The South has long been the butt of the joke for coastal residents, but the draw of Southern hospitality has charmed millions of outsiders to call our beautiful states home. If you’re planning your next move after your time at Vandy, don’t forget about opportunities in your own backyard. A recent piece in Bloomberg makes the argument that cities like New York are like stocks trading at a discount and savvy investors should buy the dip. I make the opposite argument: it’s clear that ambitious young professionals increasingly should set their sights on the South rather than New York or the West Coast.
Tom Brady just won the Super Bowl. An incredible capstone to a legendary career, Brady’s ascension to the biggest game of the year was set in motion eons ago, in March of 2020, when the prolific quarterback announced he was leaving the New England Patriots to play in the sunny environs of Tampa Bay.
Brady was not the only big name who migrated South in 2020. Elon Musk, the world’s wealthiest person, announced his plans to abandon California for Texas, and that he might bring his company, Tesla, with him. Media magnate Joe Rogan left Los Angeles for Austin, and conservative pundit Ben Shapiro fled LA for Nashville.
Wealthy individuals aren’t the only ones moving. Hewlett Packard announced its intention to leave California for Texas, while Goldman Sachs floated plans to abandon Manhattan for Miami. Hedge fund Elliot Management gave up their Central Park view for the Sunshine State, and two years ago, AllianceBernstein (with over $580 billion in assets under management) famously moved over 1,000 employees from New York City to Nashville.
Prominent individuals and corporations highlight a general demographic trend. In 2018, California gained only 500,000 residents while hemorrhaging almost 700,000. Likewise, more than 300,000 people have left NYC during the pandemic, according to the New York Post. Where are they headed? Southern cities like Nashville and Charlotte.
Broad survey data suggests the same: Americans are fleeing states like New York, California, Illinois, New Jersey and Connecticut for states like Texas, Tennessee, Florida, South Carolina and Arizona. In fact, while the U.S. population has grown by more than 20 million in the last decade, New York and Illinois have shrunk over the same period. Texas and Florida, meanwhile, have both exploded by over 15 percent.
A demographic shift is clear: Americans are flying South.
Why? One reason is that the pandemic exacerbated an ongoing revolt against surging costs of living. Expenses in cities like New York and San Francisco were already exorbitant but became intolerable for many residents when local cultural amenities were closed and many offices moved to remote work. In a study of cost of living in 75 large U.S. cities, these two destinations ranked 74th and 75th for affordability.
Another reason is taxes. Pull up an income tax calculator if you want to run through the numbers with me. A worker making $100,000 in New York City can expect to part with about a third of her salary in taxes. If she moved to a city like Nashville, where neither the state nor the city levies an income tax, she can keep roughly ¾ of her earnings. Plus, the move could easily save $10,000/yr. in rent. Several prominent hedge fund managers have realized hundreds of millions in tax savings by fleeing the Northeast for Florida, much to the chagrin of state lawmakers.
It’s true that wages tend to be higher in states like New York, California and Massachusetts. It’s also true that desirable jobs in technology, finance, law, entertainment, education and media are more likely to be based in those states. But elite opportunities can be found throughout the South as well. For example, Charlotte is now the nation’s second-largest banking center, and Houston hosts more Fortune 500 companies than any city besides New York. Likewise, Nashville has been called the healthcare capital of the nation, and trails only New York and L.A. in its number of recording studios. In fact, Atlanta, Dallas, D.C. and Houston are all among the top twenty largest city economies in the world.
Of course, the South is not without its own challenges. Southern states routinely invest less in public services like education, and nine of the ten poorest states are in the South. While it’s true that some sectors of California have become plagued by wildfires, homelessness, traffic and unfriendly taxation, the state remains perhaps the world’s leading incubator for innovative companies. California enjoys an enormous workforce, world-class public universities, year-round sunshine and pristine Pacific beaches. The same cannot be said of, say, Mississippi or West Virginia.
A final microcosm within this macro trend: Vanderbilt University. The school received a whopping 36,646 undergraduate applications for Fall 2020, making it one of the most selective universities in the country. Compare this with 9,754 applications in 2001, a 275 percent increase! This explosion in applications is due in large part to out-of-state transplants, as fewer than 10 percent of Vanderbilt undergraduates hail from Tennessee. About 30 percent come from the rest of the South, meaning a majority of Vanderbilt students are not native Southerners. In fact, roughly a quarter come from just four states: California, New York, Illinois and Massachusetts. It appears that students around the country (and the world: 10 percent of the undergraduate population is international) have realized that Nashville is the place to be.
The demographics of the U.S. have changed in the last 20 years, but at least one thing hasn’t: Tom Brady is a Super Bowl champion.
Calvin H. Warner is a 3rd-year student at Vanderbilt Law School.
