The Great Covid Business Migration

States with onerous lockdowns lost employers as well as workers

WSJ editorial. Excerpts:

"The bureau examined trends in single-establishment business migration since the early 1990s using data from its quarterly census on employment and wages. It found that while migration fell during the 2001 and 2007-2009 economic downturns as business activity generally slowed, moves accelerated during the Covid lockdowns.

BLS counted 6,384 businesses in 2021 that had moved across state lines during the prior year, up from 5,524 in 2020 and 3,677 in 2010. Net migration to the South and from the Northeast doubled between 2020 and 2021. After gaining businesses from other states for most of the last three decades, the West lost a net 175 in 2021—mostly from California.

New York led in net business out-migration (487), followed by California (456), Illinois (208), Maryland (50) and Pennsylvania (33). Florida (399), North Carolina (148), Nevada (103), Texas (103) and Tennessee (92) drew the most businesses from other states. All besides North Carolina have no income tax."

"Another new study this week from SmartAsset estimated that an individual earning $200,000 in Manhattan would save $64,567 in taxes and the cost of living by moving to Miami, while someone making $650,000 would come out ahead by $195,076. Higher earners in San Francisco would save about 25% of their income by moving to Miami."

"One result is turmoil in commercial real estate in New York City, San Francisco and Chicago. Another is persistent higher unemployment in California (4.5%), Illinois (4.2%) and New York (4%), compared to a national average of 3.7% and 2.6% in Florida. Unemployment in New York City is three times higher than in Miami."