April 2, 2009 at 1:00 am

Leaving Michigan Behind: Eight-year population exodus staggers state

Outflow of skilled, educated workers crimps Michigan's recovery

Joe LaCross Sr. helps his son, Joe Jr., prepare to move from his Sterling Heights home to a new residence in Florida last fall. Michigan's population loss to outmigration more than quadrupled from 2001 to 109,000 people in 2008. (Kiya Gibbons / Special to The Detroit News)

Joe LaCross drives American cars. Always has. Born and raised in the blue-collar suburbs of Detroit, this son of a welder wouldn't dream of rolling past his autoworker neighbors in a Toyota. But not long ago the 38-year-old pulled into the driveway of his Sterling Heights home in a vehicle wreaking even more havoc in his home state.

A moving van.

"I grew up here," said LaCross, as he packed to move to Florida in search of a job. "My family is here. My wife's family is here. I love everything about Michigan.

"Everything," he said, picking up a plastic storage tub, "except the economy."

People are leaving Michigan at a staggering rate. About 109,000 more people left Michigan last year than moved in. It is one of the worst rates in the nation, quadruple the loss of just eight years ago. The state loses a family every 12 minutes, and the families who are leaving -- young, well-educated high-income earners -- are the people the state desperately needs to rebuild.

Long treated as a symptom of Michigan's economic woes, outmigration has exploded into a massive problem of its own, a slow-motion Katrina splintering families, gutting state coffers and crippling an already hobbled economy, one moving van at a time.

"I never thought I'd leave," said LaCross, looking around his empty Michigan home. "What happens now?"

Poorer, less educated

Michigan's exodus is one of the state's best known but least understood problems. Long ignored or downplayed, outmigration has been shrugged off partly because it was assumed that those who were leaving were unemployed blue-collar workers and retirees, groups that, in economic terms, don't cripple the state with their departure.

But a Detroit News analysis of U.S. Census Bureau and Internal Revenue Service data reveals that every day, Michigan gets less populated, less educated, and poorer because of outmigration.

The state's net loss to outmigration -- the number of people leaving the state minus those moving in from other states -- has skyrocketed since 2001. Although the Census Bureau does not report totals moving in and out each year, Internal Revenue Service records show that the population decline is a result of two disturbing trends: The number of Michigan residents leaving the state rose 25 percent between 2001 and 2007, while the number of new residents moving in plummeted by nearly one-third.

Since 2001, migration has cost Michigan 465,000 people, the equivalent of the combined populations of Grand Rapids, Warren and Sterling Heights -- the state's second-, third- and fourth-largest cities.

Population loss of that magnitude is so rare that its impact has never been studied. But The News' analysis discovered some sobering trends:

  • Those leaving Michigan are the people the state most needs to keep -- young and college-educated. The state suffered a net loss to migration of 18,000 adults with a bachelor's degree or higher in 2007 alone -- the equivalent of half the staff of the University of Michigan crossing the state line.

    "We're home-grown," lamented Dave Stefanic, a former Ford engineer, who with his surgical assistant wife, Cindi, moved to South Carolina in January, leaving behind the dream home they built in Brownstown Township. "To have to leave Michigan because of the economy ... it's depressing."

    Dave and Cindi both have college degrees. Dave was laid off from Ford six months ago, but didn't put his house on the market for four more months, hoping to find work in the area. "All the offers I got were out of state," he said.

    Those with college educations were more likely to move than those without a degree. One-quarter of adults still in Michigan have at least a four-year college degree, compared to 39 percent of those who left.

    In simplest terms, those with the skills to leave Michigan are doing so; high-skilled people from other states who once might have moved to Michigan are choosing to go elsewhere.

    "Migration is good for the migrants but bad for the state they're leaving," said Mark Partridge, an economics professor at Ohio State University who specializes in the study of migration patterns. "It's a vicious downward cycle; the best and brightest leave; entrepreneurs don't come to the state because the best and brightest are elsewhere; as more people leave, that leaves fewer people to pay for services. Neither one will make Michigan a very appealing place."

  • Michiganians who fled the state in 2007 took with them almost $1.2 billion more in paychecks than the paychecks of those moving in. That represents a 45 percent increase in lost wages in just one year, money no longer spent in Michigan businesses, paying mortgages or paying taxes.

    Those leaving Michigan had incomes 20 percent higher than those who moved here ($49,700 to $40,000), a disturbing reversal of a long-standing trend.

    And those figures don't take into account the "ripple effect" those paychecks would have had here -- an estimated $3.7 billion.

  • The net loss of school-age children was more than 12,000 in 2007 alone, costing individual school districts roughly $84 million in state aid.

  • With about 36,000 more households leaving the state than moving in, that leaves 36,000 empty houses and apartments, damaging already weak home values. "When there are more properties on the market, it drives down prices," said Ron Walraven, a real estate agent in West Bloomfield. "With the layoffs and the buyouts at the auto companies, people are leaving. Some are just abandoning their homes."

  • People moving from state to state are disproportionately young. While almost 13 percent of Michigan's population is over 65, only 2.5 percent of those leaving are that old. That means outmigration is adding to the costs associated with an aging population, such as the state's share of Medicaid payments to retirement homes.

  • There will be fewer tax dollars to pay for those services, maintain roads or run schools. According to Senate Fiscal Agency estimates, the income leaving the state cost Michigan more than $100 million in personal income tax revenue in 2007 alone.

    The impact on communities is harder to quantify, with each departure pulling a thread from the social fabric. The loss of LaCross means a group of buddies will no longer have his trailer to use to go to deer camp; his brother-in-law, Steven Selva, who moved to Florida with LaCross, left a girls softball team without a coach.

    "We've got deep roots -- I've got tons of family here," said Vivian Matti, who told her parents over Thanksgiving dinner that she and her family were moving to Coco Beach, Fla.

    Over turkey and dressing, the 35-year-old told an achingly familiar story of lost jobs and a foreclosed home. "I've been in Michigan for 15 years and my husband for 30," Matti said. "We're all depressed we're leaving, but there's no other choice."

  • As Michigan loses population and other states gain, the state is likely to lose more congressional seats, resulting in less clout in Congress. Electoral votes -- based on congressional seats -- probably will decline, giving Michigan less influence in presidential elections when votes are reallocated in 2010.

    "These numbers -- my God," said Kurt Metzger, a demographer who heads a local nonprofit. "It's like a perfect storm -- the education, the income, the young people, everything is going in the wrong direction."

    Recovery gets harder

    As bad as the outmigration numbers are now, Metzger worries they may get worse.

    "The pattern used to be that people would move away from Michigan and then move back," Metzger said. "Now, people are moving and then drawing the rest of their (extended) family with them."

    Gina Damuth's husband, Fred Damuth, was laid off from Pfizer in 2007. Later that year, they moved from Farmington Hills to North Carolina.

    Now, Gina Damuth has convinced her parents to move to North Carolina, too.

    "I feel so bad for the people stuck in Michigan," said Damuth, 34. "I was in the Detroit area recently and I didn't realize the number of people who walk with their head down. You can see it if you pay attention -- nobody smiles, everybody looks depressed. My dad says it's scarier now. People are talking about how they don't know if Michigan is going to recover this time."

    That recovery will be harder because of the people who have left, said University of Michigan economist Don Grimes. "You can't grow your economy if you're shrinking. You basically have an infrastructure built around a certain size of economy, and if you shrink below that scale, you have fewer people to support the infrastructure."

    That can mean higher taxes, poorer services or both.

    Some of those costs won't be felt for decades.

    "When you lose people in their 20s, in five years, you won't have their kids entering school; in 20 years, you won't have their kids entering the work force," Grimes said. "It puts you in a downward spiral."

    Indeed, demographers have said the sharp population losses from 1979 to 1983, when the state lost nearly a half-million people in four years, created an "echo dip" in the state's population nearly two decades later. The current migration, which has seen similar total losses, has lasted twice as long.

    'What can you do?'

    In Sterling Heights, Joe LaCross Jr.'s father, Joe LaCross Sr., tears up as he helps his "No. 1 son" load his belongings into a van to move across the country.

    "You may never see me again," LaCross Sr. said.

    "Oh come on," said his son.

    The father brought a bottle of his best home-made cherry wine for his son to take to Florida; a piece of the family, a piece of Michigan.

    "It's terrible for the people in Michigan," LaCross Sr. said. "It's a beautiful state. But what can you do? You have to work."

    rfrench@detnews.com">rfrench@detnews.com (313) 222-2175

    About this report: Leaving Michigan Behind

    Outmigration is one of the best known and least understood problems facing Michigan. The Detroit News utilized several sources to answer questions about who was leaving the state, their educational attainment, income levels and destinations.
    Among the sources was the U.S. Census Bureau, which last year for the first time released demographic profiles of those people who had left the state.
    The analysis also utilized records from the Internal Revenue Service, which tracks people by their tax returns to create a database of county-to-county moves.
    To get at the big number -- how many people are leaving -- The News relied upon the Census Bureau's annual migration estimates that are based in part on the IRS information.

    Coming Friday

  • Half of university grads flee Michigan
  • Michigan efforts fail to slow population exodus

  • The Stefanic family left the dream home they built in a Brownstown ... (John T. Greilick / The Detroit News)