Few in U.S. move for new jobs, fueling fear the economy might get stuck, too
Friday, July 30, 2010
PALM COAST, FLA. -- The recession is claiming yet another victim: Americans' near-constitutional right to pick up and move to a better job.
Labor mobility has nearly ground to a halt in the past two years, and policymakers are increasingly worried that the slowdown is not just a symptom of the nation's economic struggles but also a barrier to overcoming them.
With many people locked in homes by underwater mortgages, only 1.6 percent of Americans moved between states in a one-year period that ended in March 2009 -- a labor stagnation not seen in half a century. Though household mobility has gradually declined for more than two decades, the recent sharp downturn has caused economists to worry that it could harm the already struggling recovery.
"In the past, people tended to move to where the jobs are," said Assistant Treasury Secretary Alan B. Krueger, who oversees economic policy for the department. "Now it is necessary to have more of a strategy to move the jobs -- and create new jobs -- in areas where the people are."
The labor migration rate is down sharply since the start of the economic downturn in 2007 and is just half the rate of a decade earlier, according to William H. Frey, a Brookings Institution demographer who has analyzed Internal Revenue Service and census data.
"Overall, interstate migration has reached its lowest point since World War II," Frey said.
In Palm Coast, civil engineer James Tiffany took a job in 2006 and quickly bought a home to capitalize on the boom that transformed this once sleepy retirement community into one of the nation's fastest-growing cities.
But as boom turned to bust, Tiffany was thrown out of work, and the city became known less for its explosive growth than its alarming level of joblessness. The area's unemployment rate is 15.4 percent, the nation's 11th highest, and many of the jobs that once powered the local economy are probably gone for good.
That has left a large share of the area's jobless much like Tiffany: with skills that are no longer in demand here but saddled with mortgages that prevent them from leaving. "I'm sort of in a pickle," Tiffany said with an amused smile before resuming his job search at a computer terminal in the city's One-Stop Employment Center. "I'm stuck in a home that I can't get out of if I wanted to."
Mobility a sign of strength
Tiffany's predicament is becoming increasingly common as more jobless Americans remain out of work for ever longer periods of time, prompting concern that the nation's long-term unemployment problem could persist well into the future. Analysts have long viewed a mobile workforce as a signature strength of the American economy. The willingness of U.S. workers to move to opportunity has helped the country recover quickly from past economic shocks. It also has helped keep the unemployment rate relatively low, at least in comparison with Europe, which has much less labor mobility. Dramatic examples include the great migration of American blacks from the South to the industrial North over several decades of the past century, the later move of workers from the Rust Belt to the Sun Belt and the rush of workers to the Alaska oil pipeline in the 1970s.
Now the United States and Europe have similar unemployment rates, and economists worry that decreasing labor mobility is a growing factor in keeping the nation mired in its worst employment situation since the Great Depression. The last time U.S. unemployment rates approached double digits, in the early 1980s, most of the layoffs were temporary. But now the vast majority of the 8 million jobs lost since the start of the recession in 2007 appear permanent. Nearly half of the nation's 14.6 million jobless workers have been unemployed for longer than six months.