The easiest way for the poor to improve their income is to move. The hardest thing for the poor to do, however, is to move.
American mobility has been the basis for strong economic growth, and it serves as the motivation for many immigrants outside America’s borders. The least likely to move and take advantage of those gains are the poorest and least educated, as Justin Fox notes in Bloomberg.
American mobility has been in decline since the 1980s, however. More educated Americans move more than their less-educated counterparts, but the educated mobility gap has declined.
“What has increased is the price of not moving. The gap in incomes between those who have moved across state lines at some point in their lives and those who haven’t has grown substantially since the 1970s,” Fox writes.
With the evolution of the American economy, that has been inevitable. As some places, such as the Rust Belt and rural areas in the Midwest, have stagnated or experienced economic decline, growing cities have had economic growth.
The cost of moving is also higher, as rental prices have been climbing for a decade, especially in productive metropolises such as San Francisco, New York City, and Washington D.C. Even if the poor want to get out, they’re struggling to save the funds to jump to growing regions.
There’s also a deeper cost that comes with moving: losing social capital, the bonds of community, and a shared culture. That might not be so dire for someone in southern Illinois to move to Chicago, where family connections can stay strong. But it’s more difficult if someone in eastern Kentucky leaves for New York City.
Those costs can be lowered by ignoring NIMBYism that prevents more housing stock and other policies that could attract people to cities, while making the transition more affordable. It’s also crucial to make the most-productive areas more accessible. Americans have lost out on a stronger economy due to prohibitive city costs.
The difficulty for policymakers, then, is to encourage mobility and economic growth, while not deserting the areas of the country in economic decline.
