
One
of biggest reasons people remain unemployed, underemployed, or
underpaid, is because they simply refuse to move. In the past, families
used to more frequently migrate towards areas of the country which had
greater job opportunities. Now a days, unfortunately, people have the
attitude that jobs should come to THEM. Some of this is due to attitude,
but some is also due to the unintended consequences of public policy.First, here’s the evidence that things used to be different: In 1947,
20.2% of the population moved at some point during the year. [a] That
was not an outlier. Fast forward to 1984 and again 20.2% of the
population was still moving at some point during the year. [a] Matter of
fact, for decades, this was the norm. The figure averaged 19.44% from
1947 -1984, always hovering around that 19-20%. [a] But from 1984 to the
present era, that number steadily declined. By 2016-2017, only 11% of
the population moved during the year. [a] While it would be foolish to
claim this one factor determines employment, it IS reasonable to
acknowledge such a factor contributes. Further research supports this
notion by tracking the specific reason why people moved. The data we
have for this goes back to 1980, where 41.8% of job seekers said they
relocated for new positions. [e] Fast forward to 2018 and, thus far,
only 10.1% of job seekers said they were relocating to find new
positions. [e] Some people may object to this point by claiming that the
rise in two income households, meaning wives working as well as their
husbands, has made it less plausible to coordinate family relocations.
The data which counters this, however, shows that such a talking point
is out dated. Contrary to popular misconception, by 1980, the average
number of income earners in a consumer-unit (aka a household) was 1.4.
[f] Fast forward to the present and that number was mostly unchanged at
1.3 by 2017. [g] So while it may be true that, prior to 1980, families
were more likely to be singe-income households, that factor simply
stopped changing by 1980. Despite that, the number of households moving
to find work continued to decline, meaning that decline cannot
reasonably be tied to the number of workers within a household. This is
clear evidence that people in need of work simply aren’t as willing or
able to find it as they used to be. The question is, why?Four suspect causes contribute:
• Attitude
• Homeownership subsidies
• Land use restrictions
• Occupational licensing▪️ATTITUDE:
Essentially, we have gradually grown spoiled, with each passing decade
insisting more and more that we need not relocate. With a few minor
exceptions, this trend continued regardless of whether jobs were
plentiful, and that’s the point, it shouldn’t have. We SHOULD have seen a
change in relocation behavior. For instance, by September 30th of 2018,
7,009,000 job openings existed. [h] Around the same time, October 2018,
only 6.1 million people were unemployed. [i] In other words, at this
time, there were more job openings than unemployed people seeking work.
So the jobs WERE there, people just weren’t filling them, and the trend
in people’s relocation behavior continued to decline. This suggests an
attitude problem.▪️HOMEOWNERSHIP SUBSIDIES
America’s declining mobility rates are partly the result of subsidies
gifted to homeowners, per Yale Law Professor David Schleicher, who
authored a study entitled, “Stuck In Place: Law and the Economic
Consequences of Residential Stability.“ It occurs through the mortgage
tax credit, which is a direct subsidy of roughly $200 billion a year (or
as high as $600 billion when indirect costs are taken into account).
[b] Common sense would dictate, and the Census confirms, homeowners are
less likely to move than renters, and that has been the case for
decades. [b] For instance, just 5% of homeowners moved in 2016 compared
to 22.9% of renters. [b] The point is, when you subsidize something, you
get more of it than you otherwise would have under organic
circumstances. If people aren’t financially secure enough to afford
houses as opposed to apartments or rented rooms, then we shouldn’t be
encouraging them to purchase an asset that prevents them from relocating
when necessary. We are, in a sense, enabling unscrupulous prioritizing.
Instead, people should first stabilize their careers and only THEN
stabilize their geographical location by committing to long term home
ownership.▪️LAND USE RESTRICTIONS
The economists Chang-Tai Hsieh of University of Chicago and Enrico
Moretti of the University of California at Berkeley argue that zoning
laws, construction caps, and subdivision regulations, limit the supply
of housing. They gathered data from 220 metropolitan areas and found
that land-use constraints lowered aggregate US growth by an estimated
36% from 1964 to 2009. [c] As their paper explains, “Misallocation
arises because high productivity cities like New York and the San
Francisco Bay Area have adopted stringent restrictions to new housing
supply, effectively limiting the number of workers who have access to
such high productivity.” [c]▪️OCCUPATIONAL LICENSING
Many professionals are licensed at the state level. Matter of fact,
‘the share of the workforce that falls under some sort of licensing
requirement has risen from 5 percent in the 1950s to almost 25 percent
in 2008.“ [d] Such licensing requirements make it more difficult to move
out of state, where wages or opportunities are potentially superior.CONCLUSION:
Whether it be attitude, unintended consequences, or both, our populace
is clearly less likely to migrate and find the career opportunities
which already exist. This contributes to people being unnecessarily
unemployed, underemployed, or underpaid, and it need not be that way. It
used to be different.
———————————————-
Sources:
[a]
https://www2.census.gov/programs-surveys/demo/tables/geographic-mobility/time-series/historic/tab-a-1.xls[b]
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2896309[c]
http://faculty.chicagobooth.edu/chang-tai.hsieh/research/growth.pdf[d]
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2896309[g]
https://www.bls.gov/cex/2017/combined/quintile.pdf[h]
https://www.bls.gov/news.release/jolts.a.htm[i]
https://www.bls.gov/news.release/pdf/empsit.pdfData for the graph
https://www.census.gov/library/visualizations/2016/comm/cb16-189_migration.html



