When we think of people moving, we tend to focus on the traditional sort of economic migration or the terrible consequences of war, oppression and terror. There's another collection of mobile people who don't get talked about - millionaires.
In a fascinating article for New Geography, Joel Kotkin looks at where there millionaires are moving to and from. And he starts by reminding us how important the spending power of the rich people is to many urban economies:
Former New York Mayor Michael Bloomberg has suggested that today a successful city must be primarily “a luxury product,” a place that focuses on the very wealthy whose surplus can underwrite the rest of the population. “If we can find a bunch of billionaires around the world to move here, that would be a godsend,” Bloomberg, himself a multi-billionaire, said toward the end of his final term. “Because that’s where the revenue comes to take care of everybody else.”
You don't have to be comfortable with this dependency on the very rich to understand the realpolitik of Bloomberg's observation. And Mayor Mike knew it is an issue because the very rich aren't moving to places like New York, nor are they moving to London:
The biggest winners are not the elite global cities, like New York or London, but ones that are comfortable, and boast pretty settings and world-class amenities. The leading millionaire magnets in 2015 were Sydney and Melbourne, gaining 4,000 and 3,000 millionaires, respectively, many from China. In third place is Tel Aviv, a burgeoning high-tech center which is attracting Jews fleeing Europe, notably from France.
Dubai ranks fourth, luring many Middle Easterners seeking a safer, cleaner business locale. Then comes a series of some of the most attractive cities on the planet, including Seattle (seventh) and Perth (eighth). In many cases these cities are gaining from “flight capital” from Asia and the Middle East.
Kotkin observes that the migration of millionaires seems driven by two factors - the safety of money and the safety of the millionaire. As a result millionaires leave Russia and China where property rights are weak and leave France because they don't feel safe (the big French exodus is of Jews and it's striking that they feel safer in Tel Aviv than they do in Paris).
Countries and cities need to worry about the exodus of millionaires - here's the impact of just one individual switching US states:
The movement for example of one billionaire — hedge fund manager David Tepper — from New Jersey to Florida could leave the Garden State with a $140 million hole just from his change of address. Overall New Jersey depends for 40 percent of its revenue of income taxes, one-third of which is paid by the top 1 percent of the population.
And the two top destinations for millionaires? The USA and Australia.
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