They became that over time because they developed these economic centers and peculiarities. So if you're out of college and grad school in Iowa or Illinois and you want to work in finance, move to New York. If you want to work in the tech industry, move to San Francisco. Maybe move to Seattle. If you want to be a military entrepreneur or work in government, move to Washington.

And that concentration of students with college degrees is part of what makes these places so economically powerful. Economists would argue that when we have all these workers located in the same place, they become more productive. They bounce ideas off each other, inventing things together that they might not have invented if they were sitting at home working alone in Iowa.

Right. So basically, there's a multiplier effect in those superstar cities, as you call them, right? These are cities that are greater than the sum of their parts.

Completely.

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

That's exactly how economists think this worked.

So when did we see that start to change, based on your reports?

So let's use San Francisco as an example. We started to see this change happen about ten years ago. These college-educated San Francisco workers we've been talking about are starting to move in larger numbers. Every year, more and more of them move out. They're still moving to San Francisco because San Francisco remains a magnet for workers like this, but they're moving more and more until we kind of get to this point where now more of them are moving out than moving in.

I understand. A tipping point so that there is actually a net loss. In other words, more people are leaving than coming.

Yes. The San Francisco area is becoming a net exporter of graduate students to other parts of the country. And if this was happening in a Rust Belt community, or a smaller community in middle America, we'd call it a brain drain, wouldn't we?

Law.

We're not used to thinking of these big, powerful coastal metros as a brain drain, but that's basically what we're seeing in this migration data.

So if these big cities are exporting these people, who is importing them? What places do they go?

Places like Salt Lake City, Austin, Houston, Dallas, Tampa, Atlanta. These places that are growing, are still thriving, you have relatively good job prospects there. But the most important thing is that they are more affordable than these big coastal cities.

But why are people actually moving out of these coastal cities at this very moment? I mean, housing prices have been very high in New York and San Francisco and all those places for a long time, right? Is it a pandemic?

So here comes the pandemic, and it really kind of reinforces these patterns that we've seen forming over the last decade or so. And I think one of the big reasons why that's happening is that a lot of these college-educated workers in expensive coastal cities have been given this new option for the first time to work remotely.

And for many people, that means working remotely all the time, so you can completely move to another part of the country and keep your job. And for some workers, that means now they have this new, amazing deal that they can take advantage of, which is, get paid in San Francisco, but pay the mortgage in Dallas, pay the mortgage in Phoenix. And it's an amazing deal if you can get it.

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

That. I mean, the circumstances of the pandemic and the rise of telecommuting are somehow perfectly tailored to take this trend that's been developing over the past decade and just kick it into motion. Austin is a great example of a place that has benefited from this trend. About a third of workers who moved to Austin during the pandemic and this migration data say they're telecommuting now that they've moved there. This is an incredible number of people who are actually distant labor migrants.

That's incredible. A third of all workers who moved to Austin.

Yeah, and what's happening in Austin to attract all those workers is basically the other half of the story of these migration trends that we're seeing. We see that on one hand these incredibly expensive coastal cities kind of drive people away, but then we see places like Austin and Salt Lake City that attract them. And in these places, something has changed over the past decade. In the last 20 years, even.

They remodeled their city center, added new restaurants. It is now possible to get really good Thai food in many other communities in America. They've developed their own little tech hubs, so if you're a tech worker, it's quite possible that you could find a job in Austin. Chances are, if you decide you don't want to do that job in Austin, you can find another job in Austin that will do the same thing, because there's a lot of that stuff out there now.

But probably the most important thing that this next tier of cities does, and the thing that comes up most often when I interview people who have moved and ask them why they moved, is affordability, and especially housing affordability. I mean, you'll hear tech workers, engineers, consultants say, I wanted to become a homeowner and I could never do that in San Francisco.

As of this spring, in the San Francisco metro area, the median cost to buy a single-family home is about $1.25 million.

Woof. Average cost. So, a typical home.

A typical home. It's probably a small home, with one bathroom and maybe two bedrooms.

Thanks, San Francisco.

Over and over, people bring up housing affordability, and that's a fundamentally incredibly important advantage that these next-tier cities have over the San Franciscos, the New Yorks, the Washingtons. Their accommodation is much more affordable, and it is more affordable because they built a lot of it. And that's just not true for San Francisco.

Yes. I was in Phoenix at one point last year and was amazed at how much the prices have gone up in the suburbs and around the city. The metro area was just booming with construction.

That. These are places that are growing and are happy to have people come and are working hard to accommodate more of the population moving in.

So it sounds like cities like Phoenix are actually solving San Francisco's affordable housing crisis.

This is exactly what is happening.

So this is great for places like Austin, Nashville, Salt Lake City, but not so good for San Francisco, Washington, or New York. All this migration of college-educated workers from those places will also bring with it some big problems.

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We'll be right back.

This is Diana Nguyen. I'm a producer at "The Daily" at "The New York Times." For starters, could you tell me your name, age and occupation?

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

I feel like I've lived many lives in New York during my time there, but really, the last seven, eight years of my life in New York was actually spent as a PhD 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 felt like a natural fit. There's a part of me that's only ever at peace in New York, partly because I'm gay and for the most part we're completely safe and assimilated. I am a museum addict and I go to all exhibitions and galleries. I love the art of New York, the culture of New York, the incredible diversity of New York. I lived in Queens and there were 20 languages ​​on my block, and it was a small block.

You are always aware that it is a cost-effectiveness analysis, that everything you love in New York has a very high price.

And what happened to me over time is that I became less and less willing to pay those costs.

And when I say costs, I don't necessarily just mean economic costs in terms of dollars. I mean the exhausting grind of, say, laundry. So how does it feel for a 40-year-old to walk up and down three flights of stairs to put her laundry on a laundry mat three blocks away, like in the rain or snow or whatever?

And it's the same joke to go to work, it's the same joke to go to the store. So to live in New York, you have to do - and if you don't have money, like a lot - a lot of money, everything that the average American could outsource with, like a washing machine or a dishwasher or any of the conveniences that people just have , all that work is on you.

Can you tell me when you really started entertaining the idea of ​​moving and what - put me in that headspace.

Well, it was actually very sudden, because I was thinking about it. Like, every summer I'd go - or whatever. I would always visit my family. I would say, oh, I miss them. Oh, Minneapolis is so beautiful. And then I'd go back to New York, and I'd 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'm at now, and basically it was very easy to move around. And I worked remotely, and they said, yes, of course. You can live where you want to live. So, I live in Minneapolis and work remotely.

And so, do I miss the city in so many ways? Yeah, but right, the calculation has changed because I've actually found that I have a lot more time to be a human being in my own life and body when I'm not in New York. I just wrote a novel. I always wanted to write a novel. I wrote a novel. Why is that important? Because while you're grinding it out in New York, what aren't you doing?

You say you wrote the novel in Minneapolis because you have time?

And.

What is it about?

That's - well, okay. So this goes in -

Yes, here's the slogan. It's Jane Austen for gay people in an alternate version of reality where there's no homophobia.

What are the things you love about where you live?

So this weekend I rode about 150 miles on my Rowbike, and it was like pure bliss and peace.

I had people over to my house twice this weekend. I don't think I've ever had a guest in New York—like, a dinner guest. Like, now I have people at home and they have parking.

Tell me about your apartment.

This is the apartment I bought two years ago. I think it's about 1,400 square feet, which when I left I thought, oh my god, it's so big. Now I just feel like I need twice as much space. But that's what happens when you leave the kennel. In the end you just want to run free.

I don't need to constantly be subjected to high levels of intense stress and anxiety just to get through the day. So it's quiet, it's clean, it's nice, and I have a lot of amenities.

So Emily, people really like their new lives in these smaller towns, but you mentioned that this new migration pattern was creating problems for the larger cities they left behind. What are the problems?

So, big cities across the country have basically been competing to attract these workers for the last two generations. Now to lose that competition in San Francisco, New York, Washington means there's economic activity you're going to lose. That's tax revenue you'll lose out on.

And the money that highly educated people spend is the money that lower-wage service sector workers earn in restaurants and bars and things like that. And so, to start taking away these people who, as we talked about earlier, they're the lifeblood of the economy of these places, the economic development officers really don't want to see that, the mayors really don't want to Look at this.

Right. If you're the mayor of New York or San Francisco, that's very concerning.

And.

What are they doing about it? What are they doing?

So the most important single action they could take, because so many people cite the cost of housing as the reason they leave, is that these places could build a lot more housing. And basically, at the end of the day, that doesn't really happen. They don't do that. The state of California is trying to do some things to address its housing crisis, but for the most part, those places haven't been building enough housing for decades, and there's little to suggest that they're suddenly going to fix that problem.

But why are they not doing anything? I mean, it defies all common sense, doesn't it?

Housing policy in America, in a way, makes no sense. Part of that is because if you're already a homeowner in the San Francisco area, you've made a ton of money in the real estate market I've described. Over the last decade it has doubled in value, and you don't want a lot more housing to be built because you want to maintain the value of your property. And so, somehow involved in the politics of housing in these places are a lot of current homeowners and current voters who are simply opposed to building more housing. They choose people who do not want to build more apartments.

You know, New York State is having a big debate about this these days. The governor proposed a number of ideas in her budget this year that would encourage local communities to build more housing to help solve this housing crisis, but there was too much opposition and all of those ideas essentially died in the state legislature this year.

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

So one of the things that's happening is that geographic inequality in America is getting worse, and that basically means that inequality between places is increasing. New York is pulling away from other parts of the country, San Francisco is pulling away from other parts of the country because more and more only the richest of the rich can really afford to live there and be comfortable. Economists are very concerned, not only about inequality between people, but also about inequality between places. It's just -

And why?

It is simply not healthy for a country to have so much wealth clustered in a small number of places, and only a small number of people can use all the resources that are produced from that wealth. Only a small number of people can go to the cultural institutions that New York has, can take advantage of the hospitals that New York has built, take advantage of the restaurant industry that New York has.

To go back to the economist's argument about what happens in these places with the multiplier effect that they have, the economist would say that we are better off if as many people as possible can live in the most productive and advanced places. Literally, US GDP gets bigger if more people work and produce things in the most productive places.

But also, we've just spent the past 20 minutes talking about how that's not possible because nobody can afford to live in those places. With all due respect, economists, by that logic, wouldn't all the people moving to Austin, Denver, and Nashville create more of these productive centers elsewhere, and wouldn't that be good for the economy? Like, why does it have to be these cool cities?

Yes no. That's a really great question. And I think it's entirely possible in the years to come that Austin, Denver, Phoenix - they will take the same kind of special role in the economy that New York, San Francisco and Los Angeles have taken for generations. They could be the new engines of the American economy and will have increasingly strong multiplier effects in the years to come.

And that would be good for the country. I mean, it would be good if economic activity and educated workers were somehow dispersed to more places, to move away from the coast, to move inland, so that more parts of the country felt that they were benefiting from prosperity. this type of knowledge worker economy driven by college-educated workers.

So that would all be good, but it would be a lot better if it wasn't the housing crisis that was driving that growth in these other places. I mean, we would be much better off as a country if we encouraged more prosperity in more parts of the country and allowed more people to move to places that are already prosperous.

And, Emily, what about the affordability issue in Nashville, for example, after all these tech workers moving in? They probably bring some of these problems with them, don't they? Like, they export these same things that somewhat plague New York and San Francisco.

Yes. I mean, we've mostly talked about how good it is for Nashville or Austin or Salt Lake City to have those college-educated workers, but there's an asterisk to that, which is that those higher-income workers who have higher-paying jobs are coming in, increasing the pressure on the local real estate market. Apartment prices are rising.

And so, if you're a college-educated worker in New York and you look at Nashville, you think, oh my God, it's so much more affordable for me to live there. But if you're a long-time resident of Nashville and you watch a New Yorker move in with their New York salary that they bring to the local real estate market, you think, oh my God, my community is getting more crowded. It will potentially become unaffordable.

Right. New Yorker, come out.

Yes Yes. I mean, it's true that this group of people brings many benefits as well as some challenges, but it's not inevitable that Nashville will acquire all the affordability problems of New York or San Francisco. This next group of places has essentially come to a crossroads where now mayors, public officials and voters have a chance to decide that we don't want to be the next San Francisco.

And the first question is, OK, well, how is it done? A big part of the answer to that is, well, make sure you keep making room for more people to come in, and that's going to mean building more housing. This will mean thinking about the construction of extremely affordable housing.

And then as far as the workers themselves making those moves, the people we're talking about at the end of the day, they're not making those moves thinking about this necessarily the way mayors are going to have to think or the way economists have thought about it. I mean, they're talking about these really 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 anymore. I don't have to have roommates. I can have large furniture the size of Texas, which I could never have in an apartment in New York. Or just these other little details, like knowing your neighbors in a way they don't in these big cities, or having access to peace and quiet, or having free time for hobbies. All these little details that add up to make people feel like they have a better quality of life than they had in these really expensive places.

So to hell with efficiency. We want to be in a place that gives us joy.

Yes, and increasingly, those college-educated workers have more choices where they can go to find it.

Emily, thank you.

Thanks for having me.

We'll be right back.

Here's what else you should know today.

On Thursday night, the Senate passed a bipartisan bill to repeal the debt ceiling and avoid an unprecedented bankruptcy of the US government. The vote mirrored that in the House of Representatives, which approved the measure on Wednesday, with Democrats pushing it across the board. Despite the fact that it was a Republican bill, supported by 44 Senate Democrats, compared to just 17 Republicans.

President Biden is expected to sign the legislation before Monday, when the government is expected to hit the debt ceiling and run out of money to pay its bills. And Arizona has determined there isn't enough groundwater for all the housing development already approved in the Phoenix area, and will prevent developers from building some new subdivisions.

The decision by state officials is a sign of looming problems in the West, where overuse, drought and climate change are straining water supplies. Phoenix is ​​currently the fastest-growing metro area in the country, and Maricopa County, where Phoenix is ​​located, gets more than half of its water supply from a limited amount of precious groundwater.

Today's episode was 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. The music for our theme is by Jim Brunberg and Ben Landsverk from Wonderly.

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That's it for "Dnevnik". I'm Sabrina Tavernise. I'll see you on Monday.