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When Americans aren’t willing to move

There are three kinds of economic indicators: leading, coincident and lagging. Leading indicators include measures such as stock market prices and consumer confidence. Coincident indicators include production and Gross Domestic Product. Lagging indicators, sadly, include the one measure that’s on everyone’s mind — unemployment. In an economic recovery, which we’re probably in right now, as good as the numbers may seem, just about the last decision a company makes is to offer new jobs. They don’t want to make a commitment until they are sure sales are solid. That’s all very nice from a theoretical perspective, and it’s very easy to write about. But if you’re the one looking for a job, or the spouse of someone looking for a job, or the parent or a friend of someone looking for a job, then that’s another matter. Suddenly it’s personal, and these days, many of us fall into at least one of these categories.

Historically, Americans have avoided prolonged unemployment thanks to their willingness to move. There is almost no country where labor mobility has been as great as it is in the United States. When jobs dried up in one region, people tended to be unusually willing to relocate and look for jobs elsewhere.
This occurred before World War II when African Americans, wanting to leave behind the poverty of the segregationist South, went north to look for work in such industries as automobile manufacturing and steel. The same thing happened during World War II.  Tens of thousands of Americans pulled up stakes and took war industry jobs, primarily in aerospace, in California. A more recent example was during the prolonged recession of the late 1970s and into the 1980s. Jobs were going away in traditional heavy industries. The Northern states, what many people call the “rust belt,” were losing jobs, but at the same time, job availability was growing fast in the “sun belt.” And best of all, American workers, just like they had in the past, were willing to move.
This pattern should be happening again. But it’s not. Instead, Americans tend to be staying put and making the best of the situation they’re in. Unfortunately, it’s also, at least when it comes to jobs, slowing the pace of the recovery. But there are reasons for this.
One limitation is the difficulty in selling a house. Usually, even in hard times, homes weren’t that hard to sell. However, since this recession was based on inflated home values, many people, if not underwater, at the very least will have a tough time selling their properties for anything near a reasonable price. Then there is the problem of finding a place to move to. There are jobs in cities such as Washington, D.C., New York and Los Angeles, to name a few spots that are still chugging along surprisingly well.  But, if you’re selling a house in St. Louis, at a loss, and say, moving to Washington, the economic expense may just be too much to handle.
Then there is health insurance. This is a new twist, and perhaps an argument for the president’s health initiative. It’s not an uncommon situation, in two income families, for a husband to have lost his job in what was often a high-paying, heavy industry. Of course, with the loss of employment, his family lost their health insurance. Fortunately, while he may be having a tough time finding work, his wife, and this is surprisingly common, may have a more secure job and quite possibly have access to health insurance. This is great, and has proven a lifeline for many. But it also offers a substantial disincentive for the family to move to a new location where the husband might find work.   
These factors, plus the fact that Americans, once one of the most mobile people on earth, seem to be getting comfortable with the notion of being in one place, means that fewer are likely to hit the road in order to go where the jobs are. Or, take the risk, and go where they might be. This means that any real recovery in the jobless numbers won’t happen until there is a nationwide improvement in the economic picture. It also means that pockets of substantial unemployment, in regions where the jobs just won’t come back, at least not for some time, are likely to persist well past the recovery.
You may reach David Kerr at This email address is being protected from spambots. You need JavaScript enabled to view it.

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