Tuesday, May 29, 2018
Studies have show that people are less likely to move to a new job than they have in the past. Economists like to think that if people would just move from high unemployment areas to low unemployment areas, everything would be fine. That ignores a lot of factors.
Of course, unemployed steel workers aren't going to move to the Northwest to write computer code. Now if there was a steel mill somewhere that was hiring, maybe they'd do that. The problem is that whole sections of the economy go down at the same time. Your job isn't being lost to someone across the country, but across oceans.
There's another factor that I don't see in any of these articles about how people should go where the jobs are. Frankly, many of those jobs don't pay enough to make it worth the move. Moving across the country is expensive. Then there's the problem that selling your house in a down market may be impossible without taking a huge loss. At one time companies were willing to pay people to move. While that still happens, it's not as often nor are the companies as generous.
So you have people who are out of work, but they are in a place where they have roots. They have an extended social network. They don't have money, but have a lot of family and friends. Being able to rely on other people is a big deal. It takes a substantial increase in pay to replace that free help with paid help. For example, a friend of mine took a cut in pay to move his family back to his hometown. He made up the loss in pay by having family willing to babysit for free. Child care is expensive.
If you've already lost your job to a changing economy, you are less likely to take a chance in a new area. Everyone knows of someone who moved to a new job only to be laid off soon after. Then they are stuck with no job, no money, and no support system. It's no wonder people are staying put these days. In spite of what the economists say, it makes sense.