Pennsylvania is experiencing a population decline that ranks among the worst in the nation. According to the latest data from the U.S. Census Bureau, the state lost nearly 40,000 residents to other states from July 2021 to July 2022. This trend has been going on for years, as Pennsylvania has been losing working-age people who seek better job opportunities and lower taxes elsewhere. What are the causes and consequences of this mass exodus, and which cities are most affected?
The Causes of Outmigration
The main reason why Pennsylvanians are leaving the state is to look for a new job. The state has not recovered from the payroll job losses during the pandemic, while other states have seen significant job growth. Pennsylvania also has a high tax burden, ranking 10th highest in the nation in state and local taxes per capita.
The state’s income tax rate is 3.07%, which may seem low, but it applies to all types of income, including wages, interest, dividends, capital gains, and retirement income. The state also has a high corporate net income tax rate of 9.99%, which discourages business investment and expansion.
Another factor that contributes to outmigration is the aging population. Pennsylvania has the fifth oldest population in the nation, with a median age of 40.8 years. The state has more deaths than births, which reduces the natural population growth.
The state also has a low fertility rate of 1.64 children per woman, below the replacement level of 2.1. As the retirement-age population grows, Pennsylvanians will have to spend more money on social services, such as health care and pensions, which already account for a large amount of state government expenditures.
The Consequences of Outmigration
When Pennsylvanians flee the state, they take their talent and resources with them. This creates a “brain drain” that hurts the state economy and finances. The individuals moving to other states are largely working-age people who pay the taxes that fund state government.
According to a United Van Lines 2022 study, more than 67% of individuals leaving Pennsylvania were between the ages 18 to 64. Internal Revenue Service data indicate that from 1992 to 2019, Pennsylvania lost a total of $106 billion in income from domestic outmigration. Another analysis reveals that Pennsylvania lost $1.2 billion in income due to domestic outmigration between 2019 and 2020 alone.
Outmigration also affects the state’s political representation and influence. Pennsylvania lost one congressional seat and one electoral vote after the 2020 census, due to its slow population growth relative to other states. This reduces the state’s voice and power in the federal government. Outmigration also changes the demographic and political composition of the state, as the remaining population may have different preferences and values than the departed ones.
The Cities That Are Losing Residents
The mass exodus from Pennsylvania is not evenly distributed across the state. Some cities are losing residents more than others, depending on their economic and social conditions. According to the U.S. Census Bureau, the top five cities that had the largest population decline from 2010 to 2020 are:
Philadelphia: The largest city in the state lost 26,333 residents, or 1.7% of its population, in the past decade. The city has a high poverty rate of 23.3%, well above the national average of 10.5%. The city also has a high crime rate, ranking as the 13th most dangerous city in the nation, according to the FBI.
Pittsburgh: The second-largest city in the state lost 12,431 residents, or 3.9% of its population, in the past decade. The city has been struggling to transition from its industrial past to a more diversified economy. The city has a low median household income of $47,417, below the national average of $62,843. The city also has a high tax burden, with a local income tax rate of 3% on top of the state income tax rate of 3.07%.
Erie: The fourth-largest city in the state lost 6,447 residents, or 5.8% of its population, in the past decade. The city has been hit hard by the decline of manufacturing, which was once its main economic driver. The city has a high unemployment rate of 7.7%, above the national average of 5.4%. The city also has a high poverty rate of 26.2%, among the highest in the state.
Scranton: The sixth-largest city in the state lost 3,894 residents, or 4.6% of its population, in the past decade. The city has been facing fiscal challenges, as it has a high debt load and a low credit rating. The city has a low median household income of $40,073, well below the national average. The city also has a high local income tax rate of 3.4%, in addition to the state income tax rate of 3.07%.
Reading: The fifth-largest city in the state lost 3,883 residents, or 3.4% of its population, in the past decade. The city has the highest poverty rate in the state, at 36.4%, and the second-highest in the nation, behind only Detroit. The city has a low median household income of $31,247, less than half of the national average. The city also has a high crime rate, ranking as the 25th most dangerous city in the nation, according to the FBI.
Pennsylvania is facing a mass exodus of residents who are leaving the state for better economic and social opportunities elsewhere. This trend has negative impacts on the state’s economy, finances, and politics, as the state loses income, tax revenue, and representation. Some cities are more affected than others, as they suffer from high poverty, crime, unemployment, and taxes. To reverse this trend, the state and local governments need to enact policies that promote a balanced, fiscally responsible budget, a low-tax environment, and a diversified, competitive economy. Pennsylvania has the potential to be a destination state, but it needs to address the challenges that are driving people away.