Tuesday, January 12, 2010

The Settling of America.

Did you know that in 1950 nearly one-fifths of Americans moved every year? Considering the housing market of then and the market as it is now, it makes sense. Our men had been off to wars for many years and only recently had they returned to a home of seemingly endless opportunity. But when our boys returned from war, we were missing something fundamental--houses. So our boys either shacked up with the parents or moved in with friends until a house was built.

These lack of constraints provided an opportunity for men and women to go to anywhere in the country. Without responsibilities--or even home--to tie them down, they were very easily able to re-create a new life in a different part of the country.

Right now the nation's mobility rate is the lowest it's been since pre-World War II, indicating that there has been a huge change in how our culture is operating. What will the long-term implications of this new mentality mean upon society? What does this mean from an economic standpoint? Some of the leading sociologists and economics have provided their commentary on such topics, and here is a snippet of their thoughts. The full article is available here.

  • Katherine S. Newman, professor of sociology and public affairs at Princeton University, is author of “The Missing Class.”
One of the virtues of being stuck is that we can continue to rely on the friends and family nearby to help us get through hard times. “Social capital,” the stock of trust and support we draw on in daily life, is especially important when families are under stress. A child care emergency can be patched up if grandma is next door rather than 2,000 miles away. Borrowing $50 to get by is easier if you have someone close to turn to and much harder if you are a newcomer.

Crime tends to be lower in communities where people know each other well enough to intervene when they see something amiss on the street. This may help to explain why, despite very high unemployment and a great deal of social stress, we are seeing record low crime rates. Divorce often declines as well because people just cannot afford to stretch the same income over two separate households. Staying put may mean that we retain the strength of our ties to one another.

Of course if staying put means doubling up -– packing in relatives who have nowhere else to go -– frayed tempers can be combustible. Americans at the bottom of the income structure lack the reserves needed to hold tight, so they have to move in with the (only slightly more) fortunate members of their families.

During the Great Depression, my grandfather was the only person in an extended family of 13 who had a job. They piled in with one another and were fortunate they could lean on him, but nobody remembers that time as a joyous reunion of a big happy family. It was hard on everyone, just as it is hard on poorer Americans now.

  • Lawrence F. Katz is a professor of economics at Harvard University. He is the author (with Claudia Goldin) of “The Race between Education and Technology.”

Relative to those in other nations Americans have always been highly mobile and their moves in pursuit of new opportunities have enhanced U.S. economic dynamism. High rates of geographic labor mobility have allowed the United States to recover more rapidly from adverse economic shocks and to have smaller regional unemployment differences than European nations with less mobile work forces.

But American geographic mobility has declined over the last two decades and has fallen sharply in the Great Recession since 2007. Part of the decline is a natural consequence of the aging of baby boomers. In addition, geographic moves can be expected to decrease temporarily in a deep recession. Nevertheless, several factors make the decline in mobility in this recession worrisome and may contribute to an extended jobless recovery.

First, large declines in housing prices in many regions generate a lock-in effect, causing homeowners with negative equity to hesitate to sell their houses, thereby reducing mobility from distressed areas.

Second, the subprime crisis has created economic distress in typically fast-growing areas, such as Florida, California, and Nevada, further slowing the labor mobility to expanding regions that ordinarily helps drive U.S. job recoveries. Third, lingering credit market problems, especially for potential new start-ups, hinder job creation in economically vibrant locales slowing labor mobility to these areas.

Finally, greater educational attainment has been the traditional way young Americans acquire the skills demanded by growing occupations and regions. Greater federal aid to higher education may be necessary, given the budgetary problems of most states and many families, to maintain access and allow young Americans to gain the skills to move in pursuit of their American dreams.

  • William H. Frey is a demographer and a senior fellow in the Metropolitan Policy Program at the Brookings Institution.
America has long been one of the most mobile countries on the planet. There is no doubt in my mind we will return to more normal migration levels, though I don’t foresee it anytime soon. The return will be especially delayed for long-distance migration, which has plummeted so low that Florida and Nevada are now attracting fewer in-migrants than those moving out. Long distance migration has sunk to historic lows because it is facing a double whammy — downturns in the job market and a near frozen housing market.
I have always imagined myself as an adventurer hoping to experience life in cities all over the world. But if the economics are not in place for such a lifestyle, what is the alternative like?

I don't particularly think living in one area for your entire life is necessarily bad, I just feel it can be somewhat limiting. The best way to develop yourself is through exposure, and seeing the world through the eyes of someone else is significant for developing your own personal understanding of the world. That is why traveling and city planning are so important to me. I want to see the world through the eyes of the Japanese, the Russians, the Canadians...I want to see the world they see and pose it against the world I see. What are the differences? What do they value that I overlook? What do I value that has little-to-no importance to them?

To me, this is the best way to grow and develop.