Beyond Immigration -- The Importance of Migration

The divisive debate over the United States' immigration policy continues unabated. The question of who we let in our borders tends to obscure another matter that deeply impacts our economy -- the significant decline in how freely people are moving around within our borders. As a recent article in the Wall Street Journal put it: "The drop in mobility is not only keeping rural residents from climbing a ladder to better livelihoods, it is choking off the labor supply for employers in areas where jobs are plentiful."

The United States has seen a number of large migrations to places where economic opportunities existed. "The Grapes of Wrath" -- a high school favorite for English teachers -- describes in stark detail how people left the Dust Bowl of Oklahoma (due to a severe drought) to seek employment in California. I witnessed the impact of mass migration growing up in Detroit. Many of my neighbors were from the South, having left an agriculture-based economy to work in the auto factories and the businesses that arose around them as the result of the corresponding prosperity.

The mobility of the U.S. population is the lowest it's been since World War II according to the Wall Street Journal. The situation is striking because many rural areas and small towns are "in an economic funk brought on by the decline of manufacturing and farm consolidation." A troubling aspect of this situation "is that while lots of struggling residents see leaving as the best way to improve their lives, a surprising share remain stuck in place." 

A number of reasons are given for the failure of people to relocate for better opportunities:

  • The cost of housing -- People in small towns don't have much equity in their homes, which are modestly priced. Moving to a larger city to find work entails a material increase in housing expenses.
  • Government assistance -- Aid programs for low income people vary from state to state and can provide a disincentive to leave.
  • Community assistance -- Family and friends provide an extended network to help people in need when times are tough. Such community support may not be available in a new place.
  • State licensing requirements -- Moving to a different state may require obtaining a new license for certain trades (e.g., barbers and cosmetologists).
  • The growing cultural divide -- People from small towns may not feel comfortable with the social climate in larger cities where jobs are more available.

The Wall Street Journal article does not mention another reason for the lack of mobility -- a skills gap. People in small towns may not be trained to handle the tasks necessary to obtain jobs in the new economy.

Greater mobility is not without costs. If the most talented young people leave small cities and rural areas, it causes a "brain drain" and further decline of these places. At the macro level, however, "the lack of mobility has been a drag on the entire U.S. economy."

Words of Wisdom

Immigration is the sincerest form of flattery. --Jack Paar