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Southern Surge: Dixie States Expand as Northeast Population Declines

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States in the American South have surpassed the Northeast economically due to lower taxes, better business environments, and population growth.

This growth is attributed to factors such as public policy, lower tax burdens, and more affordable living.

Southern states have seen a significant increase in population, while Northeastern states have experienced a decline.

“The main driver of growth differentials between the states is public policy,” research fellow E.J. Antoni said.

The South’s appeal includes the absence of state income taxes, lower living expenses, and milder climates.

“This includes tax and regulatory policy, both of which vary wildly between states. Because the South, on average, has states with lower tax burdens, less burdensome regulation, better business climates, and more worker freedoms, these states also average faster growth,” he said.

“They also attract people to move there from states like California, Illinois, and New York — states that have extremely unfavorable conditions to sustainable economic growth,” Antoni said.

“During the pandemic, remote work became more mainstream so that people were no longer stuck living near a corporate headquarters or central office in places like Los Angeles, Chicago, and New York City. People chose to leave for lower-tax states, which also often are safer places to live with lower crime rates.”

Notably, the region has cultivated a strong automotive industry and benefited from less harsh COVID-19 restrictions, contributing to a more prosperous environment.

“A significant attraction is the absence or reduction of state income taxes in states like Florida, Texas, and Tennessee, making them desirable destinations for working people,” economist Peter Earle said.

“Living expenses in states such as California and New York, particularly in major urban centers like New York City and San Francisco, are at record levels — shelter costs, in particular. In contrast, states like Florida and Texas offer the potential for notably lower costs related to housing, taxes, and day-to-day expenditures.”

“States such as Florida and Texas typically enjoy a milder and warmer climate when compared to the colder northeastern states,” Earle added. “For older Americans, retirement in Florida and other Southern states has led to a well-established infrastructure and streamlined processes for retirees, making it considerably more straightforward than in less sought-after retirement destinations.”

“Amidst the pandemic (and more recently, the explosion in crime rates), many individuals are seeking refuge from congested urban regions by relocating to states with lower population densities,” he said. “The trend of remote work has gained momentum due to the pandemic. This newfound flexibility has enabled many individuals to move to states with more affordable living costs and lifestyles without changing their employment.”

“The misguided public policy of government-imposed lockdowns also made life unbearable for many people in more left-wing states, which also tended to be states with high taxes and more burdensome regulation,” Antoni said.

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