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Labor Force Migration

Katie Paton and E.C. Myers

 

The proportions of the locations of the work force in the United States are changing. The labor force is shifting from the Northeast and Midwest to the South and the West.

The West has had the largest percentage increase over the past 40 years. During the development of the United States, there have been different eras when jobs have been concentrated in certain regions. Recently, technology industry clusters have been popping up on the West Coast.  

The Multifactor productivity of manufacturing computer and electronic products has steadily increased since the late 1980’s. The industry gained momentum in course with Silicon Valley and other technological hubs along the west coast. This brought people from all over the US in search of jobs, particularly people from the Northeast, as is seen in their percentage population decline.  Industry clusters are groups of similar firms in a defined geographic area that share a common market. The Silicon Valley attracts many young technology professionals to the area due to start up companies such as Apple, Netflix, and Google.  These tech start up companies are creating an expressive culture that differs greatly from the East Coast’s work culture.

The East Coast’s developed financial market may have less room for growth than the developing West Coast’s technology market, but the past 40 years has shown a steady growth in the industry. The total assets in all commercial banks in the US has experienced a steady growth over the last 40 years. In January of 1976, when 31.6% of the US labor force was located in the south, the commercial banks had total assets of $918 billion US dollars. In December 2017, the percentage of the US labor force in the South had grown to 36.9% and the commercial banking assets had increased to $16,787 billion US dollars. While causation is not evident in these similar growth patterns, correlation is certainly evident. The South has experienced an increase in the labor force largely as a result of the growing commercial banking industry, prevalent in the south. For example, Charlotte, NC is the 2nd largest financial center in the US.

Having new industry clusters is good for the local economy as it brings jobs to the area. This growing market will increase GDP, increasing the income of technology employees, and increasing the consumption, creating a cycle to help the United States economy.

-Katie Paton & E.C. Myers

17 thoughts on “Labor Force Migration

  1. radcliffec20

    What a cool post! Your explanation for the east to west migration pattern makes a lot of sense, and the way you relate the last graph about total assets to the importance of industry clusters is really interesting. I wonder if some new industry will pop up in the Northeast that will allow some people to eventually return back to that region...we'll see!

  2. clintong20

    This is definitely an incredible phenomena! I find it interesting how you relate geographical positions to real economic welfare. Additionally, the west coast's technological market is on a large boom, is it possible that this could expand the financial market on the east coast?

  3. bearupk20

    Such an interesting post! The relationship geographic changes in industry and migration is something I don't give much thought to, so thank you for highlighting this. It makes me wonder that as industries and the economy change if we will see migration grow in different regions. If I were to guess, I would bet that our society will witness a change in this at some point.

  4. longa20

    This is very interesting, as I am from the northeast and did not realize that the population has declined due to the job market. It is interesting to look at how different job sectors are centralized in different hubs like the finance in the east and technology in the west. It will be interesting to follow this trend in the future as it will most likely have an impact on where our generation and those to come will live.

  5. the prof

    At the same time that we see these sorts of regional shifts, we are also seeing lower mobility at the individual level: on average people move a lot less than they did 25 years ago. Beyond seeing the occasional graph, though, I don't know details – how big a change and so on. Nor do I know if it matters – the "so what" question.

    1. laytonr20

      So the implication would be that the financial centers are shifting without the people themselves moving? Could this be a result of different people entering the workforce? Fewer people from the old centers of finance, and more people from places like Charlotte, which resulted in more companies putting up branches there to match with the growing employee pool is? I don't know without the research, but I can see that being a part of the process.

  6. Jimmie Johnson III

    I think this post is very interesting. The same way different countries specialize in different things, different regions of the US are beginning to specialize in different industries. Especially as my class starts thinking about jobs soon, it seems the industry we choose to go into will play a huge roll into where we live.

  7. Lauren Fredericks

    These graphs certainly reflect what I've experienced growing up in Silicon Valley, CA. It never seems to stop growing. Even the Great Recession barely paused the booming real estate market, and prices bounced back within a year or so as people continued flooding into the area and demanding housing.

  8. spencerc20

    It's interesting to see how labor migration in the US has been affected by the convenience of where markets are located. It would also be interesting to see how these migrations would have been affected if technology start-ups had been founded somewhere else in the country.

  9. warej20

    This was a very interesting post! I had known that the Silicon Valley was a hub for emerging tech companies, but I did not realize the extent of the regional shift towards the West. The prevalence of technology in today’s society certainly makes the new tech industry appealing to young skilled workers. I am curious to see if the Northeast will aim to enter a new industry of its own in hopes of bringing back workers.

  10. Chris Surran

    This was an incredibly interesting post. I am from Texas, and I there are several examples of companies moving their headquarter to the DFW metroplex area. It was interesting to see the empirical data behind this migration.

  11. the prof

    The biggest levels of migration today are in developing countries, as people leave the farm for the city. Since the early 1990s – the past 25 years – perhaps 350 million Chinese have migrated. Rates are increasing in India as well, and now cities in SSA (Sub Saharan Africa) are also exploding in size. That's a much bigger transition than moving from one city to another in the US!!

  12. moraifa19

    The labor force is shifting location to favor areas with increases in labor productivity as a result of technological advances resulted in more job opportunities because employers were able to get more output for a single worker with minimal added cost. Will the pendulum eventually swing and catch up to these employers though? so that the workers are paid higher for their work, and employers will hire less number of workers

  13. legarthb20

    This is a great article! It's amazing to see how much the West is growing and I wonder if the East will ever catch up. With booming in tech markets in Raleigh, Charlotte, New York and some other cities I hope that the labor force will eventually balance out and come back to the East coast.

  14. hallk20

    It will be really interesting to see how cities in the south react to this population growth. I wonder if more people are moving to the more urban areas like charlotte, atlanta, or orlando, or perhaps they are moving to other areas. As someone from Naples, Florida, we have seen our population boom since 2005. We have also seen countries such as Hertz move their company headquarters our way. This could partially be because Florida has no income tax. I wonder if other states in the south have low income tax or other rates such as that with entice companies to move their way.

  15. alisonw20

    I find it very interesting that the labor force is migrating to the south. I feel that the banking industry is spreading from the North, down the Atlantic coast, and into the South. Not only has Charlotte grown as a banking hub, but also Atlanta and Nashville. This will most likely continue, however the banking hub in the North will never die.
    Technology is most definitely the main pull for labor out west as many people in our generation are attracted to the west and the tech jobs that are more laid back that the traditional banking jobs.

  16. wickhamj20

    This is a very interesting post as I had no clue that there was a shift in labor occurring in the United States. Living in Charlotte, I've personally witnessed the growth and expansion of the city which makes sense given that the south's civilian labor force has increase 5.3% over the past 30 years. I personally think there is a correlation between the growth of the financial sector even though it has a limited ceiling with the movement to the south and the growth of the technology sector and movement to the west.

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