Chamath Palihapitiya, the CEO of Social Capital, recently caused a significant uproar on X (formerly known as Twitter) with just one tweet. The tweet displayed a screenshot of a Bloomberg article. This article showcased a remarkable event in U.S. history: six southern states contributing a greater share to the nation’s GDP than the entire northeastern corridor encompassing Washington, New York, and Boston. However, it wasn’t only the data that garnered attention; it was the caption added by Palihapitiya: “Go woke, go broke.” This solitary tweet ignited a heated discussion about how political ideology can affect economic prosperity.
After analyzing IRS data, Bloomberg has identified a clear trend of wealth migration. From 2020 to 2021, states like Florida, Texas, Georgia, the Carolinas, and Tennessee collectively gained an impressive $100 billion in new net income. In contrast, the once-thriving areas of Washington, New York, and Boston saw their income streams decrease by $60 billion during the same period. This is a significant reversal that the IRS hasn’t observed since they started collecting this data in the ’90s.
So what’s driving this shift? Bloomberg points to an “influx of newcomers.” According to data from the Census Bureau, 10 out of the 15 fastest-growing cities in the U.S. are located in the southeast region. Some of this growth can be attributed to companies moving their headquarters from the Northeast to the sunny South, creating a surge in job opportunities.
Of course, it’s also worth mentioning the appealing advantages of living in the South: milder climates, lower tax rates, less stringent regulations, and more affordable housing. It’s hard to resist the allure of these Southern benefits.
Now, let’s talk about the main issue: the “woke” factor. Palihapitiya suggests that cultural ideology significantly influences this migration. On X, he asked whether the difference between the two regions is solely due to ideology or if other factors such as genetics and health are also involved. This question sparked an intense debate on X.
In response to Palihapitiya’s claims about “woke” companies, billionaire Mark Cuban posed a counterpoint. He challenged Palihapitiya to provide an example of a “woke” company that had gone bankrupt. While Palihapitiya listed several failed startups as potential examples, Cuban remained skeptical and dismissed the list as weak.
Cuban, who describes himself as an independent, has been interested in this issue. He recently launched Cost Plus Drugs in 2022 to reduce drug prices for Americans. This initiative could be seen as socially conscious or progressive, and Cuban is determined to show that businesses with such values can succeed.
As more data becomes available, the discussion surrounding migration rates in the United States will undoubtedly continue. The Census data referenced by Palihapitiya pertains to statistics from 2020 to 2021. Throughout this time frame, remote work and pandemic-related lockdowns prompted numerous office workers to leave expensive cities in search of more spacious and affordable living options elsewhere. This change in lifestyle and housing preferences is evident in the presented data.
As the COVID-19 pandemic begins to loosen its grip and remote work patterns continue to evolve, more recent data suggests a different perspective. For instance, there has been an increase in New York’s population over the past year. The city has created enough job opportunities to push the unemployment rate below 4%.
In conclusion, wealth is shifting from the Northeast to the South. However, there is ongoing debate about the role of “woke” policies in this trend. As new data emerges, Palihapitiya and Cuban will be closely watching to see if it supports their arguments or introduces unexpected twists into the debate. One thing we can be certain of is that this conversation will continue for some time. Stay tuned for further updates on the changing landscape of American migration.