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Free Minds & Free Markets

Why Aren't More Americans Moving?

People used to chase economic opportunity across the country. Then the government got in the way.

StuckIanAllendenDreamstimeIan Allenden/Dreamstime"I believe that each of us who has his place to make should go where men are wanted, and where employment is not bestowed as alms," advised New York Tribune editor Horace Greeley in a famous 1871 letter. "Of course, I say to all who are in want of work, Go West!" Basically, Greeley was telling Americans to pick up and go to where the jobs and opportunities are.

Americans were once more willing to heed Greeley's advice. From the end of World War II through the 1980s, the Census Bureau reports, about 20 percent of Americans changed their residences annually, with more than 3 percent moving to a different state each year. Now more are staying home. In November, the Census Bureau reported that Americans were moving at historically low rates: Only 11.2 percent moved in 2015, and just 1.5 percent moved to a different state. Yet many of the places where people are stuck offer few opportunities.

Why have we become homebodies? In a draft article called "Stuck in Place," Yale law professor David Schleicher blames bad public policy. Schleicher argues that more Americans are stuck in places with few good jobs and little opportunity, largely because "governments, mostly at the state and local levels, have created a huge number of legal barriers to inter-state mobility."

To get a handle on the mobility slow-down, Schleicher identifies and analyzes the policies that limit people's ability to enter job-rich markets and exit job-poor ones. He also describes how economically declining cities get caught in a policy spiral of fiscal and physical ruin that ultimately discourages labor mobility. The effects of lower labor mobility, he argues, include less effective monetary policy, significantly reduced economic output and growth, and rising inequality.

Consider monetary policy. A dollar doesn't buy the same amounts of goods and services across the country. In a sense there are New York dollars, Ohio dollars, Mississippi dollars, California dollars, and so on. Think of what a worker earning the average household income of $30,000 in economically depressed Youngstown, Ohio, would need to have the same standard of living in other more prosperous regions of the country. In San Francisco, according to CNN's cost of living calculator, a Youngstown job seeker would need an annual salary of more than $63,000. (San Francisco's housing, groceries, transportation, and health care are 366, 56, 34, and 42 percent higher than Youngstown's, respectively.) In Manhattan, he'd need nearly $82,000.

The median household income in San Francisco is around $84,000, up in real dollars from $59,000 in 1995. Economic theory suggests that this income differential should be bid down considerably as folks from declining areas like Youngstown move to economically vibrant centers such as San Francisco, but that is not happening. The per capita GDP among the states was converging before the 1970s, as people moved from poor states for more lucrative opportunities in richer states. That process has stopped.

Why? First, lots of job-rich areas have erected barriers that keep job-seekers from other regions out. The two biggest barriers are land use and occupational licensing restrictions. Prior to the 1980s, strict zoning limitations were mostly confined to rich suburbs and did not appreciably check housing construction in most metropolitan areas. But now many prosperous areas in the United States require specific lot sizes, zone out manufactured and rental housing, perversely limit new rental housing construction by establishing rent control, or set up "historic districts" that limit the changes that owners can make to their houses. Land-use restrictions limit construction to boost housing and rental prices to the benefit current property owners who vote for local officials who support restrictive policies.

How much of a barrier to movement are such land-use restrictions? Since 1996 San Francisco's housing stock rose by 12 percent while the price of housing rose by around 340 percent, according to the Case-Shiller home price index. According to the Trulia real estate market analysis, the median house price in San Francisco is $1.2 million, with a median rent of $4,100 a month; in Youngstown it's $93,000, with a median rent of $650. In other words, a Youngstown worker who sold his home for full price would receive enough money to rent a place in San Francisco for 22 months. (It's worth noting that the population of Youngstown has dropped from 168,000 in 1950 to under 65,000 today, while San Francisco's has increased from 775,000 in 1950 to 885,000 now.)

By keeping workers out of high-productivity regions, local restrictions on housing have lowered U.S. GDP by 13.5 percent of what it would otherwise be, according to a 2015 study by the Berkeley economist Enrico Moretti and the University of Chicago economist Chang-Tai Hseih. In fact, they find that "most of the loss was likely caused by increased constraints to housing supply in high productivity cities like New York, San Francisco and San Jose. Lowering regulatory constraints in these cities to the level of the median city would expand their work force and increase U.S. GDP by 9.5%."

Meanwhile, professional licensing requirements have proliferated. Since 1950, state-level licensure has increased from 5 to 23 percent of the workforce. Schleicher notes that more than 1,100 occupations require licensing in at least one state, but fewer than 60 are regulated in all states. A 2015 White House report on occupational licensing found that "interstate migration rates for workers in the most licensed occupations are lower by an amount equal to nearly 15 percent of the average migration rate compared to those in the least licensed occupations."

While land-use and licensing restrictions makes it hard to enter booming job markets, public sector employment, welfare benefits, and homeownership make it harder to exit regions with waning economic opportunities. The nearly 13 percent of Americans who work for state and local governments rely on defined-benefit pension plans that are not easily transferable across state lines. Picking up to take a job in another state would significantly reduce a public employee's retirement benefits. Differences in state eligibility requirements for various poverty relief programs—e.g., food stamps, Medicaid, and Temporary Assistance to Needy Families—also discourage poor people from seeking opportunities elsewhere.

And homeownership rates correlate with higher regional unemployment and lower inter-state mobility. Mobility may be lessened due to the hassle of selling a house. Another possible effect is that homeownership might hold back development in an area through zoning restrictions that are detrimental to new jobs and entrepreneurial ventures. Of course, the federal mortgage interest deduction is a huge incentive encouraging homeownership.

Schleicher identifies city "shrinkage" as another restraint on labor mobility. How do you reduce the physical and governmental sizes of cities that are undergoing economic decline? Cities, especially those built around on manufacturing industries, developed chiefly as a way to minimize shipping costs—e.g., tire manufacturers wanted to be near auto assembly plants. Cities also offer the advantages of deep skilled-labor markets and information spillovers from neighboring enterprises. But mechanization, declining transportation costs, and trade competition have hollowed out many manufacturing cities, and so they need to shrink both their building stocks and the size of their governments.

Cities like Detroit, argues Schleicher, get caught a negative fiscal spiral. Negative economic shocks lead to greater demand for government services rise, which leads to an increase in property and income tax rates, which motivates the remaining businesses and workers to leave. Another economically destructive dynamic frequently kicks in. "Difficulties in reducing government services worsen over time in shrinking cities," observes Schleicher. "As private-sector workers leave, particular populations—net recipients of public services, public sector workers, pensioners—become more powerful in local politics, giving them power to save benefits from declining."

As the spiral of decline worsens, federal and state governments often step in with bailouts. Schleicher points out that, in general, such place-based subsidies ultimately encourage people to stay in declining places. "It is not clear why the country as a whole or a state in particular should want residents to remain in, say, Atlantic City rather than move to the New York City suburbs, which would give them access to a better labor market," he observes.

Schleicher cites one of the odder contentions for place-based subsidies, made by the Stanford law professor Michelle Wilde Anderson. If Oregon taxpayers subsidize public services in economically declining rural areas of the state, Anderson argues, the country people will stay put and be an inspiration to city dwellers. "In my view, historic places and modes of living have existence value, even when they have trouble attracting residents and businesses in a competitive system," she writes. "Just as there is existence value to the forest ecosystems themselves – humankind made spiritually and morally more whole through the existence of households and environments beyond the hustle bustle of urban materialism." Basically, stay on the farm and in small towns in order to gratify urban fantasies about how hardy country folk live.

So what policies does Schleicher suggest be adopted as a way to boost labor mobility? Frankly, he hasn't got much to offer. Loosening land and licensing restrictions would help a lot, but as Schleicher acknowledges, officials (and residents) in booming areas have very little incentive to make such changes. Nor do those in declining areas have much motivation to avoid the fiscal downward spiral Schleicher identified.

Still, Schleicher suggests that the federal government might suspend the mortgage interest deduction for cities that don't allow sufficient housing construction. (Most economists are against privileging homeownership over other investments, and would argue for eliminating the deduction altogether.) Schleicher also suggests that the feds provide incentives to relocate. For example, Congress could increase the amount of the Earned Income Tax Credit for taxpayers who relocate to a new state or move a certain number of miles to take a new job.

Such remedies aren't strong enough to alleviate the ailments that Schleicher has diagnosed. Nevertheless, identifying the maladies is the first step toward finding a cure. "Politicians should consider pushing for reforms that will break down geographic barriers to opportunity," Schleicher concludes. "Doing so will not only make the country richer but it would also aid the political goal of forging one economy and people from our many regions and groups."

For more background see my Reason January feature article "Stuck" on my visit to McDowell County, WV which is one of the poorest counties in America.

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  • Lee Genes||

    Employer provided health insurance

    It's a ridiculous system that warps the employer/employee relationship.

  • gaoxiaen||

    Benjamin Franklin said that three moves is the same as a fire.

  • OldMexican Blankety Blank||

    Schleicher argues that more Americans are stuck in places with few good jobs and little opportunity, largely because "governments, mostly at the state and local levels, have created a huge number of legal barriers to inter-state mobility."


    Indeed? So nativist xenophobia is not limited to foreigners but is also directed towards bumpkins?

  • Lee Genes||

    Have you met those people? Sheesh, they smell like cabbage and despair.

    *sips chardonnay while perusing Architectural Digest*

  • Swiss Servator||

    chardonnay?!

    *breaks empty port bottle and waves jagged shard menacingly*

  • LurkinInaBuildin||

    Chardonnay??

    PORT?!

    *quietly picks up glass of Chablis and moves to table across room*

  • billstewart||

    Dude, you're parroting Sarah Palin's cluelessness. You know why liberals drank Chablis back in the 70s, before Chardonnay replaced it as the standard white wine? Because they were academics, and therefore broke, and Chablis was cheap white wine that came in big jugs (before box wine was invented), and it wasn't as bad as the cheap red, especially if you lived in the Northeast (NY State grows good white wines, but the native red grapes are really bad.)

    And most of the cheese for an academic wine & cheese party came from the ag school's dairy farm, so if there was brie at all it was because there was an assortment of cheeses and not just cheddar and jack in cubes with little toothpicks in them.

  • Threedoor||

    sips Chuck Shaw merlot, at home, from a straw.

  • R C Dean||

    Interesting observation. It almost looks like nativist xenophobia is a constant, which expresses itself in different ways. In your big metro areas with overt "safe space for illegal immigrants" policies, its aimed at their fellow countrymen, while out in the stick, its aimed at foreigners.

  • The Fusionist||

    At least the illegal immigrants are on a path to voting Democratic...I mean a path to citizenship.

  • Rhywun||

    out in the stick, its aimed at foreigners

    And city-folk.

  • BakedPenguin||

    "You got any kin around here, boy?"

  • ||

    First year I was here, BP, I heard the exact phrase in the more....rustic...areas of The Steppes. Particularly when we had to load up the ambulance van and go do old-fashioned, country doctorin', rural care outside of Donet'sk.

    Needless to say, everyone was armed, and we had security with us to make sure we didn't get robbed by highwaymen or get jumped at the destination so the meds and supplies wouldn't be....liberated.

  • John Titor||

    That's the bloody Cossacks for you.

  • Swiss Servator||

    "Stand and Deliver!"

  • Number.6||

    "Adam Ant on the courtesy phone, Doctor"

  • Rat don't serf||

    Your lupins or your life!

  • Jay Dubya||

    its not lupus

  • defenestrate||

    It's *never* Lupus.

  • John Titor||

    And city-folk.

    Hey now, my hatred of city-folk is for completely legitimate reasons. Unlike everybody else's reasons for hating me.

  • Zeb||

    And with good reason.

  • Rhywun||

    Right back atcha, hayseed.

  • Zeb||

    I'm sure I am weird and annoying when I visit the city. But at least I don't move there, complain about the lack of government provided services and get involved in local politics so I can raise taxes and complain about people shooting guns and keeping livestock.

    I'm sure some of them are good people.

  • You're Kidding||

    I have friends who live in the country, 200 miles from the San Francisco Bay Area. As the wealth and population have expanded here, plenty of city folk have bought a place out in the country, where my friends live.

    Those friends resent the city folk who come "to get away from it all" but then complain about the lack of government services - buses, reliable water, instant law enforcement response, etc. - and try to change it.

    Change it to exactly what they are "getting away from" in the first place.

    I guess it's just human nature.

  • James Solbakken||

    "Change it to exactly what they are "getting away from" in the first place.
    I guess it's just human nature."

    It's very simple, really. People are stupid idiots, with their heads up their rear end and excrement for brains. And that is putting it nicely, as it were, so to speak. This is true of people generally, but more especially true of people who live in big cities. There is just something about urban living that turns a person's mind to excrement and their heart to stone and kills their human spirit.

  • ||

    And city-folk.

    Damned straight. We don't go in for any of that fancy nativist xenophobia. Just the regular ol' xenophobia.

  • HeteroPatriarch||

    I wasn't around last week. Did Reason not say anything about the tweet from the San Francisco lady that was like "If you want us to move to West bumfuck and give you yokels jobs, stop being racist and stupid and boring and stop hating us?" That would really be a perfect link for this article.

  • HeteroPatriarch||

  • The Late P Brooks||

    "Of course, I say to all who are in want of work, Go West!"

    OKIES NOT WANTED

  • ||

    Ukraine disagreed. Whether that ultimately will be fortuitous, has yet to be written.

  • waffles||

    From wikipedia: About one-eighth of California's population is of Okie heritage

    Well that explains so much.

  • Jimbo||

    Okie, Dokie.

  • You're Kidding||

    I live in CA. I call BS.

    Plenty of Okie stock here. Sure. But, 12.5%? No way!

    Well, maybe if you classify the estimated 11 million illegals as Okies.....

  • billstewart||

    I'd believe 12.5%, at least a few years ago - not in San Francisco, but certainly in Bakersfield and the gringo parts of LA. And the Mexican immigrants who moved here did so for mostly the same reasons as the Okies did - failing farms back home, job opportunities in the Golden State. My Iowa ancestors-in-law who moved to California were also doing the same (Garden Grove, in LA, is named for the town in Iowa they left, though my ancestor from there farmed and oil-hunted in Texas, OK, Colorado, and later Kansas.)

  • HeteroPatriarch||

    It's also much more pleasant to be homeless in LA than in Minneapolis or Houston. Climate-wise, anyway.

  • Johnimo||

    We don't take our trips on LSD; we don't burn Old Glory down at the court house ....

  • billstewart||

    Don't kid yourself - they smoke lots of marijuana in Muscogee.

  • HeteroPatriarch||

    They've mostly moved on to meth. Doesn't have the same connection with dirty messicans.

  • R C Dean||

    Why? First, lots of job-rich areas have erected barriers that keep job-seekers from other regions out. The two biggest barriers are land use and occupational licensing restrictions.

    Why anyone would think that reduced mobility wasn't a foreseeable result of these policies, I couldn't say.

  • ||

    It's almost like powerful interests can't help finding money. Almost like it's thrown at them.

  • juris imprudent||

    Hindsight is the only visual opportunity to those with their heads up their arses.

  • AFSlade||

    May I, ahem, borrow this as needed? I don't know if it's yours, but that's a wonderful turn of phrase.

  • Jimbo||

    That may be true, RC, but each individual locality only cares about themselves. Even if they agree that the end result is reduced mobility, how does that negatively affect them? Harder to show the increase in GDP and the benefit that would bring to everyone.

  • Rhywun||

    Go West

    Tried that; I hated it.

  • Lee Genes||

  • Rhywun||

    I was expecting Village People and so was preparing a narrowed gaze; as a child of the 80s I of course thought of your song first.

  • Jimbo||

    Try anal. You might enjoy it!

  • The Late P Brooks||

    A dollar doesn't buy the same amounts of goods and services across the country.

    How the fuck do you ascribe that to "monetary policy"?

    Why should I bother reading any farther?

  • R C Dean||

    I hicccuped on that one, too. Monetary policy changes how much a dollar buys over time, not over space.

  • ||

    Monetary policy made the Kessel run in less than 12 parsecs.

  • ||

    WHATTA PIECE OF JUNK!

  • Zeb||

    Using parsecs in a multiplanetary society makes no sense. Whose parsecs are we talking about here?

  • Longtobefree||

    And remember, female parsecs are only 70% of male parsecs.

  • LynchPin1477||

    We should use the wavelength of the hyperfine transition of hydrogen as our fundamental distance scale.

  • kbolino||

    ... as long as that space has uniform monetary policy. Are there any differences in state-level banking regulations that would significant enough to affect credit availability and interest rates?

  • R C Dean||

    No. I would be shocked if you could find even a basis point's worth of difference due to state level regs.

  • kbolino||

    Yeah, I guess the Federal intervention/takeover of that sphere is nearly complete.

  • Ron Bailey||

    TLPB: Yes, I could have done a better job explaining what Schleicher means with regard to how the existence of boom v. bust regions affects monetary policy. Basically, he is concerned that the Phillips Curve relationship between inflation and employment no longer holds because of regional boom/bust differentials. The idea is when unemployment is too high the Fed can inflate the currency which increases demand and lowers relative wages so that employment goes up. The problem as Schleicher sees it is that if Fed does that now, it produces much higher levels of relative inflation in areas that are already booming, but does not much increase employment in depressed areas since job opportunities are scarce in such places.

  • juris imprudent||

    Macro economics tells you about as much as today's average temperature across the country.

  • The Fusionist||

    I wonder if Bill Kauffman, the former Reason contributor who is into localism, would say to this article?

    And I'm glad to get the context of Greeley's quote - he was addressing job seeking young men who presumably couldn't find jobs where they were, or at least not good jobs.

  • The Fusionist||

    I wonder *what* Kauffman would say...

  • jelabarre||

    Having lived in the Clinton-loving town where Greeley later lived (he bought his property from my ancestors, BTW), I've often thought he wanted to get the undesirables out of town because they were degrading the property values. It's certainly what the rest of the ilk in that town would think.

    (Speaking of Clinton-lovers; I find it interesting how corrupt, womanizing liberals have a thing for towns that start with "Chappaq..."

  • AlmightyJB||

  • BakedPenguin||

    Wow, that's amazing. When the cops got to the scene, the didn't shoot the citizen who helped the cop.

  • {|}===[|}:;:;:;:;:;:;:>||

    On a lighter note, most of the Maricopa guys I know are more than happy to have a citizen lend a hand. Maricopa county is huge and the officers are spread pretty thin, backup can be an hour or more away if you're on the highway. Sheriff's department actually has an all volunteer armed posse.

  • Vhyrus||

    This is Arizona, son. Everyone has a gun, and the cops like it that way. When I slammed into the side of the guy who cut me off on my motorcycle, the cop that showed up asked to see my registration. I told him it was under the seat, but I also informed him there was a handgun there as well. He looked at me with the most uninterested expression and said ".....so?"

  • ||

    My family is a case in point on this.

    My father left back in the mid-90s, to come to Texas, because the opportunities were better. The rest of my extended family was aghast that he would leave the western Kentucky/southern Illinois ghetto. Like we think we're better than them or something.

    When I ask my relatives who are still there why they don't leave (there are no jobs there), it's some combination of, this is where I grew up, roots, family, friends, blah blah blah. None of which answers why I'm supposed to subsidize your ass.

  • Lee Genes||

    From my experience it's mostly fear.

  • Rhywun||

    Those other things are more important to a lot of people. *shrugs*

  • ||

    I get that; still doesn't answer my question of why they feel entitled 1) to welfare in various forms, and 2) to bitch about how poor they by staying there.

  • Lee Genes||

    Because it's easier than admitting they made a mistake.

  • Rhywun||

    Which "they"? All of them? I doubt that.

  • ||

    Any of them. If you choose to stay someplace, then you are choosing all of the problems that come with that place. No one who had/has a chance to leave an economically distressed area and decides not to should ever complain about any problems arising from living in an economically distressed area.

    You want that life, fine, that's your call. But do it on your own dime and stop bitching about what a rough hand fate dealt you. It wasn't a bad roll of the dice, if was your choice to value certain things over the possibility of materially bettering yourself.

  • Rhywun||

    I can't disagree with that.

  • ||

    It may come across that I'm sneering at bumpkins, but I'm not - I'm pure hillbilly by blood & birth. I'm sneering at people who sit in their crappy section 8 housing, getting fat on Hostess cakes & soda, cashing their welfare checks and expecting the state to pick up their medical bills & pay their "disability", all the while sneering themselves at the hated Liberal Big City Coastal Elites.

    And that describes 1/3 of my family.

  • DevilDog943||

    I would agree completely with this. I have talked to people who cannot conceive of moving to someplace where their economic opportunities are far greater than the small 'hometown' they grew up in because "family" is more important than anything else. For me, I am convinced that MY well being and chances for economic advancement are more important than "family" are paramount. I think that family loyalty AND fear of leaving the tiny pond for a scary ocean are what keeps many stuck in a dead end town with no more future than a hand-to-mouth subsistence level 'job'. They shall reap what they sow...

  • Thomas O.||

    And of course these people continue to vote for the politicians that prioritize the welfare gravy train over reforming bad laws that keep potential employers away.

    I have the same contempt for those "new economy/new jobs" employers that continue to set up shop in those places that are already overcrowded (which in turn keeps housing prices incredibly ridiculously high). Do we REALLY need another biotech or high-tech venture in the California Bay Area? Plenty of other places in the country that can attract the workers you need. And you don't have to pay a multi-millionaire salary because where they live costs considerably less than $1000/month!

  • Priscilla King||

    As a child I had both the experience of being dragged across the continent by thrill-seeking parents, and the experience of living in a decent (though shabby) home, among family, with parents who'd settled down to living within their very slender means. (Not entirely a choice: Mother went from making big money to being unable to work.) Trust me--from the child's point of view, economic advancement beyond the starvation/homelessness level is good, but "family" is better than further economic advancement. A child would rather have a stable home and secondhand clothes than be a nomad and wear designer labels.

  • robc||

    They don't even need to leave Western Kentucky, just move to BG like everyone else has done.

  • robc||

    Proof - Bowling Green population since ww2 (and growth rate):

    1950 18,347 25.8%
    1960 28,338 54.5%
    1970 36,705 29.5%
    1980 40,450 10.2%
    1990 40,641 0.5%
    2000 49,296 21.3%
    2010 58,067 17.8%

  • ||

    True story: when we first tried dial-up internet at the house (a "suburb" of Paducah), the nearest place to dial into was in BG, and I racked up a huge long distance bill (remember those?).

    That put an end to our early internet experiment. It was like Earthlink or Prodigy or some shit.

  • robc||

    270 is 270.

    Or was it still 502 at that time? I dont remember when 502 split.

  • robc||

    Area code 270 was split from area code 502 on April 19, 1999.

    I would have guessed much earlier, so, yeah, it was 502 in the Earthlink/Prodigy days.

  • robc||

    Apparently 364 is an overlay area code of 270, but I don't think I have ever seen a 364 number.

  • ||

    Hmm, I think my area code was 270, and this would have been in like 95/96. So maybe there WASN'T a big long distance bill & my parents lied to me so I wouldn't be fucking around with the computer constantly?

    Is that how that works? If it's in your area code, you don't pay long distance?

  • robc||

    No, I was kidding about the 270 is 270 thing. Paducah to BG would have been long distance even with the same area code.

  • ||

    Good to know - I was going to have *another* point of contention with my mother otherwise.

    By the time I went to college (analog) cell phones were fairly ubiquitous, so I never had a land line & have no earthly idea how long distance works. I loved my old little Motorola with pea-soup green screen.

  • Rat don't serf||

    Area codes could only have a 0 (full state) or 1 (split state) in the middle until the 90s.

  • Priscilla King||

    You're inviting them to apply for jobs that you know exist, for which you can recommend them? Or you're just throwing out the suggestion that they *might* find jobs...any leads on where?

  • Fist of Etiquette||

    "As private-sector workers leave, particular populations—net recipients of public services, public sector workers, pensioners—become more powerful in local politics, giving them power to save benefits from declining."

    You could have mentioned that Schleicher is racist at the start of the article.

  • Pan Zagloba "The Stickler"||

    Since 1996 San Francisco's housing stock rose by 12 percent while the price of housing rose by around 340 percent, according to the Case-Shiller home price index. According to the Trulia real estate market analysis, the median house price in San Francisco is $1.2 million, with a median rent of $4,100 a month;
    San Francisco's has increased from 775,000 in 1950 to 885,000 now.

    So, 12% increase in housing in 20 years vs 14% increase in population in 65. The zoning restrictions don't come close to explaining 340% increase in price. Supply is tracking demand here by pure numbers. What has changed is that more capital has poured into the city, and bringing more poor people into it will do nothing. Dick all you like with zoning, why build a $93K house when you can build a $930K one?

  • Pan Zagloba "The Stickler"||

    Economic theory suggests that this income differential should be bid down considerably as folks from declining areas like Youngstown move to economically vibrant centers such as San Francisco, but that is not happening.

    Because people aren't spare parts with full compatibility. How many people in Youngstown have the skill set that is in high demand in San Francisco? Tech industry is pretty mobile, and the only reason hordes of SQL developers and Unix sysadmins don't move from depressed cities to the coasts is that most of them do it right out of college.
    In fact, I'd expect the income differential to increase if more people start moving in. Low skill work will have high supply and price will drop precipitously (minimum wage vs working for cash is probably a washout). High skill work may get a small uptick in supply, leading to much smaller price drop.

  • You're Kidding||

    Economic theory also suggests that capital flows to where labor is cheapest.

    So why aren't the jobs moving to Youngstown?

  • Fairbanks||

    Capital flows to where the risk-adjusted return-on-capital is highest. Workers with skill levels needed by tech companies don't want to live in Youngstown.

  • DRM||

    "Supply is tracking demand here by pure numbers."

    Um, no. You just failed Microeconomics 101, horribly. You are now fully disqualified from having an opinion on any economic matter whatsoever.

    The number of people living in SF is limited by what the supply of housing allows. If demand for housing in SF goes up 300%, but the supply of places to live only goes up 12%, then the increase in population will be a lot closer to 12% than to 300%. Because, and this should be blatantly obvious, there would be nowhere for them to live in the city limits. The result of the increased demand will not show up in population figures, but the price for housing in SF (as the price is bid up to the market-clearing price), and in increased sales of the closest available substitutes that do increase in number (for example, increases in the population of neighboring places that allow new construction).

  • Stormy Dragon||

    From the end of World War II through the 1980s, the Census Bureau reports, about 20 percent of Americans changed their residences annually,

    "Annually, about 20 percent of Americans changed their residence" does not mean the same thing as "About 20 percent of Americans changed their residence annually."

    I'm getting sick of supposedly professional writers who just randomly jam modifiers into sentences wherever they like.

  • kbolino||

    It is well established that there are no editors at Reason.

  • Citizen X||

    Everyone is an editor, therefore no one is an editor.

  • You're Kidding||

    Blame the internet. Everyone is an expert now. Or, an editor.

  • Sir Chips Alot||

    perhaps free college will give us more editors :)

  • Rhywun||

    There are no editors at well-established Reason.

  • Stormy Dragon||

    It's not just here, it seems to be happening everywhere lately. Writers just randomly sprinkling modifiers, phrases, and clauses all over the place and leaving it up to the reader to figure out what each is actually referring to based on context.

  • Ron Bailey||

    SD: Makes reading an adventure! :-)

  • Vernon Depner||

    "...leaving it up to the reader to figure out what each is actually referring to based on context."

    Isn't that usually pretty easy?

  • The Fusionist||

    Greeley's "Go West" letter

    Also:

    "Horace Greeley was born on February 3, 1811, on a farm about five miles from Amherst, New Hampshire....

    "In late 1831, Greeley went to New York City to seek his fortune....

    "He is buried in Brooklyn's Green-Wood Cemetery."

  • robc||

    Brooklyn is west of NH.

    Every NYer who retires to Florida is going west.

  • Rhywun||

    GO EAST... I would retire in Maine or NH before Florida - too hot there.

  • LarryA||

    But you don't have to shovel hot.

  • Fist of Etiquette||

    Most economists are against privileging homeownership over other investments, and would argue for eliminating the deduction altogether.

    OH. MY. GAWD. You can have my mortgage deduction when you pry it out of my cold, dead 1040.

  • R C Dean||

    Most economists are against privileging homeownership over other investments,

    IF you look at it solely as an investment, sure. But there are other values attached to homeownership. Not that I disagree, necessarily, that we should get rid of the deduction for mortgage interest.

    Much like trade policy, which is often discussed by economists (and libertarians) as if it exists solely in a one-dimensional realm where the only thing that exists is money. Life is bigger than that, and home ownership, trade policy, and a myriad other issues are multi-dimensional. Failure or refusal to recognize this is a big reason why people talk past each other so much.

  • Zeb||

    Treating it like other investments for tax purposes would presumably also include paying tax on capital gains.

  • Jimbo||

    Over time, nationwide house prices have historically tracked inflation plus (maybe) a small increase over that. I'd hate to have to pay a tax on my "gain" that wasn't really much of a gain. Sure, I get it's the same for other things like stocks you sell, but almost any tax on the sale of a house would result in a loss after inflation.

  • robc||

    The original income tax gave an interest deduction. Can you imagine the credit card ads today if their debt was deductible?

  • robc||

    interest was deductible, not the debt.

  • junyo||

    I was doing tax prep in the years when the real estate bubble was building. If I had a $20 for every idiot I saw who'd bought a house, with no good reason to buy a house, because "the tax write off"... It would have been a lot of money, and I'd probably have blown in on some chick with tig ole bitties. But that's besides the point. Seriously, I had some dude that got a sweetheart of a VA loan where they were practically paying him to take the money (IIRC this guy was somehow @ or around 1%, no money down) and he was pissed, PISSED, that he couldn't itemize. I tried to explain that he was, in fact, getting a ridiculous deal on the house, but he wasn't having it. All his friends had sworn he'd get soooo much money back if he bought a house and he wasn't getting any more than if he hadn't, which was bullshit apparently.

    My darling wife bought a house/money pit before we were married for exactly the same reasons, and I'm still trying to unfuck that. So yeah, a lot of people got anchored to a spot because of a poorly considered housing purchase, and worse some were more willing to go underwater because the mortgage deduction is such a big draw for a lot of people that are marginally in the middle class. (A max size house plus a little more of my own money back? Way that is a sweet deal!) It really needs to get gone.

  • You're Kidding||

    I had a tax practice long before the RE bubble. People were always saying they "needed the deduction". To justify mortgage interest as well as many other things.

    My standard reply became: "Sure. Spend a dollar to save a quarter." They never go it.

    But, then again, neither did I.

    I was an honest sort who tried to help people retain their earnings and NOT end up with a huge tax refund the following year. I was doing them a favor.

    But, I realized too late that, having them grossly over withhold on their paychecks was what a good salesman would do. They judged my work by the size of their refund. It didn't matter how hard I tried to explain the fallacy of a refund vs the amount of taxes they paid.

  • Gaear Grimsrud||

    " I had some dude that got a sweetheart of a VA loan where they were practically paying him to take the money (IIRC this guy was somehow @ or around 1%, no money down) and he was pissed, PISSED, that he couldn't itemize. I tried to explain that he was, in fact, getting a ridiculous deal on the house,"
    I guess it depends on what you consider a "ridiculous deal". This guy was underwater at closing and unless he doubles his principle payments he'll never "own" his house. Fedgov and the FED have been obsessed with what they call "home ownership" for decades but I don't think I agree with their definition of the term. 40 year notes, no down payment, closing costs mortgaged, refi every 5 years to pay off credit cards, always relying on the fantasy that real estate always appreciates. The residential real estate market is so full of perverse incentives nobody has any idea what an arms length purchase would actually look like. The only way most of the middle class will ever "own" a house is if they inherit one.

  • Sir Chips Alot||

    why should i subsidize your home buying?

  • The Late P Brooks||

    Go West
    Tried that; I hated it.

    What sort of monster doesn't like the Marx Brothers?

  • ||

    An anti-(((Semite))) Troomp supporter. Duh.

  • flye||

    Opera and equestrian events? Elitists.

  • The Late P Brooks||

    The idea is when unemployment is too high the Fed can inflate the currency which increases demand and lowers relative wages so that employment goes up.

    Sure. A chicken in every pot.

  • Swiss Servator||

    Free-range, non-GMO, Gluten Free, Fair Trade chicken?

  • juris imprudent||

    "We actually decided against the chicken. We're gonna do the salmon."

  • GeoffB1972||

    You do realize they just leave them on the boat deck till they die of suffocation. The chicken is killed much more humanely.

  • You're Kidding||

    Glorified weed whackers cut off their hanging heads?

  • Vernon Depner||

    Actually, the weed whackers sometimes miss, leaving the chicken hanging alive to be scalded to death in de-feathering.

  • Robert||

    Another factor is 2-income households. What's the chance that it's a convenient time for both spouses to take a new job opp'ty elsewhere? One may have one waiting, but if the other doesn't, and the reliance on both incomes is heavy enough, then it may not be worth the loss of the other's job for one to take a better one. You never know, the other might eventually find a comparable job in the new location, but these days employers are taking so long to hire that if you're in a specialized enough field, you're taking a big chance quitting anything—even though job security is less these days too. Actually because of specializ'n, getting a new job opp'ty even for one is hard. You're not qualified, you're overqualified....

  • Pan Zagloba "The Stickler"||


    Another factor is 2-income households. What's the chance that it's a convenient time for both spouses to take a new job opp'ty elsewhere?

    Damn, good point. In them olden days (pre-70s), it was broadly understood that we move if Paw says me move. Nowadays it's a much more complex decision.

  • You're Kidding||

    In my family, it was Maw who said we move. Paw was pretty much whipped.

  • Mickey Rat||

    That is what I was thinking as well, and it gets back to the thing that people are not widgets and their jobs are not necessarily the defining priority in their lives. So they do not move as easily as materials and as economists models think they should.

  • You're Kidding||

    "their jobs are not necessarily the defining priority in their lives"

    Not so with the greatest generation and the baby boomers. Today's young people are doing better at not falling into this trap.

    However, the most common question we still receive when meeting someone new is some variant of, "What do you do for a living?"

    What does that tell you?

  • Ceci n'est pas un woodchipper||

    I'm in this exact situation. My wife and I make exactly the same amount of money, but she's at a very high level in a very location-dependent profession, where I'm at a low to mid-level of a very location independent profession. In fact, I could probably make twice what I currently make in any number of other places. Problem is, it would have to be enough to support both of us, and so much that my wife would rather abandon her professional career (and let her PhD go to seed) than stay where we are. She loves it here, I think it sucks, and I'd like to make more money, but the cost to get that whole move working is prohibitively high in terms of finance as well as professional satisfaction. Besides which, all her family is in the area, which is another heavy anchor.

  • Dadlobby||

    also divorced or never married with children as the "non custodial" parent won't move so as to stay near children and the "custodial" won't move knowing it will instigate a custody battle.

  • The Late P Brooks||

    If the price of bacon skyrockets as a result of some porcine disease epidemic, that's not inflation.

  • JFree||

    I think I'm realizing why I am a classical liberal - not a libertarian. This tendency to blame gummint gummint gummint - when gummint is merely the vehicle. We are the ones who want all the homeownership cronyism (and that is easily the main reason mobility has dropped). We are the ones who resist any change to it. If gummint didn't exist - we would find an alternative vehicle to get some free lunch.

  • You're Kidding||

    You are likely to get shot using those alternative vehicles.

    Whereas, when it's from the gummint, it's wholly sanctioned.

  • ||

    No kiddin'.

  • Ceci n'est pas un woodchipper||

    Well, to be fair, the link between classical liberalism and libertarianism is summed up in the famous quote, "That government governs best which governs least." People can want all sorts of bad things, but without the coercive force of the state they have a very limited ability to force those desires on others.

  • JFree||

    The difference between the two is that classical liberalism (and little dogs from Kansas) always understood that power is exercised by people not by deus ex machina - and so it won't simply disappear. The more you focus on the noise of the machina the less attention you pay to the people behind the curtain who benefit from the noise. Even if it is us ourselves - as it often is.

    IDK. The more I read this site and the commenters, the more I realize that classical liberalism could often be pessimistic (Not only the prejudices of the public, but what is much more unconquerable, the private interests of many individuals, irresistibly oppose it (economic liberty) - Smith). But modern libertarianism seems to lead nowhere but smug fatalism - political insha'allahism.

  • Robert||

    I could think of a non-gov't vehicle to achieve the same result: land collectivism, by the mechanism of HOAs expanding to fill so much space, with covenants vs. renting, that rentals became very rare.

  • JFree||

    Re land specifically. Without govt to delineate/enforce claims of monopoly use (which don't become rights until govt does enforce the claims), land/place will revert to exactly what it is in nature or in nomadic cultures. You can claim whatever you want, but it only matters to the extent you can protect it from a bigger better predator who doesn't (and shouldn't in theory) give a crap about your steenkin rules. Ain't no houses/factories/offices built with that tenuousness.

    All of which means that the coercion/power is an eternal given. As natural as natural rights. The historic frontier was never about escaping that. It was about making monopoly claims for yourself (for those who didn't 'have') - in the expectations that govt would enforce those as vigorously as they did in the place you fled.

    I'm not sure 'rentals' are the problem. I actually think 'housing as an investment' is the problem. THAT is what creates the incentive for those who 'have' to feel entitled that govt should protect that investment - and not even just the legal claim (and they aren't even willing to pay for that latter service/coercion).

  • Toots shor||

    Can I carry my white privilege across state lines? Until I can get get a definitive answer on that, I'm staying put.

  • Slocum||

    The 'decline of manufacturing' is a common misdiagnosis of the problems of the city of Detroit. The auto companies are still in the area (along with a lot of foreign manufacturers and suppliers) and the number of people in the SE Michigan region has grown by a million and a half since 1950. It's just that during that time, two thirds of the population of Detroit moved to the suburbs and exurbs due to a combination of high taxes, bad services, high crime and racial polarization. In 1950, Detroit had 1.5 million whites (out of 1.8 million). That number has declined to about 50,000. It's really not much of a simplification to say that what happened to Detroit was -- nearly all the white people (who had most of the money) moved out.

  • Karen24||

    I think the best answer to this is "people are really complicated." Moving for a job is easy for young single people with no property and no other reasons to stay put. A 50-year-old with a family, a mortgage, and a working spouse is not going to be able to pull up stakes on a whim, regardless of occupational licensing rules or zoning restrictions. (As for the 'build a lot of cheap housing" solution, if the job market slows down in the city with all the cheap apartments, that city now has a lot of empty buildings just ready to decay into instant slums. The real-world example of cheap housing for a highly mobile population is the trailer park*, and it would be worth analyzing the good and bad points of such places in articles like this.)

    *I feel obligated to note that there is nothing inherently wrong with trailer parks. There is often a lot wrong with how they're managed and how they treat their residents, but manufactured housing itself is necessary and useful.

  • billstewart||

    The article doesn't mention another major problem with moving - the two-income family. Leaving the state to find one parent a job means the other parent also has to find a job in the new location. Some traditional female jobs are pretty portable - schoolteachers, nurses, retail - but better jobs are harder to find, and feminism let women get some of the better jobs, and two-income families means the price of housing gets bid up, which forces single-income families to become two-income to compete for decent housing.

    Also, yes, the population of San Francisco area grew a lot - back in the 1990s, the Internet meant you could work from anywhere in the world you wanted, so lots of people moved here, where a high school education and a few hours of HTML training turned you into a highly-paid web designer, and while you might be able to build the contacts to let you move back to Youngstown and work remotely for an SF company, you had a lot more leverage if you stayed here.

  • Animal||

    I just signed a 12-month contract to help a Silicon Valley company get their QMS shit together. I scouted around some for corporate housing, finally deciding on a one-bedroom furnished apartment a 5-minute walk from the client.

    And (granted furnishings are part of the rent) it's costing me almost $5k a month for a 600 sq ft one-bedroom apartment. That's over twice the mortgage payment I have on a 4800 sq ft, 5 bed, 3 bath house in Denver.

    I bid the job with that in mind so I'm still making money on the deal. But holy living fuck.

  • Threedoor||

    "The nearly 13 percent of Americans who work for state and local governments".

    Fire up the wood chippers, that's an entire order of magnitude too many.

  • Priscilla King||

    I'm surprised nobody else has mentioned this...in this fast-moving global economy of ours, there may be enough turnover in a few "young people's jobs" that it's worth the trouble to move. That turnover does not exist in the jobs that are available to anyone over age 30...or that pay enough to cover the cost of moving and renting.

    "'Good' jobs here don't open up even once a year. Why don't you move?" seems to be something people just blat out because they're uncomfortable with a friend or relative living on an income much lower than theirs is, not because they have any useful suggestions. These people should be asked to specify what job they're offering to the person they're annoying with this line.

    For a 40-year-old who's been laid off in Poorville, where there are eleven possible full-time employers and none of them has had a vacancy in the past two years...but where our 40-year-old already owns a home, has friends with whom s/he can barter, and pays less inflated prices for groceries and utilities...that 40-year-old's chances of eating a balanced diet without food stamps are better in Poorville than they would be in Richville, where miserable apartments cost $1000 a month, neighbors don't speak to each other, grocery and utility prices are up to twice what they were in Poorville, and our 40-year-old may STILL be advertising lawn care services from door to door.

  • TBlakely||

    Actually, leftists hate American mobility. They'd far prefer that all regions had the same tax codes, laws and regulations. None of that states rights crap. They really don't like the idea of people moving away from their economic, hyper-regulatory, high crime urban hellholes for greener pastures elsewhere. On the other hand people in red states hate it when their cities become infested with leftist refugees since they immediately try to implement the same policies that created the hellholes they fled from.

  • flashgordon||

    It's easy to pick the Bay area out as an example of high prices. I have lived here a long time and my personal opinion is every city manager here could be a stark raving libertarian and it might mean a better supply and prices that are 25% lower than they are, but no more. It's a nice place to live and that attracts the wealthy from everywhere. One house I sold in Palo Alto was bought for cash by the proceeds of 3 million Chinese dinners in Taiwan. I call it 100 p to e's meet single family zoning. There are a lot of really successful companies here, and I mean equity successful, and the top 20% of the people in those companies get those gains and are out bidding in the real estate market. If people managed their money better I think it would be worse than it is. So I would just call coastal California a special case and then explore the thoughts of this article, which I generally agree with. I thought he was going to say that government benefits like welfare and food stamps kept people where they are.

  • Ron Bailey||

    f: I thought he was going to say that government benefits like welfare and food stamps kept people where they are. They do. From the article: "Differences in state eligibility requirements for various poverty relief programs—e.g., food stamps, Medicaid, and Temporary Assistance to Needy Families—also discourage poor people from seeking opportunities elsewhere."

  • CE||

    I blame housing prices. The 10 percent transaction cost on a 150K house is 15K. On a 250K house it's 25K. It's a much bigger hurdle.

    When housing prices are going up, you can cash out your gains and cover the transaction cost and get a new house. When housing prices are flat or falling, most people don't have liquid cash to be able to move.

  • malakai sparks||

    Great article. I think people are not moving as much is because they can work from home and don't need to move for jobs. The world is rapidly changing with the use of technology.

    Malakai Sparks
    http://malakaisparks.com/

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