Where the job seekers aren’t

September 3, 2009

Even in weak employment markets, the United States has typically had a trump card to play. The nation’s workers are legendary for their willingness to travel across the country for new opportunities.

The result has been a speedier recovery of job growth than in Europe and possibly a higher productivity rate, since skilled workers are better matched to openings.

With the August employment report on Friday expected to show little improvement in the job market, America has never needed this flexibility more. Yet, at the risk of adding to the gloom, this advantage appears to be fading fast. The good news is that the United States still boasts one of the most dynamic labor markets of any rich nation. OECD rankings of its 30 wealthy member nations put the U.S. far
ahead of other large countries. (It comes second only to Denmark, which has unmatched programs to help the unemployed back to work.)

On average, around a quarter of American workers change jobs each year, compared with 15 percent in Italy and 13 percent in Greece, says Stefano Scarpetta, head of employment research at the OECD. slide1

Yet there has been a striking decline in U.S. mobility in recent years. Since 2000, the movement of Americans across state lines has halved to just 1.6 percent of the population this year — the lowest rate since records began in 1948. Even movement between counties is at historic lows.

(Click chart to enlarge in new window)

Americans may be becoming less adventurous because they are getting older. During the recession of the early 1980s the median age in the labor force was 35, according to the Bureau of Labor Statistics. Now it is 41.

In middle age, people are less willing to leave their home and yank their children out of a school district for anything less than a dream job. OECD figures show that workers above 45 are half as likely as those under 34 to change companies.

Another factor is at work — the housing meltdown. Tighter lending standards and negative equity make it much harder to relocate. The willingness of people to move for a new job halves when a family is suffering from negative equity, according to research by Joseph Gyourko and Fernando Ferreira at the University of Pennsylvania.

Those who owe more on their mortgage than the property is worth face a tough choice if they are offered a job elsewhere. Either they can sell and hand over the balance of the debt to the lender — often tens of thousands of dollars — or walk away and suffer years of higher borrowing costs.

This is a problem that is certain to grow. Negative equity currently afflicts around 26 percent of borrowers, or 14 million properties, according to Deutsche Bank. By the time the slump is over, Deutsche expects that close to half of households will suffer from negative equity. More than a quarter of borrowers could end up owing more than 125 percent of the value of their home.

Economists believe there may be other factors chipping away at the flexibility of the workforce. Rising healthcare costs have increased the risks associated with going without insurance — something than many dynamic startups can’t afford.

When a recovery gathers pace, the frustration of being tied down to depressed areas will become ever more acute. The United States may not have the onerous labor market laws seen in much of continental Europe. But the housing market collapse combined with an aging population may end up having a similar effect.

If American companies find it harder to draw on the nation’s full pool of talent or if workers can’t move where they will be most productive, the prospects for a full-blooded recovery will dim.

28 comments

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This could be a good reason for Europe to consider the mandatory use of English in the workplace. It would put us on a more even footing when competing against the US and make it easier for workers to migrate to where the work is in addition to the ease of migration thanks to the EU open border policy. It would also ease communications with nations in Asia where English is often taught, learned and spoken for business thereby making Europe even more competitive than it is now. Of course people would still be free to use their indigenous language at home.

Posted by Peter H | Report as abusive

I guess American companies will just have to pay higher wages to attract the talent they are looking for. Not!!!

Posted by Joe Bonasses | Report as abusive

Please post this chart against a chart of “real wage growth” normalized for inflation. Would be curious to see the relationship.

Posted by Joe Bonasses | Report as abusive

Of course people would still be free to use their indigenous language at home.

- Posted by Peter H
Typical comment by a “british colonialist pig”
I look forward top the day when britain is over run by muslims and the entire place become a region of dialects…not that i dislike the british or anything…

Posted by Ricardo | Report as abusive

Why not reduce the penalty for walking away from mortage that is higher than the property value? Did the holder of the loan drive up the property value by himself? If tax payer money is enabling the government to purchase toxic assets -why not enable Joe the plumber to walk away and restart the economy where he is needed? We can continue stricter lending for those that can’t afford a house AND make it less of a penalty for this specific situation.

Posted by Craig W | Report as abusive

I think that it is getting tougher to have workers move as our work force ages. It is not easy to relocate teenagers and houses are hard to sell. With the ability of professionals to work at home in the technical and financial professions the work place is changing. Most of the projects I do engineering on are located at least 3000 road miles from my home office. I make site visits when necessary, and I have people gather data, and I also attend meetings by phone. It is a changing world.

Posted by f belz | Report as abusive

A family may move to another part of the country to get extra $, but a check at the cost of living at the highest paying metros shows many times its a wash. Any job is better than no job, though, and misery with family and friends is better than crying alone.

Posted by Dave55 | Report as abusive

Corporate America has sold the people and the country out. there’s no job security and the wages are declining. pitch in with your neighbors. buy a plot of land. put some cows and some vegetables on it… move all your money to a local credit union… fix your old car… live small and local!!
screw the conglomerates!!! screw wall st!!! screw the politicians!!

most of all screw the greedy old money whose progeny feels the entitlement….

Posted by Ted | Report as abusive

It might have something to do with the lack of corporate loyalty or responsibility to the employee. I went through 5 layoffs by the time I was 30…there is no way I’m selling my house and moving across the country without some form of protection (contract, moving bonus, etc.). Employees need to have some guarantee of job stability in order for them to consider moving just for a job.

In addition, our “metro” areas have expanded (“sprawled”) so much that a normal commute might be 20-30 miles or more. Such a commute might have necessitated a relocation by an employee in the past, but now is largely tolerated.

Posted by Ed M | Report as abusive

I think another consideration especially when looking at the long term reduction in movement is the prevalance of families having two working parents. Although one spouse may be unemployed and willing to move, there is a second career in play for which that individual will not want to put their employment at risk. In this day and age a relocation would more often than not result in a need for the second earner to find work in the new location. Putting the family right back where they were before they moved.

Posted by Marco | Report as abusive

Ted has a point. The greedy executives and politicians at every level have proven themselves untrustworthy again. Those with most of the power have again shown they will do ANYTHING to keep their control & positions. Shouldn’t be any surprise but it seems pretty dumb to keep trusting and believing a known thief and liar. If we keep doing the same things we’ll keep getting the same results. I’m going to start raising more of my own food, learn to make and fix more and buy less and find ways to work together with my neighbors and not send so much to the banks, absentee owners, corporations, and investors. Think about who got the most from the few trillion extra dollars just printed. We’ll have to make our own fairness. I’m going to invest in myself and in the people around me. Who’s with me?

Posted by Laura M | Report as abusive

Moderator. How can you allow Ricardo’s post to stay on here? Peter H expressed an opinion supported by hus reasons with relevance to the article. If you don’t like his opinion state why not. A racist, beligerent rant seems inappropriate and discredits the entire website when it is allowed to stay on.

Thank You

Posted by David | Report as abusive

The data shows that from ’81 to ’05 the migration rate changed very little (less than half a percent). As a population ages slowly over time, the steep decline in a span of three years (’05-’08) would indicate that an aging population had little, if anything, to do with this drop in migration.

i agree that most people are much less willing to pick up and move for a job. the only ones doing it are the folks making the BIG bucks who have every incentive to follow the work and really have no choice if they want to keep moving up. for everyone else, the cards are on the table, the show is over, and it just isn’t worth it. younger generations are much more likely to move but to where they want to live and figure out the job secondarily.

Posted by jefe | Report as abusive

Don’t worry David, I can handle Ricardo’s response. I don’t think he got the gist of the idea of a more competitive Europe competing more efficiently, but thought I was suggesting that Europe should become a British colony (that would probably meet some resistance).

Posted by Peter H | Report as abusive

And then there is this — who in their right mind would want to move to, say, Houston or Atlanta, even if the job and pay was good? I sure wouldn’t. Not under any circumstances (okay, maybe if I was starving). If you want to know what’s wrong with the USA just spend some time in those two places. And they aren’t the only purgatorial metro areas I can think of. We Americans have a pretty good feel for what awaits us in some of these places. It’s not like the Grapes of Wrath where the Joad family naively went to California thinking there’d be fruit falling off the trees and a life of leisure under the benign western sun. I live in a small college town in Virginia, and though I’m not a native southerner and I do have serious issues with the worldview of many of the locals, I have no desire to move to a large city with all the unpleasantness that brings. I’ll put up with a few religious nutcases, but do I want to run the gauntlet in DC or some other crime-ridden hellhole? No thanks. I’ll stay put, even if I could make more money elsewhere.

Posted by Bob in VA | Report as abusive

People in apartments can move easily. 30 day notice, then stop paying rent in old location. Moving for people in homes is much more difficult. The basic fact that more people have homes now, seems more obvious to me

Posted by Nathan | Report as abusive

Thank you Laura,

I’m going to steal your words and repeat them endlessly.

We the people, must create our own fairness!!!

Posted by Ted | Report as abusive

Laura and Ted, I am learning what I can do at home for myself in preparation to move to the USA again. I am also sick of being slave to corporate masters and to the Oil Economy. Self reliance needs to be on the rise if I want my progenitors to survive the impending oil bust. That’s just me talking. But I’d rather live in a strong community and, like Bob, put up with the religious nuts than the crime riddled cities.

Posted by Kelsey | Report as abusive

The article is based on data of moves “across state lines.” We have some quite large states here, larger geographically and economically, than European countries. These include California, Texas, New York. We have states that are geographically larger than dozens of countries—Montana, Minnesota, Florida, Kansas, Nebraska, Wyoming, Maine, Pennsylvania and more. Even little New Jersey is too big/congested to commute within it from northern-most to southern-most, or farthest east to farthest west.

So I wonder if there would have been a story if the data took account of intra-state long-distance moves, say from Philadelphia to Harrisburg, Albany to Syracuse, Houston to Corpus Christi, Chicago to Springfield etc.

The question might be not whether Americans are moving as much as before, but as far. And perhaps we are moving just as much, only not as far, because, while we still uproot ourselves for jobs, we are more cognizant than previously of how far away from established networks of help/support etc. it would be pointless to go in the sense of solving one problem (income) but starting anew with others (all the rest of life, school, health-care, neighborhood ties, etc.)

Posted by Emile | Report as abusive

This might not set to well with today’s working generations but at one time those that wanted to get ahead had to move. Be it for higher or better work, mobility was the key. Not talking about the job jumper who chased-climbed the copr promotion ladder..\
These were the type that would take some risks, told the whiny teens “I have a better job, I pay bills, we move” and risked a bit. Today that is kind of vanishing…we strive less for tougher educations, tougher more demanding jobs, less real challenges.
Corp USA screwing work force is part of it, Congress screwing work force is a big part of it when they ripped up fair trade and are well paid by special interests for “favors”.. Workers screwed by Banks-Wall St and other such low life that would sell their own fmaily and their own nation out, in their unrelenting greed to get bigger fees.
Yes the “worker”, or as most now address such folks, “The consumer” as the “worker” is not really a consideration other then a nasty object that blocks even more profits.. The worker AKA consumer has been hammered and abused,.. but way down at the core, even when you discount for the way they have been abused and ripped off, it seems the :Worker” has kind of lost that little uniqueness, that USA “take a risk as it will be for the best” thing that made USA world leader! Over last 30 years of so, such a attitude has kind of vanished..The “why’s” are numerous, but the impact is sad.

Posted by Charles | Report as abusive

The price of fuel might have something to do with this. Most unemployed/underemployed live paycheque to paycheque and might only have that last $20. And then what? Travel from state to state looking for a minimum wage jobs (or a $10/hr cash job if you’re lucky)?

From a personal view, I traveled through Canada looking for work leaving job rich Ontario. Believe you me, this is no land of ‘Milk and Honey’. The good memories will always remain but traveling to look for work is always a risky proposition – the competition is just too tough with a landscape littered with Walmarts, MacDonalds and mega malls.

Drew Kreutzweiser

Posted by Drew | Report as abusive

How about health care? For me, health care is keeping me in New York. I’m semi-retired and am lucky enough to have a secure government (part-time) job that includes health insurance. I pay 20% of the premium. I can’t find this down south.

The only state I’d consider moving to is Massachusetts. Why? Because they offer some affordable health care options. There may be other states that I’ve not researched yet.

Had a friend once a few years back with a child afflicted with cerebal palsy. Terrible thing. Guy takes a promotion when the child is 2 and moves down south. Three years later same guy takes a demotion and comes back to New York. So I ask why.

“There are no services for my son down there after he turns 5.” I’m told. “I had to get back to the Northeast so that I could get Medicaid for my son.” This guy had a six figure income, but crushing medical expenses.

I never hear this discussed. I asked my friend what people do with severely handicapped kids who live down there.

He tells me that “There are no older kids with CP down there, they’re all up here.”

Posted by Barton | Report as abusive

Europe IS a British colon(-y), why do you think the World’s strongest currency is still unlinked and protected ? I don’t think Ricardo approves of patronising and condescending snobs, it just came out wrong. I would also be upset if my first language was Mandarin or Spanish or French, God forbid.

Posted by Casper Lab | Report as abusive

Your job has been relocated to either China, Mexico, Korea, India or the Philipines. The real estate market was run like a Bernie Madoff ponzi scheme wall street made billions of you and I at the expense of the poor slob standing when the music stopped. There is no recovery coming when you have skilled workers available for $1.00 a day paid no benefits no health care no environmental restrictions, dump the toxic waste in the sewer keep the production line moving. All in the name of “Outsourcing / Globalization” Jobs are leaving this country 6 million a quarter. Here’s the problem with that business model, “Who will buy the Chinese geegaw when no one has a job?” Houston we have a problem…. You cant sell anything in China unless its produced in China thats their rules and they are enforced with an iron fist. It is not a level playing field its tilted so far away from the US its a joke and the media isnt saying a word. If someone says anything bad about Chinese goods there is an apology from a political figure the next day. Even when there is poison in baby food no one does diddle. When will this end?

Posted by richard | Report as abusive

The history of the United States and Canada is a model built on mobility. And of course, the huddled masses from England, Scotland, Ireland, Germany, French, etc. and Asia came to North America. And therefore, traveling is already in their blood, so to speak. Cheap energy plays a vital role. But I’m more concerned with the proliferation of cheap ‘global’ products destroying the one part of the world economy.

Especially the ‘geegaw’.

P.S. I’m not sure what a geegaw is but I can assume its only $2.99 and replaced 40,000 G-20 workers.

Posted by Drew Kreutzweiser | Report as abusive

[...] Why is this an issue? Because selling at a loss or defaulting on loans can cost tens of thousands of dollars, and it can really hurt long term credit prospects. For many, staying put may be the only choice they have, even if they end up paying much more than their property’s loan is worth. Many can’t afford the long term pain relocation might cause, which stifles recovery. From Swann’s Reuters post: [...]

Plenty of jobs in medical billing, get your degree in medical billing and get a job in medical billing find info at http://bit.ly/ESUNX

We would move, no problem! To where? No one is hiring in South Carolina, where we moved a year ago not knowing the bottom would fall out. We have a small mortgage, so we could relocate, but jobs at my age of 53 years are not there. I applied for TSA job, and never got an appointment to take the test. I managed in communications for 30 years, yet no one seems to respect my experience. What is America coming to? I continue to apply for jobs over a year now with no prospect ahead.

Posted by John Dibenedetto | Report as abusive