Coastal Cities Priced Out Low-Wage Workers. Now College Graduates Are Leaving, Too.

The college graduates who fill white-collar jobs in the San Francisco area began to leave in growing numbers about a decade ago. More and more have moved to other parts of the country — an accelerating outflow of educated workers that, in a poorer part of America, might be thought of as brain drain.

When the pandemic arrived, these departures surged so sharply that the San Francisco area has lately lost more educated workers than have moved in:

Over this same time, a similar pattern has been taking shape on the other side of the country:

And in the New York area, long a net exporter of graduates, swelling losses have reinforced the trend: Educated workers, dating to even before the pandemic, have been migrating away from the most prosperous parts of the country.

This pattern, visible in an Upshot analysis of census microdata, is startling in retrospect. Major coastal metros have been hubs of the kind of educated workers coveted most by high-powered employers and economic development officials. Economists have lamented the growing coastal concentration of their wealth. A politics of resentment in America has fed on it, too. These urban centers have become a class of their own — “superstar cities” — with outsize impact on the American economy fueled by the clustering of workers with degrees.

But it appears in domestic migration data that, years after lower-wage residents have been priced out of expensive coastal metros, higher-paid workers are now turning away from them, too.

Working-age Americans with a degree are still flowing into these regions from other parts of the country, often in large numbers. But as the pool leaving grows faster, that educational advantage is eroding. Boston’s pull with college graduates has weakened. Seattle’s edge vanished during the pandemic. And the analysis shows San Francisco, San Jose, Los Angeles and Washington all crossing a significant threshold: More college-educated workers left than moved in.

For most of this century, large metros with a million residents or more have received all of the net gains from college-educated workers migrating around the country, at the expense of smaller places. But among those large urban areas, the dozen metros with the highest living costs — nearly all of them coastal — have had a uniquely bifurcated migration pattern: As they saw net gains from college graduates, they lost large numbers of workers without degrees.

At least, that was true until recently. Now, large, expensive metros are shedding both kinds of workers.

The college-educated workers who’ve turned away from them are increasingly migrating toward major metros that are still prosperous but not quite so expensive — places like Phoenix, Atlanta, Houston and Tampa. During the pandemic, smaller cities such as Portland, Maine, and Wilmington, N.C., also saw growing inflows of such workers.

The overall migration rate in America today is historically low, and mobility has fallen since the 1980s for all kinds of demographic groups. But these college-educated workers have recently bucked that trend. In the years leading up to the pandemic, their mobility rate was actually rising, a pattern true for both local moves and the kind of longer-distance moves between metro areas that are analyzed here. That has opened a potentially new divide in the American economy between increasingly mobile white-collar workers and blue-collar workers who are increasingly likely to stay put.

For every move that anecdotally points to these trends — and the pandemic produced many such anecdotes — it’s trickier to capture these patterns nationwide. The census doesn’t publicly track moves between metro areas by demographic cohorts. So to identify these patterns, The Upshot examined an anonymized sample of millions of census records and identified people who moved, grouped them by education level and age, and then linked each mover’s origin and destination with larger counties and metro areas.

The fact that big coastal metros have been losing workers without a degree is not that surprising — living costs have surged in these places as the good big-city jobs once available to less educated workers in factories and clerical pools have dwindled. But for workers with a degree, economists have concluded that the higher pay promised in places like the Bay Area and New York should still mean it’s a good deal to live there.

That makes it all the more curious that these workers have been leaving anyway.

“Migration patterns for lower-education workers make complete sense,” said Daniel Shoag, an economist at Case Western Reserve University who has found similar trends in work with co-authors Stan Veuger and Philip Hoxie.

“For college-educated workers,” he said, “it’s more of a puzzle.”

Affordability issues move up income ladder

For these higher-education workers, it’s not so easy to separate those who can’t afford a city from those who can but leave anyway. Affordability is relative and personal; for one person it means making rent, for another it means making enough to also join a gym, buy concert tickets and dine out regularly. And even a professional who can afford all of that in New York may still eventually sour on the sixth-floor walk-up and the laundromat that comes with it.

It is clear, though, that affordability has broadly been eroding up the income spectrum in the country’s most expensive metros. As these regions have become richer, that has, among other things, helped fuel the rise in their housing prices.

“And it ends up pricing out more and more people — not just people in the middle, but even people with higher incomes and college degrees,” said Jed Kolko, the under secretary for economic affairs at the U.S. Department of Commerce (and a former Upshot contributor).

If the Bay Area, for one, ceased to be a land of opportunity more than a generation ago for bus drivers and home health aides, today it may be losing that appeal for engineers and consultants.

The sudden pandemic-era rise of remote work has also accelerated that shift. Remote work has driven demand for more space by white-collar workers in precisely the places where more space is hardest to come by. And remote work has altered the bargain that educated workers must swallow high living costs to access the highest wages.

“Now, highly educated and more high-income workers have an option that they’ve never had before,” said Hans Johnson, a demographer with the Public Policy Institute of California. At least some of those workers can now keep (or accept) San Francisco jobs, while paying Houston or Charlotte living costs. Mr. Johnson suspects that helps explain why the whole state of California has now become a net domestic loser of college graduates.

“California is so beautiful, but it is a hard place to live,” said Rebecca McGrail, 62, a school principal who moved with her husband, a consultant, and daughter from the San Francisco metro to Durham, N.C., in 2019. That sentiment encompasses wildfires, earthquake fears and traffic, she said, but above all the steep cost of everything from housing to a pizza dinner.

Expensive big metros have struggled the most to retain educated workers aged 40 to 64, who face the greatest exposure to steep mortgages, child care costs and big grocery bills. (Younger educated workers were at first a bulwark against that trend, but have increasingly migrated away from these regions, too.)

Jim Dalrymple II left Los Angeles when he reached that costly life stage — when the smallest, cheapest house he said he and his wife could find in the city was no longer big enough to fit children.

“I love L.A., I thought we would stay there indefinitely — I miss it still,” said Mr. Dalrymple, a 41-year-old writer. When he and his wife concluded they couldn’t afford to stay, they moved in 2019 to a much larger home within walking distance of downtown Salt Lake City. He recalled the abundant jobs and affordable housing that attracted his schoolteacher grandparents to Southern California two generations before he left.

“I would love to take advantage of all that myself,” he said. “It’s not available to us. And it’s not available to a lot of people.”

Garrett Lyon, a 40-year-old brand strategist, described having a similar realization in Seattle when he and his wife considered buying a home: “Seattle was crazy, absolutely, absolutely insanely expensive,” he said. They could have afforded a home an hour outside the city, he said. Instead, they moved to Nashville.

Other college-educated workers who’ve moved away from the coasts described in interviews quality-of-life considerations that go beyond any simple accounting of wages versus living costs. They mention wanting furniture that would never fit in a New York elevator, or having a home office with a door that actually closes. They talk about not just cheaper housing, but washing machines, walk-in closets and walls to hang artwork.

Some describe frustration that even people who’ve followed typical routes to success — get a degree, save up money, work your way up to better-paying jobs — still struggle to live comfortably in coastal metros.

“The threshold is just so high,” Eduardo Lerro, 45, said of the income required to get by in New York. He was a public-school teacher in the city, then recently became a higher-paid consultant who could live elsewhere. In 2021, he moved home to the Minneapolis area.

Metro New York has long lost more college graduates than it gains through domestic migration (a steady influx of immigrants has historically helped make up for that population loss). But while New York continues to attract more than 100,000 inbound working-age graduates annually, the number departing has grown steadily and topped more than 200,000 in the most recent year of census data — which encompasses Mr. Lerro’s move.

“My living room is bigger than any apartment in New York I ever had,” he said. And that was true even with a Ph.D. and a good job.

‘Incredible concentration of wealth’

Prosperous cities have long grappled with the imbalance created by an exodus of lower-wage workers. Their departures stress businesses needing to hire lower-wage staff, and they fray working-class neighborhoods that have lost residents. The high cost of living in big coastal metros also means that many lower-income households are blocked from moving into places with plentiful jobs and a stronger safety net. It’s bad for these regions, too, when essential workers like firefighters or child care providers can’t afford to live there.

The migration of college-educated residents away from these same places, on the other hand, raises a more muddled set of questions. Domestic migration is zero-sum, meaning a loss of college graduates prized by local officials and tax collectors in Washington or San Francisco can be a gain for Kansas City or Orlando. And researchers who study inequality say it would be a good thing if college graduates (and their spending power) were less clustered on the coasts.

“There’s an incredible concentration of wealth in these superstar cities that is unhealthy,” said David Autor, an economist at M.I.T. whose work has traced the disappearance over time of good big-city jobs for less educated workers. “It also means a lot of the affluence that goes with that is very concentrated among a small set of people.”

While it may be good for the country for that affluence to spread out more, some of the forces that appear to be driving this shift — like a coastal housing shortage, and political paralysis around solving it — are hardly positive.

“It’s a side benefit of a very messy, costly thing,” said Adam Ozimek, the chief economist at the Economic Innovation Group, a think tank focused on the widening inequality in America between prosperous and struggling places.

College-educated workers leaving the most expensive parts of the country are also not spreading out equally everywhere — or even going to parts of the country that are struggling. Most are going to what could be considered the next price tier of big metros. And since the pandemic, more are going to smaller metro areas and even rural parts of the country.

These migration patterns may also reflect the fact that many cities outside coastal America have themselves changed over the last 20 years. More of them have developed the amenities associated first with big coastal cities: revitalized downtowns, brewpubs, loft apartment conversions, diverse restaurant scenes.

“Some of it is that the most expensive places got really expensive,” Rebecca Diamond, a Stanford economist, said of shifting migration patterns. “But also, the middle-tier places became more attractive.”

Since 2000, she has found, college graduates have increasingly been moving toward high-amenity cities and away from the highest-wage ones. “Consumer cities,” as she puts it, are increasingly replacing “producer cities” as the places where college graduates want to live.

In interviews, several movers described not just the appeal in their new homes of more space and a lower cost of living, but also the sense that they hadn’t given up too much to gain those benefits. To a growing degree, they said, what they left behind they can find in Charlotte, Denver, Minneapolis, Salt Lake City, Dallas or Louisville.

Those places today may promise something like 90 percent of the city life of a big coastal metro at 60 or 70 percent of the cost. And that trade-off is particularly alluring for some workers choosing between a central neighborhood in a more affordable city or a far-flung home in the coastal exurbs.

“There’s never been a time since I moved here where I was like, ‘Dang, I wish I could do something I used to be able to do back in D.C.,’” said Jonathan Ruckman, 42, who moved to Louisville from Washington in 2013.

On the other hand, he can do in Louisville things he believes he couldn’t afford to in D.C., including buying a home as a public-interest lawyer.

Decisions like his are noteworthy not because a lawyer, a consultant or a brand strategist who moves across the country counts for more than a waitress who does, but because their decisions say something broader about the places they’ve left behind and the options available to others there.

“This is about choice, and who has choices,” said Abigail Wozniak, who directs the Opportunity and Inclusive Growth Institute at the Minneapolis Fed. That means, she said, that we have to understand what goes into the choices visible in this data to recognize what choices are closed to other people — like the teacher who might like to move to California but can’t afford to and never does, or the nursing assistant who won’t make it in New York because even an entrepreneur can’t.

“I had these dreams about opening a business,” said Laura Newman, 33, who wanted to own her own bar in her native New York City. “I really wanted to pursue those dreams. And it didn’t matter how much money I saved, because the cost of achieving those goals increased as I was saving money.”

And so she moved to Birmingham, Ala., in 2017 and opened her first bar there instead.