For decades, young people flocked to the country’s three biggest cities—New York City, Los Angeles and Chicago—to build careers before taking their talent and spending power beyond these metropolitan areas to raise families. That pattern now appears to be fading as more young workers are staying put in the big three.
From 2004 to 2007, before the recession, an average of around 50,000 adults aged 25 to 34 left the New York and Los Angeles metro areas annually, after accounting for new arrivals, according to an analysis of census data by the Brookings Institution and The Wall Street Journal.
The recession diminished this flow. Fewer than 23,000 young adults left New York annually between 2010 and 2013. Only about 12,000 left Los Angeles—a drop of nearly 80% from before the recession. Chicago’s departures dropped about 60%.
Young adults who moved to the three cities for school, internships or early jobs—or simply because it seemed cool—may now be stuck, said William Frey, a demographer at the Brookings Institution.
A confluence of factors is behind the decline. Many young workers who began their careers in the recession are struggling to find their footing. Some are delaying marriage and children. Mortgages are hard to get for those without pristine credit.
Increased financial insecurity—and reduced appetite for risk—may also play a role, especially for young people shouldering big student debts. Median earnings for full-time U.S. workers aged 18 to 34 have fallen nearly 10% since 2000, after adjusting for inflation, to below 1980s levels.
In tough times, finding well-paying jobs may be easier in the big cities, offsetting their relatively high costs of living.
The decline in departures by young American workers has important implications for the economy if it goes unabated. Roughly 1 in 7 young adults lives in America’s three biggest metropolises, which have outsize populations compared with most U.S. cities and together exceed the seven next-biggest metro areas.
If younger people move less, some could get stuck with jobs that aren’t good matches for them, reducing the economy’s productivity. Such effects could make America’s labor force less flexible and less able to compete internationally in an era of rapid technological change and globalization.
Without circulation of workers among America’s massive metropolises and the rest of the country, the economy also risks becoming less dynamic. Migration helps distribute the nation’s human capital and economic demand more widely, demographers say, allowing U.S. states with weaker economies to benefit from those with stronger ones.
(Excerpt above from the Wall Street Journal)