Population Growth: Winners, Losers, & Charts

Births, Deaths, Immigration, & More

This is our second to last post of 2022, and today (Dec. 26) is the last day of our one-year anniversary blowout bonanza (30% off new paid subscriptions). If your 2023 New Year’s resolution is staying up to date on the economy, 1) that’s kind of a weird resolution but 2) there’s no better (or faster) way to do it than our Week in Review posts every Friday (full sample here)!

U.S. population growth picked up in 2022, rebounding from the historically low levels of 2021. Our resident population expanded by about 1.3 million people this year, which comes out to a 0.4% annual increase.

I’m glad growth picked up, but that 0.4% change is still the second slowest rate on record, trailing only the 0.1% growth seen from 2020 to 2021.

Slowing population growth is, in my opinion, very bad. It makes it more difficult to fund Social Security and limits economic growth, two issues exacerbated by our increasingly geriatric workforce.

But that’s the bad news. There’s plenty of good news here too. Let’s dig in, starting with a look at the components of national growth before drilling down into the regional (and state-level) winners and losers.

Immigration

Net international migration (the number of foreigners who move to the U.S. minus the number of residents who leave) increased in 2022, rising from a historical low of about 376,000 last year to a little more than 1 million this year. That’s the fastest rate of international migration since 2017.

This is encouraging. Aside from helping with some of the population growth related issues mentioned above, immigrants play an outsized role in America’s entrepreneurship supremacy. As of 2017, 43% of Fortune 500 companies were founded or cofounded by an immigrant or the child of an immigrant, according to this study from the Center for American Entrepreneurship. For the 35 largest companies, that share increases to 57%.

Natural Population Change

Natural population change is the measure of births minus deaths, or how a population changes absent migration. On net, births minus death added about 245,000 people to the U.S. population in 2022, well above the 144,000 natural population increase in 2021.

Births increased by 105,000 this year, from 3.58 million in 2021 to 3.68 million in 2022. Deaths also increased, rising by just slightly under 5,000 (2021=3.438m, 2022=3.443m).

Don’t read too much into this. Covid definitely had a huge influence on deaths the past few years and probably had a big impact on births, too. It’ll be a few years before the statistical dust clears and we get a better idea of where we stand with natural population change, but the long-term trends definitively show falling birth rates, and the age-composition of the population suggests deaths will keep trending higher.

Big picture, the Congressional Budget Office projects that by 2046, more Americans will die every year than are born.

State & Regional Population Growth

Winners & Losers

Texas and Florida are the big winners here. Florida had the fastest percentage growth at 1.9%, Texas the fastest absolute growth by adding more than 470,000 net residents. This should surprise absolutely no one.

The biggest losers were New York and Illinois, which both lost more than 100,000 people and saw the two worst percentage declines in their population. (I know that the percent change can be hard to read on this map, so there’s a table at the end of this post that has full statistical detail for every state).  

In numeric terms, California and New York saw the greatest loss of residents. Those states, and specifically those states’ largest cities, are incredibly expensive but provide access to incredibly high paying jobs. Remote work means that, to some extent, people can now have access to the high paying jobs without having to pay for the housing.

Regionally, the south exploded in population (in a good way), the west and mountain west gained lots of people, and the Mid-Atlantic and Northeast absolutely hemorrhaged residents (in a bad way; hemorrhaging is always bad).

As someone living in the Mid-Atlantic, I can anecdotally confirm that I know lots of people who have moved from here to South Carolina or Florida but no one who’s come here from the south.  

So those are the absolute numbers, and it’s pretty much what you (or at least what I) would expect. Things get more interesting when we drill into the components of state-level population growth.

God’s Waiting Room

God’s Waiting Room is a “slang term for the state of Florida.” The gist is that retirees move there while they’re waiting to get into heaven. A little macabre, sure, but even DeSantis has said it.

The data support the idea that Florida is, in fact, God’s waiting room. Despite having the fastest percentage population growth of any state in 2022, Florida had the largest natural decrease (births minus deaths) of any state at -40,216.

Put another way, 40,216 more Floridians died than were born in 2022. And Florida still had the nation’s fastest population growth.

Notice that California and New York, the two states that saw the greatest population declines in 2022, had really large natural population increases for the year. Lots of births, fewer deaths. This is partly because those states are exporting their deaths to other states in the form of retirees.

California and New York also attracted a lot of international immigrants, ranking 1st and 4th in terms of international migration, respectively.  But natural growth and international migration aren’t the most important factors for growing the resident population (though they do matter).

Domestic Migration Drives Growth

The graph below shows total net migration for the top ten and bottom ten states broken down by domestic and international migration. As you can see, the blue bars (domestic migration) tend to be bigger than the orange ones (international).

Put another way, whether or not a state’s resident population expands or contracts is largely determined by how many people they attract from (or lose to) other states.

A Quick Note on Texas

Power grid issues aside, Texas is excelling in just about every way imaginable when it comes to population growth. The Lone Star State ranks first in numeric population growth, first in natural population growth, second in net migration, second in domestic migration, and fourth in international migration.

I’ve seen more headlines about Florida leading the nation in growth but, given the drastic difference in their natural population growth (Texas is ranked 1st, Florida 51st), I think Texas has the better long term economic outlook.

Final Thoughts

Some of the factors driving population growth are out of states’ control. The northeast is cold and will keep being cold. The opposite is true for the southern U.S.

Florida and Texas will keep seeing large international migration because they’re close to those migrants’ countries of origin. Can’t say the same for Wyoming and Vermont.

I think state and local governments that are heavily reliant on income taxes are the big losers of remote work, but I’m not sure what they can do about it in the short term. New York State, for instance, got 22% of its total revenues from personal income taxes last year. Florida and Texas got 0%.

This obviously makes New York (and similar states) a comparatively more expensive place to live. It’s not clear to me that lowering the income tax rate would drastically stem the loss of residents to sunnier destinations. It is clear to me that lowering the income tax would cause funding issues, and while it might be a necessary long-term move, current politicians are more concerned with keeping their states funded in the short term.

Finally, as promised, here’s the table of comprehensive state by state data.