An American Enterprise
article discusses what makes Americans stay in economically declining areas instead of seeking a better life in booming areas. The author focuses on barriers to entry and barriers to exit. Among the barriers to entry are occupational licensing:
The kind of heroic work of Morris Kleiner and others has shown that more than a quarter of all workers need licenses to work. People don’t move across state lines at the same rate as you’d expect, so moves in-state are much higher than moves across state in licensed industries compared to comparable unlicensed industries. And this makes it harder to move. If you want to be a lawyer in California, it’s hard to move there. You have to take a whole new bar again. It’s costly.
We also put limits on leaving. So if you’re a public worker, that’s 13% of the US economy, moving your pension is very difficult. You’re locked in until it vests. Moving public benefits can be really difficult. So if you’re a worker in Michigan and you want to move to Texas, there’s a law that you may lose your Medicaid. And you may lose your Medicaid because it is less generous in Texas, but you also may lose your Medicaid because just the paperwork is really difficult.
The fact that we subsidize homeownership so much limits mobility because you have to sell your house and there can be lock in. There are a whole variety of other policies that have the effect of making it costly to move.
3 comments:
I've moved across state lines several times in my life, and intend to do so again soon. It's nothing like moving across national lines -- you might want to move to Iceland or Germany, but they're under no obligation to take you. Still, as the article notes, it could be easier than it is; and there are reasons to want it to be.
On the other hand, I've seen the darkside of interstate migration too. The rapid expansion of Atlanta (which by itself convinces me that interstate migration is hardly endangered) has destroyed a lot of towns and communities, submerging them under rapidly growing sprawls and suburbs. You don't have to take the position of favoring the small towns over the suburban sprawl; it's fine to say, 'Well, that's just the way it goes.' I'm not arguing for making it harder, or for regulating economic activity to favor smaller towns. Still, there's a cost that's being paid by smaller and poorer communities in terms of the destruction of their way of life, or the loss of their homes as they are priced out of the area.
Loss of your immediate support network makes it harder to move as one gets older. The network of trusted friends, tradespeople, doctors, business suppliers, etc- all have to be re-established in a new location.
I know a lot of people who could no longer afford to live where they are, if they had to supply the initial capital to buy or build- we built here many years ago before the influx of people drove the costs up. Now, the taxation to pay for a leftist gov social programs is growing every year- my thought was that in the future as an old man, I would be able to sustain by having a little garden, no debt, and doing various little odd jobs for cash- not with the tax burden imposed.
Someday I should drag out all my receipts and find out how much I have actually paid this county over the 35 years, for the privilege of living here.
I'm getting a first hand look at this after my wife and I moved from Iowa to Louisville. The loss of social capital in a move is real. I was lucky in that I transferred to an office where I was already a remote member of the team, as well as finding several groups here with shared interests. My immediate family had moved on from Iowa several years before the move, and I'm actually closer to my adult son. My wife has had a harder time since she had to find a new job, a new social network, and left family back in Iowa.
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