Friday, October 18, 2013

Americans are staying put, and that's bad


Americans are moving far less often than in the past, and when they do migrate it is typically no longer from places with low wages to places with higher wages. Rather, it’s the reverse. That helps explain why, since the 1970s, income inequality has gone up and upward mobility has (depending on who you ask) either stagnated or gone down.

Americans are getting more sedentary, and not just when it comes to their couches:

In the early 1950s, about 3.5 percent of all American households moved from one state to another in any given year. This proportion held up through the 1970s, and then started to fall around 1980. By 2006 interstate migration had dropped to 2 percent, and by 2010 to just 1.4 percent, or less than half the rate of the early 1950s. The latest available data, for 2011-12, shows interstate migration still stuck at a mere 1.7 percent. Though it may not square with our national self-image, America today is a nation of people who tend to stay put, with a population that is no more mobile than that of Denmark or Finland.

So what isn't the explanation for all this, according to Tim Noah?  Not aging Baby Boomers. Not two-income-earner households. Not "housing lock" due to underwater mortgages.  Not telecommuting.  Not state income tax rates.  And certainly not an abundance of jobs at home:

But while unemployed people remain likelier to migrate than employed people, they are much less likely to migrate than in previous decades. In 1956, for example, 7.6 percent of unemployed males moved from one state to another during the previous year. Subsequently that rate fell to 7 percent (1966), 5.9 percent (1976), 5.3 percent (1986), 4.4 percent (1996), 4.3 percent (2006), and, finally, 2.7 percent (2012).

It gets worse:

The larger picture is one in which migration is not only declining but also tends to be away from places where, according to recent studies, young adults have the best chances of moving up the income scale.

In essence, we're talking about a failure of the free market for labor, in the fourth most efficient labor market in the world (efficient from employers' point of view):

If labor markets were operating efficiently, construction workers, along with electricians, plumbers, nurses, nannies, elementary school teachers, and other working-class Americans, would receive enough compensation to live near the places where their work is most needed. But our labor markets are not efficient; rather, they are rigged and skewed, offering too much compensation to people with some skill sets (merging companies and writing derivatives, for example) and not enough to others whose skills are often just as hard to learn (e.g., brick laying and teaching children to read) and often more vital to society.

So we're dealing with a factual counter-intuitive, the kind of thing that drives conservatives nuts because it doesn't fit into their ideological cookie-cutter:

In 1940, the income of “lower-skilled” workers captured 88 cents of every dollar increase in state per capita income. That share began to decline in the 1970s, and by 2010 it was down to 36 cents. Put another way, working-class people in the richest regions of the country have a much lower share of the income around them than they once did. That, more than any other reason, is why they have such a hard time moving to where incomes are highest. Incomes aren’t high for them.

Yogi Berra supposedly once said, “Nobody goes to that restaurant anymore. It’s too crowded.” We might similarly observe, “Nobody moves to that state anymore. It offers too much economic opportunity.” It doesn’t make any sense, but that’s life in our present post-migration era. For all his historic foresight, Greeley could never have imagined an outcome so undemocratic and economically perverse.

You can also check out an interview with the author Timothy Noah here.

By Timothy Noah
November/December 2013 | Washington Monthly

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