Massachusetts is hemorrhaging people. In fact, it’s seeing the highest outmigration numbers in the last 30 years, according to a new report from the Massachusetts Taxpayers Foundation. A net 110,000 people moved out of the Bay State over roughly the first two years of the pandemic within the United States, most of them between the ages of 26 and 35.
The question is: why? Rent is certainly a factor. Boston has the second-highest median rent in the country after New York City. Traffic congestion and the many woes of the MBTA have also dominated headlines. But learning that the future of the workforce is leaving in record-high numbers has many waving red flags.
Doug Howgate, president of the Massachusetts Taxpayers Foundation, joined GBH’s All Things Considered host Arun Rath to break down the report in more detail.
Arun Rath: So we know this is not a new trend necessarily, but these numbers are pretty arresting, especially since the 25- to 36-year-olds are the ones most likely to leave. What does this mean immediately for the future of the workforce here?
Doug Howgate: I think it certainly should send some signals to policymakers and to everyone here in Massachusetts that a lot of the success that the state has had over the last few decades is something that we’re not necessarily entitled to. We need to think about how different long-standing demographic trends, pandemic-induced demographic trends and policy decisions, how they’re affecting location decisions and what we can do about it.
Rath: Before we get into the “why,” tell us a bit about the “where.” Do we know where people are moving to?
Howgate: I will say that one of the fascinating but frustrating things about a report like this is: you have to use a lot of different data sources. So, for example, a number you see in our report and a number of other reports is about 110,000 people leaving Massachusetts. That’s domestic outmigration — that’s people moving into and out of Massachusetts from other states.
At the same time, we look at IRS data on tax returns, which is a little more dated, to give us better granular information on the ages of folks, their income levels and things like it. So it’s this kind of patchwork of different data sources that means that it’s easy to draw different conclusions. But I think they paint a pretty consistent picture of what is happening in terms of where folks are headed nationwide.
There’s a trend of people heading from the north to the south. Northeastern states generally have lost about 800,000 people to domestic outmigration. Southern states have gained about 1.6 million people or so, so that’s a big factor. But one of the things that we find fascinating is that we’re starting to see some new competitors in Massachusetts. Maine and Vermont, for example, have actually seen upticks in their domestic in-migration while we’ve lost people, but that wasn’t the trend we saw prior to the pandemic.
Rath: So let’s talk about that in terms of our immediate area, the ways in which we’re losing to other northeastern states.
Howgate: I think that’s something that probably resonates with a lot of people anecdotally as well. We probably all know a couple of people who maybe have moved to the White Mountains or the south coast of Maine or wherever. I think what we’re seeing is a really interesting, probably pandemic-induced phenomenon. The question is, one, is it permanent? And two, what does it tell us?
What I think it might tell us is, hey, picking up and moving to Texas or to Florida is still a big life decision. But if you have a job that enables you to work remotely, but you still want to keep a connection to the area — maybe moving to Maine or Vermont or New Hampshire — where you can probably afford housing for less, and you might have some different amenities. I think the value proposition for that has changed for a lot of folks dramatically, and we’re seeing that, at least for now, in the numbers.
Rath: It’s interesting because I was just about to ask you about the tech sector aspect of these findings. We think of tech jobs being an asset for Massachusetts, but we’ve lost around 2,000 while other states have gained. Those seem to be portable jobs, so is that part of the pandemic migration?
Howgate: Yeah. Again, we know what the data say, and then it’s about what conclusions we draw. We always have to be careful with that. But certainly, as we talk to folks in Massachusetts, what you often hear is that I.T. and tech jobs tend to be the most mobile.
The other thing we know is that Massachusetts has had a pretty mature tech sector for a while, so part of this is likely that other states are simply catching up. But as you start to see that loss in jobs in Massachusetts, there’s a real concern about how to make sure we actually have a tech sector here in Massachusetts.
Rath: You mentioned that one of your data sources is tax data. We know that last year, voters passed what some call the “millionaires tax,” an additional 4% tax on residents with incomes over $1 million. Do we have a sense from this data if we’re losing our millionaires?
Howgate: So the data doesn’t tell us that yet; that tax went into effect on January 1st. I think one of the things we were trying to do with this report is a lot of the debate and discussion seems to be this very binary conversation about outmigration is solely about low-income families who can’t afford housing and childcare, or it’s solely about millionaires who are leaving the state.
I think one of the things we wanted to indicate was that we’ve got to go where the data tells us. The reality is we had some pre-pandemic trends that created demographic headwinds for us. The pandemic seems to have accelerated some of those, and by the way, we’ve made some policy decisions like the surtax that have a very pronounced impact on a very small portion of our population, so we need to be concerned about what we can do to make sure those folks stay in the state as well.
Rath: There are a lot of factors here, mainly the pandemic, that are out of our control. But in terms of things we can do, in terms of policy, what are some things that could reverse some of these trends?
Howgate: Kind of like the policy challenges we face, in terms of the policy solutions, nothing is going to solve 100% of the problem or explain 100% of where we’re at. So it’s really about being holistic in our look at policy.
We’ve supported tax relief, similar to what Gov. Maura Healey and the House have done. But what does that do? Is that going to totally change demographic trends in Massachusetts? No. But what it does do is update our rental tax deduction for the first time in 20 years. It does adjust our estate tax, which is the most onerous in the nation. It does increase property tax relief for senior citizens, which also hasn’t been updated in about 20 years.
So what we view that proposal as, in addition to focusing on housing production, investing in K-12 education and things that make Massachusetts a place where people want to be. It’s got to be that kind of holistic approach to make sure that we’re arresting some of these trends and thinking about some of the factors that go into location decisions.
And transportation, too; I think we all see the transportation challenges we continue to have in terms of traffic and reliability. That’s a factor we’ve got to focus on as well.