Immigration flows, long a source of demographic vitality for coastal metropolitan areas, have been shifting to the interior, as Brookings has noted. From 2010 to 2018, the foreign-born population of Houston, Dallas–Fort Worth, Austin, Columbus, Charlotte, Nashville, and Orlando increased by more than 20 percent, while San Francisco’s foreign-born population grew only 11 percent, and New York’s by 5 percent. Los Angeles suffered a loss of nearly 1 percent. The foreign-born are also headed in increasing numbers to unlikely locations such as North Dakota, which experienced foreign-born growth of 115 percent, and South Dakota (58 percent), while states such as Minnesota and Iowa had more than 25 percent growth.

Many urban politicians act as if talent will continue to cluster in elite places like San Francisco, New York, West Los Angeles, or Seattle, but companies seeking to recruit educated workers increasingly flock to places like Dallas–Fort Worth, Orlando, Nashville, and other affordable red-state metros. The movement of corporate offices has been particularly marked, with an estimated 1,800 firms leaving California for the Lone Star State in just one year. These companies are not just low-wage employers but high-paying firms like Toyota, Nissan, McKesson, Bechtel, Jacobs, Parsons, and Sanford Bernstein. Once a jobs magnet, California has emerged as the largest sender of jobs to Texas. Between 2000 and 2013, the Golden State was the source of more than 51,000 jobs, about one-fifth of all jobs moving to Texas. The most recent survey for Chief Executive Magazine ranks Texas, Florida, Tennessee, North Carolina, and Indiana as more business-friendly, while blue bastions California, New York, New Jersey, Illinois, and Connecticut stood at the bottom.

The impacts on higher-wage-sector growth are evident.