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Virginia’s urban crescent, the golden goose that powers the state’s economy, is becoming poorer.
That may not be evident when you drive down Interstate 66 and see one gleaming high-rise after another, but it is when you look at the latest data from the Internal Revenue Service that tracks the number of people moving in and out of a particular locality.
I reported earlier that most localities in the urban crescent are seeing more people move out than move in. But that’s only half the story. The other half deals with the income levels of both groups.
Eight localities in Northern Virginia – Arlington County, Alexandria, Fairfax County, Loudoun County, Manassas, Manassas Park, Prince William County, Stafford County, basically everything except Fairfax city and Falls Church – are seeing that the people who move out make more money than those who move in.
The same for Richmond and all its suburban counties, except for Hanover County: Chesterfield, Henrico, Goochland and Powhatan.
And in Hampton Roads, all but one locality are seeing that the people moving out are making more than the people moving in. Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth and Suffolk are those who are on the losing end, income-wise. Only Virginia Beach sees that the newcomers make more than those who are leaving.
Some of this shouldn’t surprise us when we think about how people live their lives. Imagine someone who starts their life in a city apartment. As they do better economically, they move out to the suburbs – so central cities should expect to see those moving in making less than those moving out. They may want to close that gap but it’s just a natural thing. However, what we’re seeing here is more than that: We’re seeing this trend of the leavers making more than the newcomers spread out to affluent suburbs. With only a few exceptions – Fairfax city and Falls Church in Northern Virginia, Virginia Beach in Hampton Roads – we’re seeing the entire urban crescent slowly getting poorer, at least as far as the people moving in or out are concerned. (In theory, those who remain could suddenly get lucky in the stock market.)
This isn’t purely an urban crescent phenomenon. Lynchburg and Roanoke are also seeing the same thing, although they’re central cities, so, as noted before, that’s to be expected. However, we’re also seeing suburban Roanoke County, along with Campbell County outside Lynchburg, with newcomers who make less than those who are moving out. It’s the urban crescent that gets our attention, though, because that’s where the state’s political and economic power is. Let’s face it: If rural Virginia were growing poorer through out-migration, not many people would care. When the urban crescent does, we all should – because rural Virginia counts on the prosperity of urban Virginia to fund its school systems and lots of other programs. (Most rural school funding comes from the state; most state revenue comes from the income tax; you can do the math from there for why Lee County should care about Loudoun County, whether it wants to or not.)
The IRS data can give us lots of numbers; it just can’t give us the motivations behind these moves but we looked at some possible ones last week. Many of the people moving out of the urban crescent appear to be retirees. Others appear to be moving for better job opportunities elsewhere.
For those of you who like to see numbers, here are the numbers.
Statewide, those moving in during 2020 had an average adjusted gross income of $78,435; those moving out were at $84,517. When I look at those numbers, I tend to think that maybe Gov. Glenn Youngkin is right when he says we need to get the Virginia economy “moving again.” I can’t speak to whether his solutions are the right one, but there does seem to be a fundamental problem here that doesn’t show up in the usual employment statistics.
Here at the numbers on a region-by-region basis:
Arlington County: $93,428 in; $112,206 out
Alexandria: $85,817 in; $97,541 out
Fairfax city: $91,883 in; $82,206 out
Fairfax County: $99,374 in; $106,356 out
Falls Church: $117,448 in; $114,907 out
Loudoun County: $107,502 in; $115,254 out
Manassas: $57,574 in; $59,094 out
Manassas Park: $52,654 in; $61,579 out
Prince William County: $68,920 in; $78,645 out
Stafford County: $68,298 in; $73,467 out
Chesterfield County: $66,721 in; $68,900 out
Goochland County: $120,150 in; $127,054 out
Hanover County: $72,842 in; $71,973 out
Henrico County: $69,976 in; $71,353 out
Powhatan County: $96,650 in; $104,923 out
Richmond: $60,334 in; $65,977 out
Chesapeake: $56,288 in; $61,922 out
Hampton: $41,310 in; $45,412 out
Newport News: $41,702 in; $47,066 out
Norfolk: $46,258 in; $48,067 out
Poquoson: $69,666 in; $89,536 out
Portsmouth: $39,496 in; $45,453 out
Suffolk: $58,652 in; $60,398 out
Virginia Beach: $59,992 in; $58,012 out
Against this backdrop, several things stand out.
First, much of rural Virginia is seeing the exact opposite trend. Not only is most of rural Virginia seeing more people move in than move out, most of those localities are seeing the newcomers bring more money than those who are leaving. This seems remarkable on many levels. Whether it’s enough to be truly transformative we may not know for decades, but we know this much: We are seeing some incremental changes – and keep in mind that this data is from 2020, so it predates the pandemic and the advent of the Zoom Era.
There are surprisingly few localities in Southwest and Southside that are effectively exporting income.
One of the hardest cases is Buchanan County. While most other coal counties are now seeing more people move in than move out, Buchanan County is still seeing net out-migration – and that out-migration is accelerating while the in-migration is decelerating.
In 2018, 531 people moved in; 548 moved out.
In 2019, 419 people moved in; 562 moved out.
In 2020, 350 people moved in; 652 moved out.
In 2020, those moving in made $34,197; those moving out made $44,334. That’s a pretty big gap – $10,137. Here’s another way to look at that. Not only did Buchanan County lose a net of 302 people, it suffered a net loss of $3,061,374 in income. That’s a lot of spending money moving out. Buchanan County is not a county that can afford to lose more than $3 million in income through people loading up the moving van – that has a ripple effect, a negative one, across the county’s entire economy. Fairfax County may not immediately notice the economic impact of its negative migration shifts, but Buchanan County sure does.
Of note: The biggest single group of people moving into Buchanan County came from out of state, and they averaged $29,795. We don’t know which state, just that these people were also from the South. Since most people don’t move very far, we can surmise that many of these poor newcomers were probably from Kentucky and/or West Virginia. (Pike County, Kentucky, and McDowell County, West Virginia, both saw themselves becoming poorer through out-migration, too.)
Meanwhile, the most affluent people leaving Buchanan County moved to Washington County – 60 exports averaging $64,333 – so, broadly speaking, poorer people moved in from across the state line, while more well-off people moved to the Abingdon area.
Still, it’s important to note that Buchanan County is one of the few exceptions to the trend of population shifts helping rural Virginia. Much of Southwest and Southside is seeing patterns like, well, how about Washington County?
In 2020, Washington County saw 2,539 people move in and 2,249 move out – a net gain of 290 people. The average income of those moving in was $56,934; of those moving out $53,459 – so Washington County effectively made money on the population shifts – a net gain of more than $1 million in income moving into the county.
That’s a pretty typical income gap between the newcomers and the outbound – $3,475 in Washington County’s case. Some localities see smaller ones. In Pittsylvania County, it was $1,625. In Lunenburg County, it was just $137. But some localities – most near or west of the Blue Ridge – saw much bigger income differences between those moving in and those moving out.
In Carroll County, those moving in averaged $47,819; those moving out averaged $42,565 – a difference of $5,254. With a net gain of 277 people, that’s a net income increase of $1,455,358
In Scott County, those moving in averaged $46,612; those moving out averaged $41,137 – a difference of $5,475. With a net gain of 157 people, that’s a net income increase of $859,575.
In Botetourt County, those moving in averaged $66,580; those moving out averaged $60,989 – a difference of $5,591. With a net gain of 611 people, that’s a net income increase of $3,416,101.
In Amherst County, those moving in averaged $48,631; those moving out averaged $42,228 – a difference of $6,403. With a net gain of 322 people, that’s a net income increase of $2,061,766.
In Patrick County, those moving in averaged $45,682; those moving out averaged $37,539 – a difference of $8,143. With a net gain of 59 people, that’s a net income increase of $480,437.
In Highland County, those moving in averaged $76,711; those moving out averaged $65,233 – a difference of $11,478. With a net gain of 31 people, that’s a net income increase of $355,818 – a not insubstantial figure in a county with fewer than 2,300 people.
In Bath County, those moving in averaged $66,839; those moving out averaged $53,451 – a difference of $13,388. With a net gain of 18 people, that’s a net income increase of $240,984.
In Rockbridge County, those moving in averaged $75,323; those moving out averaged $55,208 – a difference of $20,115. With a net gain of 273 people, that’s a net income increase of $5,491,395.
With this sampling of figures, I hope I’ve demonstrated one point: These net in-migrations don’t just add more people, they generally add more disposable income into a county’s economy. Not all that money will get spent there, of course, but if some is – income that wouldn’t have been spent previously – then that constitutes real economic development for anyone who owns a business (or works in one and depends on the economic health of that business to put food on the table). Yes, that’s trickle-down economics but in some of these counties it doesn’t have to trickle far.
Now we get to the biggest disparities of all. Five counties post mammoth disparities, with those moving in making anywhere from $32,591 to $118,756 more than those moving out. All five are rural and all five have one thing in common: They’re on the water. Just different bodies of water. Two are on Smith Mountain Lake, three are along the Chesapeake Bay. I’ll introduce these by ascending income levels:
In Franklin County, those moving in averaged $101,861; those moving out averaged $58,373 – a difference of $43,488.
In Bedford County, those moving in averaged $102,485; those moving out averaged $64,708 – a difference of $37,777. (To be fair, Bedford sees growth from more than just the lake; it also sees a lot of growth around Lynchburg.)
In Northumberland County, those moving in averaged $112,561; those moving out averaged $79,970 – a difference of $32,591.
In Mathews County, those moving in averaged $108,249; those moving out averaged $61,618 – a difference of $46,631.
And finally we come to Lancaster County, where those moving in averaged $186,200 and those moving out averaged $67,444 – a difference of $118,756.
The only other Virginia locality where people moving in make more than $100,000 a year is Loudoun County, often ranked as the most affluent county in the country. Those moving into Loudoun in 2020 made $107,502.
Loudoun’s numbers make sense; the numbers for the four rural localities are more surprising. So who are these affluent newcomers?
The most reasonable guess is that these are probably retirees, although Northumberland County ranks in the state’s top 10 for remote workers and other counties along the Chesapeake Bay rank high for remote workers, too, so we probably shouldn’t jump to too many conclusions.
Now let’s look at the economic impact in each of those counties.
Mathews County saw a net gain of 80 people, so that means a net income increase of $3,730,480.
Northumberland County saw a net gain of 319 people, so that means a net income increase of $10,396,529.
Lancaster County saw a net gain of 180 people, so that means a net income increase of $21,376,080.
Franklin County saw a net gain of 701 people, so that means a net income increase of $30,485,088.
Bedford County saw a net of 1,433 people, so that means a net income increase of $54,134,441.
Here’s another way to measure that: Fauquier County, the closest county to the Northern Virginia suburbs to see both net in-migration and higher-income people moving in, saw a net income increase of $12,204,720. Franklin County’s was 2.4 times that. Bedford County’s was 4.4 times that.
There is nowhere else in Virginia where population shifts are having a bigger impact, economically speaking, than in Bedford County and Franklin County. Not everyone benefits from that, of course – that’s not how our economy works – but when we look at the county level these are the two counties seeing the biggest influx of income.
Fairfax County, with its population outflows, had $99,430,662 in income leave the county in 2020. Bedford and Franklin together saw an increase of $84,619,529.
Here’s part of the reason why: Franklin County had 2,836 people move into the county during 2020. Of those, only 73 were from Fairfax County – but collectively they were the most affluent group moving in, bringing an average income of $224,429. Bedford County had 5,568 people move in during 2020. Of those, only 58 were from Fairfax County – but once again, they constituted the most affluent group of newcomers, with an average income of $252,769.
Not every locality in this part of the state attracting Fairfax expatriates drew people making that kind of money. The former Fairfax County residents who moved to Lynchburg averaged $59,867 – but that was still about $10,000 more than the average newcomer to the Hill City. Likewise, the former Fairfax County residents who moved to Roanoke averaged $71,563, about $25,000 more than the average newcomer to the Star City.
My takeaway: If localities in Southwest and Southside want more people moving in, they should do a better job of marketing themselves to the part of the state that’s exporting the most people – Northern Virginia. And if they want to bring new money into the county, they really need to focus on all those people moving out of Fairfax County. That seems a surer economic development program than many others.
Coming tomorrow: The lessons we should draw from all this data.