New census data shows a switch: More people are now moving into Virginia than out

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When Gov. Glenn Youngkin spoke at the announcement that Microporous would locate a battery plant in Pittsylvania County and create more than 2,000 jobs in a part of the state that’s been working for a quarter-century to rebuild a shattered economy, he said all the things you’d expect a governor to say under such circumstances.

How Virginia is a great place to do business. How Virginia out-competed its archrival North Carolina for the project. How multiple governments — local, state and federal — worked together for years to make this happen.

He also said something no Virginia governor has been able to say for at least nine and maybe 11 years: Virginia now has more people moving in than moving out.

Of all the governors I’ve ever followed (and I’ve met every Virginia governor from Mills Godwin onward), Youngkin is the only one I’ve ever heard talk about the domestic migration figures that the Census Bureau tracks. Of course, many of those governors didn’t have to do so. Virginia has historically been a state that has seen more people move in than move out (net in-migration, to use the technical term). Starting in 2014, that changed and Virginia started seeing more people move out than move in (net out-migration). Virginia’s population was still growing, just not as quickly, because births outnumbered both deaths and net out-migration, but if more people are moving out than moving in, doesn’t that suggest there’s some kind of problem? 

On the campaign trail for governor, Youngkin said it did and pointed out that this out-migration began once Virginia had a Democratic governor. Whether the cause and effect is that simple is a matter of dispute, but the facts are indisputable. Virginia did start exporting people. 

Here’s where things get a little complicated. There are multiple agencies and multiple ways to measure this. They all agree on the big picture, but the details vary.

The Census Bureau’s American Community Survey says Virginia’s out-migration started in 2014, rebounded to in-migration in 2015, then slipped back into out-migration until the most recent figures, which are for 2023.

The Census Bureau also produces an annual Population Estimates Program. Those figures show the same trends but different numbers because they’re based on different data. The population estimates show Virginia has had out-migration every year since 2013, period. 

Meanwhile, the Internal Revenue Service tracks where people file their income taxes from. That data shows Virginia out-migration started a year earlier than the Census Bureau survey says — in 2013 — and continued through 2022. The IRS data runs behind, so the 2023 figures aren’t out yet. Also, keep in mind that all this data comes out at different times so may not be measuring quite the same year. The IRS, for instance, operates off a calendar year. The census does not.

Here’s a more visual representation, just minus the IRS data. This shows how the two different sets of census data, while showing different numbers and coming out a different times, have the same trends:

Confused? Don’t drown in the data, just pay attention to the trendlines. Whether in 2013 or 2014, Virginia flipped from being a magnet for people to an exporter of people. In recent years, the net number of people leaving has slowed and now the ACS survey shows Virginia is attracting people again. We won’t know until later this year whether the IRS says its year-old data confirms this, and we won’t know until next year whether the Census Bureau’s population estimates confirm this. However, one Census Bureau measure says Virginia is gaining people again. So does a separate report from the Weldon Cooper Center for Public Service at the University of Virginia. 

That’s why Youngkin is now including this trend as one of his regular talking points whenever the topic turns to economic development.

Four years ago, Virginia ranked 38th in the nation — only 12 other states had more net out-migration. Now Virginia ranks ninth — only eight other states have more net in-migration. 

“That is huge,” Youngkin said during a recent interview. “The biggest shift is people choosing to stay rather than leave. That is hugely encouraging for me. … We now have a really important data point. From four years prior, all of a sudden now we have a massive number of people who want to stay here.”

The specific numbers: In 2019, Virginia had net out-migration of 11,994 people. Now, the American Community Survey shows a net in-migration of 22,921 people. 

Two-thirds of that change is driven, as Youngkin said, by a decrease in the number of people moving out of state. In 2019, Virginia had 276,849 people move out. That number actually swelled to a record 282,050 in 2022. That’s more than the entire Roanoke Valley moving out in a single year. For 2023, that figure fell to 253,240, which still sounds like a lot but is the smallest number of people moving out of state since 2013.

At the same time, the number of people moving into the state grew to its highest level since 2015 — up from 264,855 four years ago to 276,161 last year. That’s 23,609 more people choosing to stay and 11,306 more people choosing to move in. That shift in both columns is what has moved Virginia from one of the nation’s biggest people-exporters to one of its biggest importers.

Not surprisingly, Youngkin attributes this to his policies. “That is built on a government that respects them …  that brings tax burdens down. More jobs so they can see a future here. Guess what? People vote with their feet.”

Feel free to debate whether that’s really the cause, but the data does show that people are, indeed, voting with their feet. Here are some of the things that are helping drive Virginia’s demographic turnaround. One is more negative, the other more positive.

Rising interest rates have slowed home sales — and the number of people moving

Nationwide, the number of people moving anywhere has dropped. “Rising interest rates depress the number of home purchases and slow migration,” said Hamilton Lombard, a demographer with the University of Virginia’s Weldon Cooper Center for Public Service. “This is likely helping Northern Virginia keep more residents that might have otherwise moved away to purchase a home. During the late 1990s, mid-2000s and late 2010s, rising mortgage rates coincided with a slowdown in migration from Northern Virginia and other large, high-cost metro areas. When interest rates fell, migration increased from Northern Virginia and most other large, high-cost metro areas.”

Still, people do move: More than 7.55 million nationwide last year moved out of their home state — and 24 states saw the number of people move out increase from 2019, the last pre-pandemic year. Virginia, by contrast, saw the number of people move out fall, so something was keeping those people here that wasn’t keeping people in 24 other states. Three of our neighboring states — Maryland, Tennessee and West Virginia — all saw an increase in people moving out. We did not, so this was not purely a case of Virginia getting lucky, demographically speaking, with high interest rates that discouraged moving. Something caused more people to move here rather than some other state.

Here might be one big reason why Virginia is now the one drawing people:

Virginia’s job growth now tops the national average

Virginia’s job growth has historically lagged behind both the national average and that of our big neighbor to the south, North Carolina. Since 2010, Virginia has only topped both the national average and North Carolina once — in 2015, according to the U.S. Bureau of Labor Statistics.

In 2023, Youngkin’s second year in office, Virginia’s job growth rate ran better than North Carolina’s for the first time in eight years, although it lagged behind the national rate. So far this year, Virginia is running ahead of both. Since the population charts above go back to 2013, that’s where we’ll start this one:

Youngkin promised a “rip-roaring economy.” You can decide for yourself what “rip-roaring” is, but, statistically speaking, Virginia is no longer an economic runner-up to its big economic rival. 

That, of course, raises the question as to what’s spurred job growth in Virginia. Youngkin says it’s a “combination of things” and not just his desire to cut taxes. We’ll come back to the tax question but here are some other things that are helping Virginia retain, and attract, more people.

* * * 

5 reasons behind the state’s job growth

1. Virginia has a new growth center: the Richmond metro

We have long been accustomed to Northern Virginia as the state’s population growth engine. Now population growth in Northern Virginia is slowing, but we’ve seen the emergence of the Richmond metro as the state’s fastest-growing region. Since 2020, the fastest-growing locality in the state is New Kent County, east of Richmond, where the population is up 11.9%. The locality with the biggest numeric change is Chesterfield County, south of Richmond, which has added 23,155 people. 

The Richmond metro is likely to grow further: The region has been growing as a pharmaceutical hub on its own and is now getting some acceleration from the federal government. In 2022, the Richmond-Petersburg metro was awarded $52.9 million as part of the Biden administration’s Build Back Better Challenge for advanced pharmaceutical manufacturing. Last year, it was named one of 31 technology hubs in line for millions more in research and development funding. 

2. Much of rural Virginia is seeing a demographic renaissance

Since the pandemic, rural areas across Virginia have seen a dramatic shift: Most rural localities in the state are now seeing more people move in than move out. Many of them are still losing population, but that’s solely because, with aging populations, these counties have more deaths than births, so many deaths that they outnumber the newcomers, as well. Still, while once these counties had moving vans going out, they now have moving vans moving in. It’s difficult to understate how important this shift is.

There are lots of reasons why this rural migration is happening, but here’s one driver:

3. A growth in domestic manufacturing is helping stabilize populations in some places

We’re not seeing a big growth in manufacturing, but we are seeing some, according to the Federal Reserve. The effects of that are seen most noticeably in smaller communities. 

“The increase in domestic manufacturing is helping increase migration to small manufacturing towns, including Danville and Martinsville, while the revival of nuclear power has caused migration to Lynchburg to reach the highest levels since Liberty University was being built out in the 2000s,” Lombard says.

Along the way, we’re seeing some remarkable changes: Many rural localities are now seeing their median ages drop. Martinsville and the city of Franklin have grown younger at a faster rate than any other localities in the state. 

Last week, Youngkin announced that Microporous, a Tennessee-based battery company, will build a plant in Pittsylvania County that will employ more than 2,000 people when it opens in 2026. Pittsylvania County is currently losing people through out-migration; Henry County next door has the highest net out-migration of any rural locality in the state. An economic engine such as Microporous seems likely to reverse both those trends. (See my column last week on the subject.) 

4. Federal employment in Virginia has grown

The federal government is the state’s single biggest employer, and that employer has grown bigger. “Federal employment in the D.C. region has grown slightly since 2020, after falling during Obama’s second term and Trump’s first term,” Lombard said.

Here’s a chart that visualizes how federal employment in the state has grown:

There’s an interesting corollary to the growth of the federal workforce in Northern Virginia. 

5. Remote work has helped Virginia hold onto some workers it might have otherwise lost

Northern Virginia is a complicated place. It’s now seeing more people move out than move in. Lombard suggests that remote work (along with high housing costs) is a reason: “With remote work persisting, the number of high salary federal employees who have moved out of the region has steadily increased according to Census microdata, which is helping prevent Northern Virginia from returning to positive domestic migration but, perhaps counterintuitively, this trend may be helping Virginia return to positive domestic migration.”

In other words, many of those remote workers have simply moved to other parts of Virginia. We’ve also seen a growth in remote workers in rural counties along the Chesapeake Bay. We’ve seen lesser growth, but growth nonetheless, in the number of remote workers around the Roanoke Valley. “Because remote workers often have to make trips to their central office for meetings, Virginia’s proximity to D.C. and the Northeast Corridor gives it a significant advantage in attracting remote workers over North Carolina or other Southeastern states,” Lombard said. 

* * * 

The role of taxes in migration

So, do taxes matter? Republicans historically say they do; Democrats say that other things — education, transportation — matter more. 

“The reality is when you look at the top 10 states [for net in-migration], they all have some pretty common characteristics,” Youngkin said. “They are predominantly states with lower taxes and massive job growth. When we look at the bottom 10, we see the opposite. We see California and New York and Maryland, New Jersey and Illinois — all in the bottom 10. What are they doing? They’re taxing people more, making it harder to live there. They’re raising regulatory burdens on business.”

Here are the top 10 states for net in-migration in 2023; all but Indiana are in the Sun Belt:

Here are the bottom 10 states for out-migration in 2023; the numbers go to 51 because the Census Bureau includes the District of Columbia:

Youngkin said Virginia’s transition from net out-migration to net in-migration is “a huge shift for Virginia because now we’re competing with North Carolina, Tennessee, South Carolina, Georgia, Florida, Texas because, guess what — those are all in the Top 10, and I’ve got to compete with them every day because otherwise people will go there. … This is just a clear, clear truth, and I’ve been talking about this since the day I got on the campaign trail.”

Are these states seeing job growth and population growth because they have low taxes and fewer regulations? Or because they’re warm states where people don’t freeze in the winter? Or some combination of the two, or something else entirely?

We will not resolve the debate between taxes and services today, but we can look at some basic facts.

• Only one of the states in the Top 10 for net in-migration has a higher income tax rate than Virginia (South Carolina, where the top rate is 6.5% vs. 5.75% in Virginia). Three (No. 1 Texas, No. 2 Florida and No. 10 Tennessee) have no state income tax at all.
• However, they all have higher sales taxes than Virginia. (Tennessee, which has no income tax, has the highest sales tax in the country, at 9.55%.)
• California, which has the nation’s highest net out-migration, also has the highest state income tax and the eighth-highest sales tax. New York, which has the nation’s second-highest out-migration, has the nation’s third-highest state income tax and 10th-highest sales tax.

To the extent that Virginia is primarily competing against other states in the Southeast, we are competing against states with lower income taxes (but higher sales taxes). 

The role of housing

Different people will have different opinions as to what the ideal population growth rate is. If more people move in, we need more housing for them to live in. Even if more people don’t move in, we need more housing for them to live in. I always like to cite the example of the hypothetical town with just one house, occupied by a family of four. The two children grow up and move away, so the population falls by one-half, to two. One of the adults passes on, so now the population has fallen again. A new family wants to move to town but needs a house — so here’s a town where the population has fallen by 75% yet has a housing problem. If Virginia is to stay on the net-plus side on domestic migration, it will need more housing, with all the zoning controversies that come with that. 

Youngkin last week announced an initiative to use $15 million to accelerate home construction through grants and loans to nonprofits, local governments and other government organizations such as planning districts and economic development authorities. The program targets communities within a 30-minute drive of new jobs announcements. At last week’s announcement of the 2,000-plus job Microporous site in Pittsylvania County, Youngkin said: “I think every time we do one of these we should have a housing announcement that goes along with it.” 

What happens next

Here’s a thought experiment for the candidates running to succeed Youngkin:

• Why is Virginia’s job growth rate now higher than North Carolina and the national average? Is that accidental or a result of Youngkin’s policies?
• Likewise, why has Virginia reversed its migration trends? Is that accidental or a result of Youngkin’s policies?
• What should the state do to continue these trends? What could the state do that would endanger them? 
• What is the ideal population growth rate? How can we reconcile that with localities that don’t want to see a lot of additional population growth?
• How can we promote more housing development, especially when many localities (both Democratic and Republican) have resisted rezoning for some housing projects?

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