Wealth migration taking place
Bloomberg’s analysis of data from the IRS highlights the southern wealth migration. Florida, Texas, Georgia, the Carolinas and Tennessee collectively added $100 billion in new net income from 2020 to 2021.
Meanwhile, the Washington, New York and Boston corridor lost $60 billion in income during this period.
That marks the first time the tax agency has seen this type of reversal since it started collecting this data in the 1990s.
Bloomberg attributes the shift to a “flood of transplants.” Out of the 15 fastest-growing cities, 10 of them are in the Southeast corridor, according to Census Bureau data. Some of that growth is likely attributable to a number of corporations moving their headquarters from the Northeast to the South, bringing with them a tremendous number of jobs.
And it doesn’t hurt that residents will experience “warmer weather, lower taxes, looser regulation and cheaper housing” in the South, as Bloomberg points out.
But what about the ‘woke’ issue?
Palihapitiya argued there’s a cultural lawyer to the debate. He claims “woke” policies were also a driving factor in the migration.
“Is the major differences between these two groups only ideology? Or is it something else like genetics, health, etc etc that I’m not understanding?” he asked his followers on Twitter.
Several Twitter users agreed with Palihapitiya’s conclusion, with one noteworthy exception: billionaire Mark Cuban.
“Name me one woke company that has gone broke,” Cuban replied to Palihapitiya’s tweet.
Palihapitiya took Cuban up on his challenge, responding with a list of all startups that had gone bankrupt in recent years and said some were likely to be “woke,” but Cuban wasn’t satisfied: “A list of STARTUPS failing is weak and you know it Chamath.”
Cuban, a self-described independent, arguably has some skin in the game, as his latest venture — Cost Plus Drugs, which aims to lower drug prices for Americans — is arguably a “woke” corporation. Launched in 2022, the company delivers over 100 generic medicines across all 50 U.S. states with a simple pricing structure: costs plus 15% markup, a $3 pharmacy service fee and a $5 shipping fee.
Where does that leave the debate?
As further data comes in, the debate over America’s ongoing migration rates is sure to rage on.
The Census data Palihapitiya cited was based on 2020-2021 statistics, when remote work and pandemic lockdowns were at a peak. That saw a number of office workers fleeing expensive cities to find more space and affordable living elsewhere.
As that trend has begun to recede in the Northeast, it’s possible more recent data could tell a different story. For instance, New York’s population grew last year while it added enough jobs to push the unemployment rate below 4%.
Either way, when that data eventually comes out, it’s safe to say Palihapitiya and Cuban will both be eager to see if it backs up their assertions or not.
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