Why Don’t People Move to Where the Jobs Are?

Commentary about business and finance.
Aug. 22 2013 5:32 AM

Bismarck Is Lovely This Time of Year

To fix the economy, we need to encourage people to start moving again.

Large letter postcard from Bismarck, North Dakota, 1945.
Bismarck, N.D. is one of many cities with low unemployment. Maybe more people should consider moving there.

Photo by Lake County Museum/Getty Images

In the metropolitan area centered around Yuma, Ariz., the Bureau of Labor Statistics believes that the unemployment rate is a terrifying 31.8 percent. Just a bit west is El Centro, Calif., with America’s second-highest jobless rate—23.6 percent. Yuba City and Merced, both also in inland California, come next, with unemployment rates of over 14 percent.

Drive about 800 miles north of Yuma and you’ll come to another small metropolitan area, centered around Logan, Utah, where conditions are very different. In the Logan area, the unemployment rate is just 4.6 percent. It’s as if the full employment economy of the late 1990s were still in swing, while Yuma’s joblessness is worse than the Great Depression.

Lack of mobility is hardly the cause of macroeconomic distress in the United States. But it’s not helping. And it turns out that the population has grown more moving-averse over time. This aversion appears to be particularly concentrated among the native-born working class and especially men—not coincidentally the precise group that has suffered the most severe downward pressure on wages.

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Of course there are always good reasons not to move. Midland, Texas (3.7 percent) is remote. Minneapolis (5.1 percent) is cold. Honolulu (4.7 percent) is expensive. Morgantown, W.V. (4.5 percent) is small. And Bismarck, N.D.—America’s unemployment rate champion, at just 2.8 percent—managed to be remote, cold, expensive, and small all at once. Meanwhile, areas with even the most hopeless economies might offer good cause to stay. People may have relatives to look after in their hometown, or else depend on relatives to take care of their kids. People have friends and family. They have financial and personal commitments. Moving is expensive, and moving to a new pace where you don’t have a job lined up is scary. Ask any given person in any given town why they don’t move to some other town, and the list of reasons will be endless.

But the existence of good reasons not to move doesn’t explain the decline in mobility. Back in 1985 over 20 percent of the population moved. That number fell steadily to 11.6 percent in 2011 before ticking back up to 12 percent last year. What’s more, even if you just look at interstate moves, a lot of the shifting doesn’t appear to be related to a search for employment. New York to Florida (presumably retirees) leads the Census Bureau’s list of the 10 most common state-to-state moves. None of the 10 lowest-unemployment states are destinations of the top 10 interstate moves, and none of the five highest-unemployment states are departure points for the top 10 interstate moves.

This is bad for unemployed people in Rhode Island and Nevada who perhaps could be getting work in Vermont and North Dakota. But it’s also bad for the broader economy. An outflow of unemployed people from high-joblessness regions would reduce pressure on state and local budgets. And in the low unemployment areas, the arrival of more workers wouldn’t just fill job openings. Their presence would make local labor markets more efficient and would spur investment, as the new workers need places to live, places to shop, and tools to work with. That in turn increases demand for goods and services nationally as regions that produce capital equipment or primary commodities get a boost.

Economists Brian Cadena and Brian Kovak recently published research showing that immigrants from Mexico helped stabilize the American economy during the Great Recession in precisely this way—they flowed out of hard-hit areas and toward stronger economies.

Yet the political system seems strangely reluctant to explicitly encourage more mobility as a possible economic fix. In part, people seem to think it’s heartless or condescending to note that many people could improve their job prospects by relocating. But in other respects, keeping relocation off the table is the real condescension. We take it for granted that talented people will leave their hometowns (if only to go to the flagship state university campus) for education, and need to be mobile to maximize their job opportunities. Abigail Wozniak’s 2009 research showed that college graduates are “several times” more responsive to geographical changes in labor demand when deciding to relocate than are non-graduates. Cadena and Kovak confirm this for the recession era, finding “considerable mobility in the expected direction” for college graduates while “among those with no more than a high school degree, only foreign-born populations move in substantial numbers to stronger labor markets.”

The unemployment rate for college graduates is about half that for those with only a high school degree or less, which is often taken as evidence of the value of a college degree. But some of that value may simply reflect geographical mobility. College students are taught to think in terms of a “career” that you pursue by actively seeking opportunity, not just a job to look for locally. We ought to be finding ways to inspire the same spirit all across the educational spectrum. Michael Strain of the American Enterprise Institute suggests giving vouchers to the long-term unemployed to help cover the expense of relocating to a healthier job market.

Ideas of this kind are no substitute for stimulative fiscal and monetary policies to promote broad employment growth, but they’re a perfectly sound complement. Historically, America’s large size and mobile population have made the country robust against shocks. Immigrants and college graduates are still quite mobile, but the country’s native-born, working-class majority is staying put, and it’s hurting them and the whole country.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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