America's Bipolar Population Shift

One common interpretation of the 2010 Census figures was that U.S. migration patterns resembled a river flowing generally from Massachusetts to Arizona. The stats seem to cooperate with the story. Families flowed from expensive, blue, northeast and settled in the cheap, red Sun Belt. Texas and California -- the top state destinations -- added 7.5 million people in the last 10 years, more than the all the folks in Massachusetts and Vermont combined. Arizona and Nevada led the nation in percent growth, adding nearly a third of their year-2000 population in a decade.

What's behind the south-by-southwest current? Economist Ed Glaesar, writing for the New York Times, says, Sunshine and lax regulations. In the northeast, living is expensive, housing is expensive and regulations hurt building construction. In the Sun Belt, by comparison, living is cheap, houses are plentiful, land is plentiful, and regulations are lax...

Housing regulations, more than those that bind standard businesses, explain the Sun Belt's population growth. If New York and Massachusetts want to stop losing Congressional seats, then they must revisit the rules that make it so difficult to build. High prices show that the demand would be there if the supply is unleashed.

Whatever the reasons for this wave, it's important to remember that it has partially crashed, already. The migration south and west rode a housing bubble that grew largest in California, Florida, Arizona and Nevada -- all of which are in the top three in either most people added or most percentage.

But look what happened when the bubble burst. Nevada was the country's fastest-growing state for almost 20 years until 2006, USA Today reported. But in 2010 its population will fall an estimated 2.6% -- the largest annual drop for a state since the post-Katrina exodus from Louisiana. In Arizona, population growth through the first half of 2010 had fallen 50% from its 2004 high. The housing bubble giveth, and it taketh away.

Meanwhile, America's college graduates with bachelors degrees or higher have been moving to the coasts, like salmon swimming upstream against the southwesternly current. As Richard Florida wrote for us, "talented, highly-skilled and highly educated people are clustering in and around America's major cities [on the coasts]." Check it out:

The Feet are moving south and west while the Brains are moving toward coastal cities. Settled in the megatropolises, highly-educated high-earners are contributing to higher costs-of-living and higher home prices -- both of which are prohibitive for middle-income families looking to relocate. As the cities attract highly educated talent -- and, like magnets, talent attracts talent -- a divide potentially grows between the sun-soaked plains and the expensive cities.

I am not suggesting that "brains" are, for whatever reason, categorically rejecting Texas, Georgia or the southwest. Rather, I want to point out that we should be careful about drawing sweeping conclusions from the Census 2010 numbers and the southwest migration because (1) the busting housing bubble is baked into these figures and (2) America's most highly educated people are largely not following the current pulling most Americans toward the sun.