If You Cannot Sell Your House, You Cannot Move
If you cannot sell your house, you cannot move to a city or town with more jobs. It is an obvious point, but an important one for explaining the sustained, high rate of unemployment. Michael Fletcher explains today in The Washington Post:
**With many people locked in homes by underwater mortgages, only 1.6 percent of Americans moved between states in a one-year period that ended in March 2009 — a labor stagnation not seen in half a century. ** Though household mobility has gradually declined for more than two decades, the recent sharp downturn has caused economists to worry that it could harm the already struggling recovery.
“In the past, people tended to move to where the jobs are,” said Assistant Treasury Secretary Alan B. Krueger, who oversees economic policy for the department. “Now it is necessary to have more of a strategy to move the jobs — and create new jobs — in areas where the people are.”
The labor migration rate is down sharply since the start of the economic downturn in 2007 and is just half the rate of a decade earlier, according to William H. Frey, a Brookings Institution demographer who has analyzed Internal Revenue Service and census data. “Overall, interstate migration has reached its lowest point since World War II,” Frey said.
This is part of the reason that, to take care of the long-term unemployment situation, the government will likely need to subsidize or create massive jobs programs in regions with the worst unemployment and housing problems — interior California, Nevada, Arizona, Michigan. Making Detroit the new home of green jobs is one example.