Page 2 of 2   <      

Few in U.S. move for new jobs, fueling fear the economy might get stuck, too

James Tiffany sits with his son Andrew, 2, and his mother, Pat, at her home in Edgewater, Fla. Tiffany, of Palm Coast, is unemployed. He'd take a financial hit if he sold his home to move elsewhere for work.
James Tiffany sits with his son Andrew, 2, and his mother, Pat, at her home in Edgewater, Fla. Tiffany, of Palm Coast, is unemployed. He'd take a financial hit if he sold his home to move elsewhere for work. (Kelly Jordan For The Washington Post)
  Enlarge Photo    

Many economists believe that a significant number of workers will have to move before the employment picture substantially improves.

But workers have proved unwilling -- or unable -- to relocate. The biggest factor seems to be the large number of unemployed homeowners who have little or no home equity. Between 2006 and 2009, the number of renters who moved out of state decreased by 13.6 percent, according to census statistics, while interstate migration among homeowners has plummeted by 25.5 percent.

That problem is compounded by the sheer scope of the unemployment problem, which has left few areas in the country untouched. Many Sun Belt cities, long magnets for job seekers from economically depressed areas, have joined long-suffering Rust Belt areas as places with the highest unemployment rates. The Las Vegas metropolitan area has a 14.5 percent unemployment rate, higher than the rate in Flint, Mich. In Riverside, Calif., the jobless rate is 14.4 percent, higher than the rate in the Detroit area. And in Charlotte, unemployment is 10.9 percent, the same as Lima, Ohio.

"There are not a lot of opportunities to move. That is a huge factor in terms of less mobility," said Fernando Ferreira, a professor at the University of Pennsylvania's Wharton School who has written about the effect of the housing meltdown on mobility. "And the lack of mobility definitely hurts the efficiency of the labor market."

Mortgages limit options

Only a few regions in the country have not experienced large spikes in joblessness during the recession. Among them are the Dakotas, Iowa and parts of Texas, where there was no housing bubble to burst.

Until recently, the economy in Palm Coast was built largely on breakneck housing growth, which helped double the population to about 100,000 over the past decade and drew people such as the 32-year-old Tiffany to town. He and his wife, a physical therapist, moved here from New Smyrna Beach, Fla., about 50 miles away.

When Tiffany arrived, the company he worked for had a backlog of jobs that made his civil engineering degree seem like a passport to lifetime employment. His days were filled designing drainage ponds and utility systems for the developments that were sprouting all over the city, which is the hub of Flagler County. Now the company has shed all but a handful of its workers, leaving just a skeleton staff and leaving Tiffany in a desperate search for a job.

"I'm looking around," he said, adding that few places are even accepting applications. "But I can't even give a résumé away."

And Tiffany can't move, because of the big financial hit that would involve. He purchased his house for $230,000. Now, he says, he could probably sell it for $175,000. "If I sold my home, I would be out more than $50,000," Tiffany said. "I can't do that."

The slowdown caught local officials by surprise. The huge county courthouse in Palm Coast is largely vacant. Next door, the new county office building was also built for growth that suddenly ended, and the school system occupies much of the extra space.

Meanwhile, leaders are thinking hard about how best to revive the economy, something that was not necessary for a long time as the city's miles of hiking trails and easy access to the beach seemed to sell itself. "We have to identify assets, and that will help us brand ourselves as unique," said County Commission member Milissa Holland.

When magazine marketing and fulfillment company Palm Coast Data threatened to leave two years ago, Palm Coast officials vacated their city hall and leased it to the company to keep its more than 1,000 jobs in town. The city is expanding its open-access fiber-optic network to help lure business. Palm Coast also recently landed Galtronics Telemetry, an Israel-based maker of advanced antennas that has a design and marketing center in Palm Coast.

Officials are proud of those moves, but they know the new jobs are unlikely to be a good match for the construction workers, real estate agents and mortgage brokers who make up the largest share of Palm Coast's unemployed.

"You can bring in all the electronics jobs you want," said Mayor Jon Netts. "But the guy who is skilled as a framer, or a roofer or drywall installer, that is not going to help him. "

<       2

© 2010 The Washington Post Company