Opinion | Pandemic migration from big cities is helping US economy

However, the pandemic has caused this “bigger is better” concept to be significantly reconsidered. Suddenly, there was a downside to living so close together, and many people were able to work remotely. Now, the metropolis is not dead, but it has lost some of its luster.

Millions of Americans have immigrated in the past few years. The migrants were overwhelmingly people with college degrees, especially millennials with young children, and many wanted more space for less money. There was a mass exodus from expensive coastal cities, especially New York and San Francisco, to cheaper places like Phoenix, San Antonio, Jacksonville, and Charlotte.

Conventional wisdom suggests that this massive relocation would have been terrifying for the United States. Too much talent and money has left “superstar cities” for what the real estate industry calls “second-tier cities”: small vacation towns on the coast or in the mountains. According to traditional economics, this should lead to years of declines in growth and productivity, as the distribution of educated workers and capital becomes more diluted. However, there is reason to believe that the traditional view is wrong.

First, remote workers are still connected to New York, San Francisco, and other large cities. Video technology is now powerful and well accepted to enable virtual brainstorming and networking. People don’t have to live in the same zip code to exchange ideas or benefit from being near each other.

Second, America’s big cities don’t have enough housing. This is a crisis. That’s why even before the pandemic, people were moving to cheaper areas, especially in the South. Millennial migration during the pandemic has helped alleviate some of the urban housing shortage. The move also freed up a large amount of money. Migrants can now use some of the money they previously spent on high rents and expensive mortgages to start businesses, invest, and increase consumption.

Third, many people have moved to what I call emerging cities. Phoenix (population 1.6 million) and San Antonio (population 1.5 million) were already among America’s top 10 largest cities. Jacksonville and Charlotte are both nearing her 1 millionth resident mark. These places have almost the same creative and energetic atmosphere as big cities. There is no exact threshold of people or money that a city will reach at which point it will magically start becoming more productive. But it’s becoming harder to argue that someone living in Brooklyn is more productive and valuable to the U.S. economy than someone living in Charlotte.

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Additionally, increased government and private investment in semiconductors and green energy is driving increased capital infusions into places like Phoenix and Austin. It’s a mistake to ask, “What city will replace Silicon Valley?” The ideal is to spark niche innovations across the country.

“There’s a boom in entrepreneurship in the South and Sunbelt,” said Benjamin Glasner, an economist with the Economic Innovation Group. “People are moving to new places and realizing the opportunities.”

Additionally, Americans are generally more satisfied with their jobs than they have been in decades. Many people have used the Great Reappraisal to change jobs and find higher-paying jobs that better fit their skills and interests. People who have moved or worked remotely, at least some of the time, report a better work-life balance due to shorter commutes. All of this helps increase productivity.

The pandemic has changed society in ways that we are only beginning to recognize and understand. This has led many people to take risks in search of a more fulfilling life. Americans are starting businesses at a rate not seen in decades. Despite high interest rates, growth has been surprisingly strong. And we are seeing early signs of a productivity boom similar to the 1990s. Productivity may increase with artificial intelligence, but the impact of improved employee well-being and, in some cases, large-scale relocation should not be underestimated.

That’s not to say everything is rosy. Now some people are regretting their cross-country move. And housing shortages and steep rent increases, once a problem primarily in New York City and San Francisco, have become common across the country, especially in Florida.

But the hidden strength of the U.S. economy has long been its ability to adapt. The reason this country emerged from the crisis stronger than many other regions is because American workers and businesses were able to shift quickly. Now, it turns out, remote work and large-scale relocation are spreading the benefits of megacities across the country. Imagine a time when productivity increases and lifestyles improve in even more areas.