Historically, migration and “voting with your feet” have been a tremendous boon to the poor and oppressed of the world. It has enabled them to find better employment and housing, increase their welfare in numerous ways, and escape oppressive and incompetent governments.
I. Declining Mobility for the Poor
But, as Yale Law School Professor David Schleicher explains in an important new article, in recent years geographic mobility for the poor has declined:
A decline in labor mobility—and, in particular, limits on the capacity of workers to move to hot labor markets and away from dying ones—has played a substantial role in the slow GDP growth we have seen since the 1970s. Getting America on the move again is crucial to realizing the benefits of the technological progress we have made and to increasing incomes for ordinary workers.
When there are new inventions or investments, people need to move around to get the most out of them. People need to move to the regions that have become successful with the rise of certain sectors of the economy (think Silicon Valley); and people need to leave places that no longer support as much economic activity as they once did…
But over the last 40 years, we have gotten increasingly worse at allowing and encouraging people to move to the places where they will do their best economically. Economists from the Federal Reserve and elsewhere have concluded that labor mobility has declined substantially since the 1970s. Even researchers like Scott Winship, who have found little or no change in overall mobility rates, agree that there has been a decline in mobility among poorer and less well educated citizens.
Even more pressing than general declines in mobility are specific declines in rich and poor cities. People are not leaving places that have suffered economic hits, and are not moving to places that are booming.
II. Where Right and Left can Find Common Ground.
Schleicher identifies three major causes of the problem: restrictive zoning, occupational licensing, and various welfare benefits and subsidies that are not portable across state lines, and therefore disincentivize moves. Restrictive zoning massively drives up housing costs in many cities, and prevent new construction in response to demand. As a result, poor and lower-middle class workers often get shut out of “hot” job markets that have many of the best employment opportunities.
There is an increasing cross-ideological consensus among experts in the field that this is a serious problem. Schleicher is one of several leading left of center analysts who have begun to join free market advocates in calling for less restrictive zoning rules. Others include Paul Krugman, Matthew Yglesias, and Jason Furman, chair of President Obama’s Council of Economic Advisers.
There is also growing cross-ideological recognition that occupational licensing has gone way too far, protecting incumbents against competition, closing off job opportunities for the poor, and harming consumers. Whatever can be said of licensing for doctors or lawyers (despite being a law professor, I am very skeptical of the rules for the latter), it is absurd that almost 30 percent of American workers have to get state-mandated licenses to do their jobs, including such highly technical professions as florists, interior decorators, African hair-braiders, and tour guides. As Schleicher notes, anti-competitive licensing laws impede labor mobility because many states impose onerous licensing requirements even on new entrants who have previously practiced the same profession in another state. Such restrictions harm a wide range of workers, but are particularly damaging to the poor, who are less likely to have the resources needed to secure credentials that require a great deal of time and money to acquire.
Cutting back on zoning and licensing laws are essential reforms that have been championed by scholars and policy analysts across the political spectrum. Sadly, however, most of the general public remains largely unaware of these issues, or of the ways in which they impede mobility, decrease economic growth, and disproportionately harm the poor. They have gone almost completely unmentioned in recent political campaigns, including the current presidential election. One reason for this neglect is that the connections between policy and outcome here are somewhat complex and counterintuitive, and therefore difficult to explain to rationally ignorant voters who pay little attention to the details of policy, and may not know even very basic economics. This is one of many examples of how widespread political ignorance is an obstacle to eliminating harmful government policy.
Hopefully, Schleicher’s important work will help increase awareness of these issues. They are areas where right and left should be able to find important common ground – as Schleicher and I have done despite deep disagreements on many other issues.
The problem of nonportable government benefits is in some ways an even tougher nut to crack. Unlike in the case of zoning and occupational licensing, here there is much less in the way of cross-ideological agreement among experts. Still, these benefits would be less of a deterrent to mobility if zoning and licensing did not stand in the way of pursuing job opportunities as much as they currently do. More and better job opportunities would increase the likelihood that poor people will move to seize them, even if they have to give up some welfare benefits in order to do so. In addition, expanded opportunity may make it politically easier to cut the benefits in the first place.
An alternative solution might be to centralize government benefits for the poor, taking them out of the hands of the states (perhaps in exchange for getting the federal government out of the business of controlling and regulating some other policy areas). But such centralization (with or without offsetting decentralization) has potential flaws of its own, and may be extremely hard to enact and implement in a deeply polarized era.
The overall situation may not be quite as bad as Schleicher and other critics suggest. One oft-ignored reason why poor Americans are less likely to move today than in past eras is because they are far less desperate. With rare exceptions, they simply don’t face as high a degree of privation as their counterparts of decades ago. That, of course, is a good thing.
Moreover, large numbers of people are still “voting with their feet” in favor of jurisdictions with lower housing costs, less taxation, and greater job opportunities. In my recent book on foot voting and political ignorance, I cite census data indicating that they very poorest households (those with incomes under $5000) are still twice as likely to make interstate moves as the national average. Nonetheless, it is surely true that mobility has become more difficult in some crucial respects. We must do more to clear away the obstacles. If we want to make America greater, we should enable more Americans to get moving again.