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. 
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.
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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 DibenedettoPlenty 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
- Posted by shawnkempf[...] 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: [...]
- Posted by Negative Equity and Age Affecting Job Relocation | career-line.comThe 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 KreutzweiserYour 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 richardEurope 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 LabHow 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 BartonThe 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 DrewThis 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..\
- Posted by CharlesThese 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.