Subsidizing the Jobless To Relocate

Can we pay people to move to greener pastures?

The latest Washington policy solution to the problem of the long-term jobless is to pay them to move somewhere else where there are more jobs.

It’s been tried in other contexts. For years, some cities have been offering homeless people one-way bus tickets out of town.  The Bloomberg administration in New York City reportedly went so far as to pay for one-way airfare to Paris or San Juan to send homeless families out of the city.

Relocation subsidies are attracting new attention these days not as a response to homelessness, but as a response to unemployment. The chairman of the Senate Republican Conference, John Thune, recently announced plans to offer an amendment to give low-interest loans of up to $10,000 to out-of-work individuals who use the money to move somewhere to start a new job or to look for a job in a place with a lower unemployment rate.

“Part of a dynamic, mobile workforce is ensuring that those who have been out of work the longest have the resources to relocate for better job opportunities,” Senator Thune said.

A resident scholar at the American Enterprise Institute, Michael Strain, has an article in the Winter 2014 issue of the journal National Affairs calling for subsidies in the forms of grants as well as loans. “Moving is a major investment that requires a fair amount of up-front cash,” he writes. “Many of the long-term unemployed just don't have the money and don't have much access to credit.”

Mr. Strain’s article makes the case in that the relocation subsidies may help even those who don’t end up moving: “If a significant number of unemployed workers leave a city, then the odds of landing a job go up for those who stay, because there are fewer job applicants for every vacancy.”

Mr. Strain’s idea has the attention of his boss, AEI president Arthur Brooks, who mentioned it favorably in his own article in the February issue of Commentary. “Obviously, not everyone will pick up and move, however generous the voucher. But at a time when economic conditions vary wildly between regions, the opportunity is a powerful one,” Mr. Brooks wrote. “Thousands of low-income families would probably prefer to pursue hope and prosperity in booming states such as North Dakota (where unemployment sits at 2.6 percent) than continue cashing government checks and despairing in, say, Michigan (8.7 percent) or Rhode Island (9.0 percent).”

There are plenty of reasons to be skeptical of these ideas.

Those skeptical of government spending can point out that people move to places with better employment prospects all the time, even without government subsidies. Others may worry about the dislocating effects on people who leave their families and friends behind far away in pursuit of a job.

Structuring the subsidy as a loan, as Senator Thune’s amendment does, runs the risk of saddling individuals already loaded with debt with even more of it. A 1981 evaluation of a 1976 federal relocation assistance program found that some program participants, those who moved and then couldn’t find a job even in their new home, were disappointed. The subsidies may encourage people to move to places that appear to be full of jobs at one moment — like Las Vegas in 2005 or Wall Street in 2007 — but are actually about to crash.

Mr. Strain, who has a Ph.D. in economics from Cornell and who moved from Ithaca, N.Y., to Washington, D.C. to join the center-right American Enterprise Institute, wrote to me in an email responding to my skeptical questions: “Skepticism is important! As a conservative, I am skeptical of new policy innovations, too. But this is such a serious problem that something must be done, and it seems to me that going with reasonable, prudent measures is the proper course.”

If federal moving vouchers are to catch on anywhere, America may be the place for it. So many of our forefathers moved here from foreign lands in part for economic opportunity, and after arriving, they or their descendants often moved again. It may not be clear if this is a good idea or a bad one until after it’s tried on a limited scale and evaluated. But it sure is newsworthy.

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  • BuSab Agent||

    Long live indentured servitude!

  • LibertarianX||

    Sounds like the old Sam Kinison joke. With reguard to the starving people in Africa, He said " Don't send them food. Send them lugage. Send U-Hauls. They're starving because the live in a STINKING DESERT! Send the stuff so they can move to where the food is!" The man was before his time, and didn't live long enough to reach it.

  • MattJ||

    I liked Sam Kinison a lot, too. He was talking about the Ethiopians in that routine.

    The problem with his 'solution' is that the government (I want to say I remember that they were Communists but that could be my bad memory) in charge of Ethiopia purposefully moved their enemies out into the desert in a counter insurgency effort to accomplish social transformation.

    When Top Men point their guns at your family and relocate you out to the desert, you do the best you can, I guess.

  • MattJ||

    Yeah.

    Haile Selassie was overthrown in 1974 and the militaristic Derg Regime came to power. In 1977 Somalia invaded to try and annex the Ogaden region, but were pushed back by Ethiopian, Soviet, and Cuban forces. In 1977 and 1978 the government tortured or killed hundreds of thousands of suspected enemies in the Red Terror. After a famine in 1984 killing 1 million people, the Derg fell in 1991 and the Federal Democratic Republic was established.

    http://en.wikipedia.org/wiki/History_of_Ethiopia

  • ||

    I'm tired of living in job-starved Texas. Someone please relocate me to a job-rich place such as Hawaii or Brazil.

  • Sunmonocle Backwards Tophat||

    If a person plans to find a job before moving, then I'm less-not-okay with it. But if they plan to move somewhere on a whim, I think this could turn out pretty poorly. Even in places with low unemployment, finding a job takes a while, as other people from across the country are probably willing to move. It's not as if hiring markets are so local that you need to live nearby.

    This will still be a hard sell to homeowners. As long as homeownership is seen as the American Dream, a lot of this country won't be mobile.

    You gotta go Jim Morrison in "Changeling" - "But I've never been so broke that I couldn't leave town."

  • Juice||

    Wow. This is a really dumb idea.

  • James Taggart||

    I'd pay to move Obama back to Chicago. And Hillary back to Whitewater, Arkansas.

  • Pelosi's Rabbit||

    Bullshit, she's not Arkansan.

  • ||

    What difference does it make at this point?

  • lap83||

    As long as they don't want a voucher for a different school.

  • The Last American Hero||

    I don't get it. I was originally from a part of the country with a bad economy and bad long-term prospects, so I sought and gained employment in a part of the country with good prospects and relocated their at my own expense more than a decade ago. No federal programs needed, and though I did get to claim moving expenses on my tax return it had no bearing on my decision to relocate.

  • JeremyR||

    Strangely enough, most people without jobs for a while don't have money to move.

  • Libertarius||

    Who cares?

    First let's tax and regulate the economy to death, then pay unemployed people to go where the economy isn't dead? This is fucking stupid.

  • Sevo||

    You know who else moved populations to new locations.

  • Sunmonocle Backwards Tophat||

    Moses?

  • JeremyR||

    But wait, I thought this was part of the argument for open borders? Free movement of labor?

    This of course shows why it's a bad idea - most people simply cannot afford to move. If you bus in lots of immigrants to take jobs, the people whose jobs are taken won't be able to afford to move (since they won't be willing to rid in old buses or pick-ups, and have belongings).

  • Christophe||

    most people simply cannot afford to move

    Bullshit.

    You can greyhound accross the country for $200. Most poor people already have vehicles. In the Silicon Valley area, people can and do sleep in their cars for months trying to find a cheap place to stay.

    The reason people don't move is that the benefits they get for staying put usually are greater than the salaries they'd expect, even in a better economy. The welfare trap is a very real thing.

  • wwhorton||

    I've actually thought about this in the past. I was on unemployment briefly a few years ago, and it winds up being just enough to keep you from defaulting on everything at once, but not quite enough to get by. It's really a pretty terrible system if you're actually trying to find work, and especially if you're interested in training to get a better/different job than you had.

    But I digress.

    Anyhow, generally by the time someone is considering moving because of unemployment they've burned through any savings they might have had. So, in a sense, giving someone a lump unemployment check on the condition that they use it to relocate for a new job is an interesting idea. It's just difficult to envision how to prevent more fraud than is currently in the unemployment system, or how to avoid the "Klondike" boom-chasing phenomenon the article mentions.

  • ||

    "Relocation subsidies are attracting new attention these days not as a response to homelessness."

    I always thought being unemployed was different than homelessness.

    If you pay a homeless guy to get lost, won't he likely be homeless elsewhere? Isn't it a choice for some of these people? Who knows why someone is 'long-term unemployed?' For all I know, they're picky, useless, or lazy.

    How will they determine who gets to be relocated? What will be the criteria?

  • Free Society||

    It may not be clear if this is a good idea or a bad one until after it’s tried on a limited scale and evaluated. But it sure is newsworthy.

    Is it at all unclear? You take money from person A at gunpoint and give it to person B to go be a problem elsewhere. Pragmatically it's pointless, morally it's repugnant. Libertarianism is a moral philosophy, Mr Stoll. Morals are easy to see if you have logically consistent principles, which makes it pretty damn clear this is a bad idea.

  • OneOut||

    The oil ith the jobs in companies with jobs in North dakota and South Texas are quite capable of paying relocation sign on bonuses if they get that desperate.

    There is often no housing for a family in these oil booms areas for a workers family anyway.

    I'm not sure that a lot of the small Texas towns around the Eagle Ford Shale want the type of people, and their politics, that would respond to government sponsored relocation efforts anyway and wouldn't cooperate with the initiative.

  • Christophe||

    Bingo. When labor is desperately needed, desperate measures are taken.

    Usually the people who move to booming industrial areas aren't jobless; it's much more likely they're upgrading from poverty-level wages to what often are 6-figure jobs.

  • Christophe||

    This sounds less like a way to get people to find jobs, and more like a really cost effective way for one state to make their welfare rolls into someone else's problem.

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