Millionaires Are Fleeing Paris, Athens, and … Chicago
Money talks, but it also walks.
Nobody has the ability to vote with his feet like an extremely wealthy person. New World Wealth, a South Africa-based research group that provides statistical information about the behavior of rich people around the world, released a new report that shows how that vote turned out in 2015, looking at which countries and cities are losing millionaires, and to which countries and cities they are moving.
The big winner is Australia. Sydney, Melbourne, and Perth all ranked among the top cities that have been drawing in millionaires. According to the report, wealthy folks are moving to Australia from other countries like China, the United Kingdom, South Africa, and even the United States. Other big winners are Dubai, Tel Aviv, and Vancouver. In America, big winners were San Francisco and Seattle.
So who were the losers, then? The cities with the biggest outflow of millionaires, were Paris, Rome, Athens, and as the headline spoiled, Chicago. Chicago lost an estimated 3,000 millionaires last year, actually a larger flat number than Athens, which lost about 2,000 (though given Greece's overall situation, they've probably been bleeding millionaires for several years now). Chicago is the only American city the study identifies as losing millionaires. America as a whole gained 7,000 new millionaires last year through migration, second only to Australia in the study.
In fact, according to this study, Chicago lost more millionaires than entire countries like Russia, Spain, and Brazil last year, but then again, just as with Athens, these countries have likely been seeing millionaires migrating out for some time.
As for the reasons why the flight from Chicago, the study gets a little vague. They interview wealthy people to put this report together, and they were told "rising racial tensions, rising crime levels" as major considerations. I would have loved to have seen a poll that had these millionaires rank their concerns so we could get a much fuller sense of what is happening. While it's true Chicago is seeing racial tensions and a jump in crime, the city and the state of Illinois are also seeing significant economic problems, massive debts, and tax issues, and it would have been helpful to see where that all fit into considerations. San Francisco and Seattle are not exactly metropolises with low tax rates, but clearly what they do offer the wealthy offsets the costs.
Chicago and Illinois aren't just bleeding its wealthiest citizens. As we recently noted, Illinois is one of the few states losing population as America grows. Note the Chicago emigration numbers from the census report: Chicago saw a net loss of 6,263 residents for the 12 months measured (encompassing parts of 2015 and 2016). If New World Wealth's report is accurate, that means about half of the people Chicago lost were millionaires. If New World Wealth is going by the region and not just the city, then we see a quarter of the people leaving as millionaires.
As the report notes, when a city or country is bleeding millionaires like this it should be taken as a major warning sign: "Millionaires are often the first people to leave. They have the means to leave, unlike middle class citizens." And those millionaires are the ones that public employees want to turn to fix their pension crisis and the state's massive economic problems. Thousands of them just said "no thanks."
Read the full New World Wealth report here.