In 2014, at least $20 billion in income will shift between U.S. states.
In terms of wealth, the $20 billion income shift equates to about $100 billion in wealth, or about 0.2 percent of total wealth held by individuals and nonprofit corporations in the United States.
Most would think the $100 billion is accounted for by looking at taxes, industry demand, and other economic/industry conditions.
Would you think wealth shifting has anything to do with an area being a financial center?
If so, would you guess individuals are moving their wealth to places with financial centers or away from financial centers?
Here’s what the data look like, with blue counties seeing an increasing in wealth migration and orange counties seeing a decrease in wealth migration.
Financial centers: Western United States
The first is the western United States. Perhaps surprisingly, California counties are the big losers in the wealth game. Maybe California isn’t as desirable as some think.
On the positive end, individuals appear to be moving their wealth from California to southern Nevada/western Arizona, and, to a lesser extent, Utah, Wyoming, Idaho, Washington, and Oregon.
Financial centers: Northeastern United States
The second geographic map is the northeastern United States.
In the northeast, the biggest losers include counties in New York, Ohio, Michigan, and Illinois.
There are not a lot of winning counties in the northeast, with most of the wealth shifting south.
Financial centers: South United States
The third geographic map is the south.
Interestingly, the south has very few losers, with counties in Florida and the Carolinas being the biggest winners.
Financial centers: Middle United States
Lastly, the fourth geographic map is middle America.
Overall, not a lot of shifting to or from middle America.
Overall, the data clearly show a shift away from certain areas, chief among them California, New York, Illinois, Ohio, and Michigan.
As mentioned, it sure looks like wealth is shifting away from financial centers such as New York City, Chicago, Los Angeles, and counties surrounding these cities.
The most common responses are cost of living, high taxes, and a controlling political environment (high regulation). Others might being up climate, meaning, for example, that individuals are moving to Florida because of the warm climate for older Americans and changes in industry patters, such as the decline in the American auto industry as, for example, an explanation for wealth migrating from Michigan.
What’s interesting in all this is that the shift isn’t just a financial market boom/bust story. The trend is long-term.
The final answer is, of course, a combination of many factors, with financial industry activities perhaps not conducive to long-term wealth staying power. Apparently, individuals like to make their money in the financial industry and then move away.