The Pointlessness of Bribing People to Move to West Virginia for $12,000

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The Pointlessness of Bribing People to Move to West Virginia for $12,000
Relocation incentives get lots of buzz. Do they work?
By Henry Grabar for slate.com

West Virginia is the latest place to offer a relocation incentive to remote workers: $10,000, parceled out in monthly grants, for your first year in Morgantown, with a $2,000 bonus to settle in for a second year.

The program is called Ascend, and the commercial is alluring—baritone voice-over, sunset drone panoramas, indie-folk harmonies. It’s been endowed by a $25 million grant, which makes it many times larger than similar programs in Vermont, and cities like Tulsa, Oklahoma, and Topeka, Kansas.

It also comes at an interesting time, since many companies are settling on remote work policies that will allow white-collar workers to settle far from the office. That raises the prospect that traditional regional development strategy could be turned on its head, with cities and states chasing workers instead of companies.

Programs like Ascend usually garner a lot of media attention, because their emphasis on no-strings-attached cash grants seems newfangled and zany, like federal stimmy checks or universal basic income. Fair enough—this kind of stuff is new. Since Ascend (which will later include two more West Virginia towns) was announced earlier this week, more than 2,000 people have applied for 50 spots!

But an application does not an interstate relocation make. In reality, these cash grants barely scratch the surface of the savings that their target applicants would unlock by moving to the places in question. And for that reason, it is hard to see them changing the game very much.

A one-bedroom apartment in Morgantown, for example, goes for $675 a month, compared with $2,155 a month in Washington, D.C., according to Zumper. A D.C. resident would already save more than $10,000 a year by moving there—and that’s before accounting for other cost-of-living expenses. Buying a house? The median home value in Morgantown is $222,000, according to Zillow, compared with $672,000 in Washington.

The comparisons are similar between Morgantown and other high-cost cities, such as New York, Los Angeles, or Boston. The $10,000 grant, and then some, is priced in without any actual grants.

Another $10,000 never hurts, of course. But the kinds of people Ascend seeks to attract—the application asks for your Instagram and LinkedIn handles, and promises free access to a coworking space—probably already know how many tens of thousands of dollars (hundreds of thousands, over the years) they would save by moving to a place like Morgantown. Will the prestige of an application process convince them?

The same dynamics apply to programs in Tulsa (10 grand), Northwest Arkansas (offering 10 grand and a bike), and Topeka (five grand toward rent, 10 grand toward buying a home; plus $1,000 from Jimmy John’s to live within five minutes of a sandwich shop). It is not the high cost of living in these places that has pushed young people toward larger cities, and so a relocation subsidy seems like an unhelpful response—doubling down on the one advantage you already have, the one that so far, has not done much for you. If the point of programs like these is to rebalance the economic geography of the country, I don’t see them working—if they succeed in pulling in ambitious young people, it will be from other struggling and depopulated places.

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