More on the reduced geographic mobility of Americans

A new book from economist Tyler Cowen discusses how the geographic mobility of Americans has declined:

Nowadays, moving from one state to another has dropped 51 percent from its average in the postwar years, and that number has been decreasing for more than 30 years. Black Americans, once especially adventurous, are now especially immobile. A survey of blacks born between 1952 and 1982 found that 69 percent had remained in the same county and 82 percent stayed in the same state where they were born…

One reason people don’t move where the jobs are is because of real-estate prices — which in turn are kept at high levels by regulatory restrictions and NIMBY-ism. In New York City in the 1950s a typical apartment rented for $60 a month, or $530 today if you adjust for inflation. Two researchers found that if you reduced regulations for building new homes in places like New York and San Francisco to the median level, the resulting expanded workforce would increase US GDP by $1.7 trillion. That won’t happen, though: More homes would diminish the property values of existing homeowners.

That locked-in syndrome is a factor in economic stagnation, too: A recent Wells Fargo survey found that white-collar office productivity growth was zero. As the economy was supposedly recovering from the financial crisis, from 2009 to 2014, American median wages fell 4 percent. Men’s median incomes today are actually below 1969 levels. Had we retained our pre-1973 rates of productivity growth, the typical household would earn about $30,000 a year more than it does.

Despite all the hype attached to a few tech companies, far fewer companies are being formed than in the 1980s, and fewer Americans are working for startups. Such new companies are linked with rapid job creation. We’re coming close, Cowen says, to realizing the 1950s cliche (not really true then) of everyone clinging to a job at a handful of huge, soul-crushing companies.

As I’ve seen a number of stories about declining mobility (see earlier posts here, here, and here), I wonder if the period between the early 1900s and 1960s was simply unusual. The American economy was doing well (except for the Great Depression and the World Wars) and other factors including legal segregation in the South drove mobility. What if more limited mobility is “normal” outside of unusual time periods? Should we expect that Americans should be willing to pick up and move just because there may be a job or an opportunity elsewhere? I would guess humans default toward less geographic mobility because moves limit the ability to develop communities. In fact, it has only been in recent centuries that more of the population has even had the opportunity to travel or move large distances from where they were born. Perhaps the real question here is to find out more of what would lead people (whether in the United States or elsewhere) to move significant distances.

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