Housing & Mortgage
Americans Are Moving Less, and That’s Bad for the Economy
Big pay gains are available for many willing to relocate
Even before the coronavirus imprisoned us in our homes, we were becoming a less mobile country. One in 10 Americans moved between 2018 and 2019, barely more than half the mobility rate in the mid-1980s.
For those of us who have moved too many times over the years, staying put seems like a good thing for all concerned. It isn’t. Americans’ traditional willingness to pack up and move for a better job elsewhere was a big plus for the economy, and something that separated us from more static labor markets in Europe, spurring faster growth here.
While most short moves are spurred by housing or family reasons, half of long-distance moves are for jobs, according to a new research brief from Harvard’s Joint Center for Housing Studies. In 1990, 3.3% of Americans made interstate moves each year; today, that number is around 1.5%, and that is worrisome.
“Economists say that high migration rates allow labor markets to have flexibility and adaptability, and that low migration rates can lead to stagnation and income divergence between places,” writes Riordan Frost, the author of the Harvard research brief.
Some believe that declining mobility contributes to growing income inequality. In his 2012 book “The New Geography of Jobs” economist Enrico Moretti wrote that the U.S. was segregating, with highly educated workers in high-income, high-cost areas, and less-educated workers in low-income, low-cost areas.
It wasn’t always so. America was a country built by people willing to move. In 1948, the country’s mobility rate, or number of Americans who moved each year, was 20.2%, according to the Harvard research brief. As recent as the mid-1980s, it hovered around 18%.
It’s been declining since. From 2018 to 2019, the most recent data available, the mobility rate was 10%.
Why, say, aren’t more registered nurses relocating? Average pay for registered nurses, according to federal data compiled by Nurse.org, ranges from a low of $59,540 in South Dakota to $113,240 in California. Housing prices and other factors have people staying put, but at a tremendous cost. Teacher pay also varies widely.
Many factors have made us less willing to move. People tend to move less as they age, and America is becoming an older country. The youngest baby boomers are now in their late 50s, while the oldest ones are in their 70s.
The growth in two-income families is another biggie. Even if one spouse is offered a great job in a faraway state, it may not make sense to take it if the other spouse has to give up their job.
I can attest to this first-hand. From 1983 to 2008, I moved all over the country multiple times to land better journalism jobs. It was possible because my wife wasn’t working during most of that time and either attended college or stayed home to raise our three children.
I know older journalists who started their careers back in the 1970s and moved even more. It was what you did to get ahead. It’s a price many two-income families don’t want to pay these days, and I don’t blame them. Even now I cringe every time I see a moving van.
The soaring cost of housing in some parts of the country also impedes moves. California and the Northeast have particular trouble attracting migrants from other areas. This can create labor shortages, particularly for lower- and middle-income jobs. Some California towns fret that teachers and police officers can no longer afford to live nearby. That’s not good.
Meanwhile, lower-cost states like Florida and Texas have profited by attracting immigrants from other states. If that in-flow slows, as some economists are predicting, it will hurt their economies.
What effect the coronavirus-induced recession will have on mobility is unclear. Home prices are holding up so far, but there is early evidence that fewer homes are being sold, which could depress mobility. There’s a dramatic increase in people working from home under the state quarantines, and if some of that shift becomes permanent, it could hurt the number of job-related moves, according to the Harvard research brief.
On the other hand, the Harvard brief says there could be a “spike in mobility” after the quarantine ends and unemployed Americans look for cheaper housing. And it warns ominously: “There may also be a substantial increase in evictions and foreclosures after temporary bans end, unless payment assistance is provided on a large scale.”