Wisconsin Taxpayers Alliance

State Losing Population Though Migration

27,000 people migrated since 2010, as Wisconsin's workforce declines.

By - Sep 8th, 2016 03:17 pm
Are seniors moving to Florida for the warm weather? Photo by Dave Reid.

Are seniors moving to Florida for the warm weather? Photo by Dave Reid.

Wisconsin’s long-term economic success requires attracting as many as 300,000 people over the next 20 years just to maintain its workforce. However, the state has lost more than 27,000 people to migration since 2010, according to a study from the Wisconsin Taxpayers Alliance (WISTAX). The new report “Wisconsin’s Migration Challenge,” reviews IRS migration figures through 2014. WISTAX is a nonpartisan, nonprofit organization devoted to public policy research and citizen education. Wisconsinites move to other states at lower rates than residents of all but three states.

“This is the biggest economic question facing Wisconsin through 2040,” said Todd A. Berry, WISTAX President. “If we cannot attract enough people to grow our workforce, Wisconsin companies will expand operations elsewhere, and the state will look unattractive to companies looking to relocate.”

The report’s good news is Wisconsin is comprised of “stayers.” During 2012-14, an average of 1.9% of state residents moved interstate, compared to 2.6% nationally. Only Ohio, California, and neighboring Michigan had lower rates. Outmigration rates for Wisconsin’s other neighbors were also low: Minnesota (1.9%, 46th), Illinois (2.2%,42nd), and Iowa (2.3%, 40th).

The state’s challenge is in attracting residents of other states. While our rate of leavers is low, Wisconsin attracts migrants at an even lower rate. During 2012-14, an average of 1.7% of state residents move here from elsewhere. Wisconsin ranked 45th on that percentage.

The latest IRS figures show Wisconsin has been a net loser to migration in every year during 2005-14, though annual losses have been modest. In 2014, the state lost about 10,000 more people than it gained, a relatively small figure for a state of more than 5.5 million people. That the state was a net loser is not surprising as IRS figures show a pattern of people moving from the north and east to the south and west.

WISTAX researchers note that two-thirds of Wisconsin’s interstate migration activity is with just 10 states, its four neighbors and Florida, Texas, California, Arizona, Colorado, and Indiana. During 2012-14, Wisconsin was a net gainer with Illinois (+14,032), Michigan (+930), and Iowa (+124), but a net loser with the other seven states.

Despite a low rate of leavers overall, high-income retirees appear to be leaving Wisconsin in disproportionate numbers. Among those 26-34, the percentage with incomes above $100,000 was about the same among leaving the state and those remaining here. However, among those 65 or older, 21.0% of those leaving the state had family incomes above $100,000, compared to only 14.1% of those who stayed. The gap was similar for those 55-64 (32.3% vs. 26.5%).

For state leaders, the pressing question is how to attract new residents. Migration research shows labor market conditions are associated with moving. While the state’s 2015 unemployment rate was below the U.S. average, 18 states had lower rates. That stands in contrast to 1992-99, a period when the state’s unemployment rate was one of the 10 lowest and Wisconsin was adding people via migration.

For Wisconsin, private sector pay may be an issue. The IRS data show for those 26-44, movers had lower incomes but higher income gains than those who remained in state. This is not surprising since Wisconsin ranked 29th in average wages in 2015. Moreover, among 22 major occupational groups, average wages trailed the 50-state median in 16. The wage gap was as high as 14% among 10 high-paying occupations that require a college degree.

The IRS figures confirm anecdotal information: Seniors who move tend to relocate to warm-weather states, and high-income seniors are drawn to warm states with no income tax. This raises an important pair of questions: Are seniors who move doing so because of the weather, and then choosing a specific warm state based on other factors, such as income taxes? Or, are they leaving because of taxes, then choosing low-tax states with warm climates? If they are doing the first, then state officials can do little to mitigate outmigration of this group.

If seniors are leaving because of taxes, then state policy can stem the losses. However, reducing taxes on seniors means fewer state dollars to spend on schools or other public amenities that may attract younger populations.

Categories: Politics, WisTax

13 thoughts on “WisTax: State Losing Population Though Migration”

  1. David says:

    Lower property and income taxes and raise sales tax, gasoline tax and some fees. Then allow Milwaukee to add a sales tax so it can have a revenue source other than the property tax.

  2. Elisa says:

    It is interesting to hear about the target numbers needed to maintain the current labor force and the overall population trends in the state. But it seems there’s a misplaced emphasis in this article on the importance of retiree emigration.

    If the problem is maintaining adequate numbers to maintain the active workforce, keeping retirees in state is not be a direct concern, right? They’ve permanently withdrawn from the labor market. Their exodus would have an impact on the state’s tax base, which could have an indirect impact on the workforce, sure. But, as the article says much more quietly, the main issue is attracting (workforce-eligible) people from out of state.

  3. Well said Elisa says:

    Thank you for pointing out the big flaw in the article. Let’s answer the question of how to attract young college students.

  4. Sam says:

    Old people move to warm states and those states happen to have low taxes. Period. You can’t do anything about the weather (which isn’t even that bad).Chasing them with lower taxes will only degrade our infrastructure and school systems further, making the state less attractive (think Mississippi, but colder). There are plenty of states with “high” taxes and “bad” weather that have no problem attracting and retaining population.

    Those states do it by growing businesses in growing sectors. Wisconsin’s dependency on the manufacturing sector is doing it no favors in the long run.

  5. Vincent Hanna says:

    David so lower taxes that benefit the wealthy and raise taxes that harm the poor? That seems like a terrible idea. If extremely low taxes on businesses and the wealthy grew a state’s economy Kansas would have the best economy in the nation. Instead it’s at the very bottom.

  6. Vincent Hanna says:

    That’s right Sam. And some people won’t like to hear it but: http://www.nytimes.com/2016/07/31/opinion/campaign-stops/the-path-to-prosperity-is-blue.html

  7. Matt says:

    “The state’s challenge is in attracting residents of other states. While our rate of leavers is low, Wisconsin attracts migrants at an even lower rate”.

    If that’s your solution you are screwed. However, there are plenty of people with advanced degrees sitting in refugee camps all over the world. There was also a time when people from Mexico and Central America really wanted to get here. Of course we treat em like crap and deport their kids, but lets redouble our efforts to attract residents of other states with our newly crummy colleges, our ridiculous public schools, our general racial intolerance and the real nice wind and snow.

  8. DTY says:

    Sam, Vincent & Matt are on the right thread. But I think another challenge of out-migration is how it feeds the ongoing urban-rural divide in Wisconsin. Out-migration is clearly hurting the smaller communities more than the large cities and suburban counties. In the past, high-income Wisconsin residents might have retired to rural cities in the northern, western and central parts of the state. No more. Cities like Crandon, Ashland, Rhinelander and Elroy are losing population; Hudson, Madison, Oak Creek and Oconomowoc are still gaining (and plenty).

    The small, rural cities that are losing population to out-migration and other causes are now struggling to keep their grocery stores and fund their local roads, parks and schools. Nobody ever wants to unpave a road, close the restrooms in a park or downsize a school, but it takes proportionally more public resources to maintain the same level of services when population is declining.

  9. David says:

    Vincent…… yeah that’s exactly what I said. Ugh

  10. Vincent Hanna says:

    That’s exactly what you said considering who is directly impacted when you lower property and income taxes and raise the sales and gas taxes along with other fees. It doesn’t take an economist to know that.

  11. Paul says:

    We moved south because of the weather but must admit income tax and real estate tax influenced our final choice.

  12. Cynthia says:

    I have three college educated adult children who found more attractive employment opportunities in other states. Wisconsin has stopped being a progressive state. The infrastructure is crumbling. Education is no longer a priority. There is an pernicious meanness in our legislature. I will be joining two of my children out of state as soon as I am able too.

  13. Robert says:

    Maybe the first thing to do is kick right-wing Walker out the mansion? You think highly educated people who tend to be more liberal, and open mined are going to pick up and move to a state that is closed-mind and full of bigots?

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