The South Rises Again
The economic engine of the U.S. has moved from the Northeast to the South, as entrepreneurs chase their dreams in a new land of opportunity.
There’s an old saying left over from the end of the Civil War: The South will rise again. And today, it’s happening in a way no one expected.
The Northeast had long been the locus of American wealth, particularly New York City. But all that’s changing. “For the first time, six fast-growing states in the South — Florida, Texas, Georgia, the Carolinas, and Tennessee — are contributing more to the national GDP than the Northeast, with its Washington-New York-Boston corridor, in government figures going back to the 1990s,” reports Bloomberg. “The switch happened during the pandemic and shows no signs of reverting.”
This is a monumental economic shift. “The statistics are staggering,” writes The Daily Wire. “The Southeast gained roughly $100 billion in new income in 2020 and 2021; the Northeast lost roughly $60 billion, an analysis of recently published Internal Revenue Service data showed. Since the pandemic began in early 2020, two-thirds of all job growth came in the Southeast, where 9 of the 15 fastest-growing American large cities reside.”
The reason for the South’s good fortune isn’t rocket science. Not only is the climate more attractive with mild winters, tourist attractions, cultural centers, and vacation spots, but the political and economic climates are also attractive to many businesses and entrepreneurs.
Take Florida, for example. “The state has an innovative public policy that encourages research and development of new products,” writes business owner Gilda D'Incerti. “It also has low taxes and a pro-business climate, as well as a large workforce that is culturally and linguistically diverse. The rail system, public and commercial airports and deep-water seaports are indicative of a highly developed infrastructure geared to serve many different types of industries.” D'Incerti adds that there’s no income tax in Florida, and corporations there only pay 5.5% on their corporate income taxes.
These factors are not only attracting corporations but ordinary Americans who’ve had enough of being woke and broke in the Northeast.
Indeed, they’re leaving in droves. According to the National Association of Realtors: “Twenty-six states experienced an influx of people, with more people moving in than out, while twenty-five states [and the District of Columbia] lost movers. Florida (318,855), Texas (230,961), and the Carolinas — North Carolina (99,796) and South Carolina (84,030) — were the states with the most net domestic migration gains in 2022.”
Meanwhile, they add, California and New York each lost around 300,000 residents and Illinois lost nearly 150,000. To accommodate the tidal wave of new residents and businesses, the South is rushing to build new homes and office space.
The numbers don’t lie, and the Sunshine State is leading the way. As Investopedia notes: “Florida’s population grew almost 2% in 2022, making it the fastest-growing state in the nation for the first time since 1957, according to U.S. Census data, as families and businesses are drawn by lower taxes and growing numbers of jobs. That’s contributing to an office building boom in a state once better known for retirement communities and hotels.” In addition, “While markets like New York and Chicago grapple with a surplus of older office space deserted by tenants willing to pay high rates in newer, Class A buildings, commercial markets like Miami and Palm Beach are seeing new construction rates soar as demand grows.”
Florida, though, isn’t the only place where business is booming. Business Facilities magazine recently announced that Texas has the best business climate in the nation. Other states on that particular list include North Carolina, Virginia, Utah, Tennessee, Colorado, Washington, Nevada, Georgia, and, of course, Florida.
Not a single state in the Northeast made the list.
The Austin Business Journal identifies several reasons why Texas tops the list. One is sheer size: The Texas economy would be the seventh-largest in the world were the Lone Star State a nation unto itself, and it’s becoming a hub for Fortune 500 companies. The Journal also mentions how easy it is for young entrepreneurs to start a business — low taxes and low regulations, top business universities, accessible airports and ports, and infrastructure connecting Texas to the coasts.
Clearly, the South is rising, and it doesn’t look like the boom will slow down anytime soon.
One wonders why political and business leaders in the Northeast aren’t following the South’s lead by creating a business-friendly climate. Could it be that they just don’t get it?
Regardless, many citizens of the northeastern states do get it. Which is why they’re taking their bags and their wallets down South, to the land of political freedom and economic opportunity.
Who can blame them?
