It’s telling when a mainstream outlets like the Wall Street Journal is alert enough to notice an impediment to groaf, yet seems unable to follow its evidence to the logical conclusion. The whinge of the day is how American mobility has fallen. In this story, that means physical mobility, as in moving to a new residence, as opposed to far more important income mobility, Keep in mind that for nearly a generation, there has been none in the bottom 40%. If you are born into a poor or near-poor family, the odds of being able to move up the food chain are very small.
The focus on physical mobility means the Journal is conflating two sets of issues. One is households simply wanting to trade up or down: families with kids wanting a bigger dwelling, oldsters seeking smaller digs, as well as needing to seeking to lower housing costs due to job loss, divorce, or disability. The second is that people are less willing to move (by implication, out of area) for career reasons. The paper decries that the latter will hurt American vibrancy. But look how it combines completely separate issues:
Americans are stuck in place.
People are moving to new homes and new cities at around the lowest rate on record. Companies have fewer roles for entry-level workers trying to launch their lives. Workers who do have jobs are hanging on to them. Economists worry the phenomenon is putting some of the country’s trademark dynamism at risk.
Help me. A dearth of starter jobs and employees fearful of job loss is a sign of a faltering economy. The lack of “dynamism” is an effect, not a cause. One can argue that this is simply the logical outcome of the war against labor. We highlighted a recent Journal story in which CEOs were celebrating continued headcount reduction. It was now a point of pride, as opposed to a probable sign of operational or market problems.
We see more category errors later in the article:
For generations, Americans have chased opportunity by moving from city to city, state to state. U.S. companies were often quicker to hire—and to fire—than employers in other parts of the world. But that defining mobility has stalled, leaving many people in homes that are too small, in jobs they don’t love or in their parents’ basements looking for work.
First, this is of questionable accuracy. Job tenures were much longer when I was young. I recall that a partner who joined McKinsey in the 1970s from industry said the firm looked at him a bit askance because he had changed companies after 10 years. I have not checked recently, but before Covid, average job tenures were barely over 4 years. It was companies that were moving people about back in the old days, and not employee wanderlust that was driving out-of-city relocations back then.
Second, being “stuck” as the prototypical growing family with not enough house has nada to do with moving from city.
Third, being unable to move out of one’s parents house is proof of a basic failure of our economy as presently organized, to deliver adequate paying work to those who want to work.
So aside from a weak job market, we have the “AI is coming for you” raft of stories leading job incumbents to hang on for dear life, and employers in certain once-important-to-new-grads fields sharply cutting back on hiring, again presumed due to AI. However, as yours truly has pointed out for over 15 years, Slashdot would every six months or so, feature a piece from a community member lamenting his inability to land an entry-level position and seeking advice from greybeards. They generally could offer only solace, not leads.
The Journal does, remarkably, point out that pay is often too low compared to local living costs. Are these new hires expected to continue to live with their parents? From the article:
Josue Leon, who recently graduated from the University of Pennsylvania with an engineering degree, applied for over 200 jobs since April, piling up credit-card debt and living in his girlfriend’s family’s home. In many cases, he didn’t even get a reply.
“It’s been a nightmare,” he said.
But when the Fort Worth, Texas, resident finally got a job offer, he turned it down: The job would have required a move to Massachusetts, the company didn’t offer relocation assistance and the five-figure salary wouldn’t stretch far.
“Moving to Massachusetts with almost no money is very difficult,” Leon said. Eventually he landed a job as a magnet technology engineer in Fort Worth, keeping him close to home.
How can an economy be depicted in a healthy state when it won’t pay an approximation of a living wage to a college grad with a supposedly prized STEM degree from a good school?
The article later makes a point oft stated right after the crisis, that your pay right out of college tends to set your career income trajectory. Those who start out lower than you “ought” to, nearly all wind up at permanently lower pay levels than recent norms. After the crisis, when unemployment among new grads was well over that of high-schoolers and many were taking jobs at well below their skill and credential levels. Even if they got back on a professional career track, the initial years at lower compensation set them back in terms of lifetime earnings. As the story notes:
Recent college graduates who are underemployed are more than three times as likely to be underemployed a decade later than those who quickly secure a good job, a recent study by the Burning Glass Institute found.
The article does not follow up on Leon’s unhappiness over the lack of mobility assistance. When I got my job at Goldman, they paid for my flight from Boston, where I had gone to school, to New York City, as well as reimbursed my (modest) moving costs. I have no idea if this practice has fallen by the wayside. But more generally, moving bennies were far more common in the days when IBM meant “I’ve been moved” and corporate America was fond of relocating mid and top level execs. My father even had a loss on house sale reimbursed when he was transferred after only 18 months, although it took a lot of kvetching to prevail.
The willingness to uproot for career opportunities has fallen, although the biggest driver is the rise in two-career families. And the data the Journal presents actually does not much support the contention that workers are not willing to move for career reasons. Look how flattish the lines at the bottom of the chart are, for moving out of county or state. A move within a county is vanishingly unlikely to be for work reasons:
Admittedly the Journal does provide some evidence of a big shift….before the time period above:
In the 1950s and ’60s, some 20% of Americans would typically move each year.
The share of people moving has steadily slowed since then, in part because the U.S. population has aged, and older people tend to move less. More Americans also live in households with two earners, which makes uprooting more challenging.
By 2019, the year before the Covid pandemic, 9.8% of Americans moved.
Journal readers regarded the impediments to moving for job reasons as obvious. From the commments:
A Jogaleka
This is not a new phenomenon. American mobility has been decreasing for at least a generation. In a nutshell, America has simply become unaffordable. Inflation, house prices, groceries, education, everything has skyrocketed while wages have stagnated, so what do we expect?
But let’s go back to the unstated assumption: that moving is good. Having attended nine schools before I graduated from high school, I disagree vehemently. It did not occur to me until my late 20s that I might have relationships that would endure over time. My parents had virtually no friends during these frequent moves.
And it’s not just a matter of friendships. Living near relatives often provides a practical and financial support network. One reason mothers are now so dependent on child care is not many live near grandparents or aunts/uncles who can assume some of the child care duties.
On top of that, buying and selling houses chews up a high percentage of your equity. If you assume 25% equity, between brokerage fees, points, closing costs and even modest fix up, you are easily at 7% of the sale price. There’s a reason, as Matt Stoller pointed out, that the old model of housing as forced savings presupposed stability, as in a laborer or professional in the same house during his employed years, gradually building up equity as he paid down a 30 year mortgage.
To put this more bluntly, the lack of employer attachment to workers, and vice versa, employees understandably feeling no loyalty, is packaged as a weird virtue of mobility. If you’ve ever been a boss, you know that turnover is disruptive and it cost money (identifying and vetting candidates, sometimes paying search fees, training and/or “newbie is less productive” costs).
But the Journal would have you believe lower job turnover is a bad thing:
“Switching employers” is so anodyne, as if this pattern was the result of employee opportunism, when the description of the data suggests that it includes hard and soft firings too (like not giving bonuses or corporate acquisitions that mean high odds of employees of the purchased company being turfed out).
Aside from the increasingly hostile pay and perks environment for workers, the Journal also pussy-foots around the fact that housing is increasingly unaffordable, which is a barrier to trading up and even trading down. The article does mention that, but comparatively late, and it comes off as an afterthought:
For much of the 2010s, a median-income family who bought a median-priced home spent 30% or less of their earnings on housing costs, according to brokerage Redfin. That share is now 39%. Last year, home sales fell to the lowest level in almost 30 years.
So we have a world where most married couples have both partners working, housing and other expenses mean most workers are barely getting by, employers merrily squeeze worker pay and now have the threat of AI to hold over their heads….yet this article has a complete lack of agency, as if these conditions just dropped of the sky, as opposed to are the result of more and more capitalist extraction.
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Came across a tweet today along these lines-
‘ExposeIT⚡️
@RealWaKhan
Aug 13
So basically, the plan was to strip Americans of good jobs, hoard rental properties, and then jack up rent and home prices until ordinary people couldn’t afford to live?!’
https://xcancel.com/RealWaKhan/status/1955640589787320765#m
I sometimes wonder if you had an industry like the education industry work out the average pay & loan abilities of their “customers” and jacked up their costs to the very margin of what they could afford. Only problem is that every industry is doing the same such as the car industry, food industry, rental industry, etc. so they were all using that same idea for that very small pay-packet. Far too many buckets for a very shallow well.
Far too many buckets for a very shallow well.
America isn’t a country. It’s a business — a plantation, to be specific.
So … the plan was to strip Americans of good jobs, hoard rental properties, and then jack up rent and home prices until ordinary people couldn’t afford to live?!’
The plan was in effect exactly that. Recall, after all, that 80 percent of US bank lending is RE mortgage lending, and thus the collateral represented by those jacked-up RE values is the basis of the US’s self-image as ‘the wealthiest nation in the history of the world.’
In other words, it’s all one big lie. In reality, on occasions when I return to the US, I’m struck by how it seems to have the largest population of poor people — once I get outside enclaves like Palo Alto — of any developed nation, and overall the unhappiest.
I sometimes wonder if you had an industry like the education industry work out the average pay & loan abilities of their “customers” and jacked up their costs to the very margin of what they could afford. Only problem is that every industry is doing the same such as the car industry, food industry, rental industry, etc. so they were all using that same idea
Again, that’s been exactly what happened. And now Trump’s tariffs and the Big, Beautiful Bill — in combination, essentially a strategy to slash taxes on the US rich by substituting the income that a tax on imported goods will bring in, which will in fact be a tax that ordinary Americans will be paying as the costs of those goods increase — will further exacerbate matters.
Well, what can’t go on indefinitely, won’t go on.
It’s because every industry is a cartel! The 3-4 main companies in each should be broken up and all the laws they have written to maintain control of their industries in the last 30 years repealed. Otherwise…it’s over for the US economy. And a police state won’t change that!
The cost of housing is now defined by corporate ownership and rental rates are not based on what a family can afford. Single family housing ownership by non occupants needs to be regulated. Biggest mistake of 2008 was to encourage these wide scale purchases by companies and it has severely distorted the housing market and the entire economy is held way back because of it.
I see jobs that are a good fit for me in various cities and then I look at cost of housing in these areas and am just floored by how bad it is. Tons of qualified workers encounter this same thing. There is no way that having only a local pool of applicants is good for a company.
It’s only going to get worse with “surveillance pricing”, or the ability of every extractive and oligarchic firm to extract the precise and maximum willingness to pay of each and every consumer, erm pawn, ad nauseum.
Excellent review of this case of purposeful blindness to the on-the-ground economic reality. I think that a lot of working-middle class Americans are so caught up in just surviving that they don’t see how this is playing out, they’re just applying for jobs, surfing the shelter sites in despair, and wondering how to avoid P&M’s basement or much, much worse. When you’re young, the world looks like it’s always been this way, and to be told by oldsters that back in the day, you could get a good starter job by literally knocking on doors in person, seems like a joke.
btw, I think you meant Matt Stoller, not Mott, unless he’s gone Hoople on us :)
I can’t see my own typos. I think I need stronger glasses. Thanks.
My wife is a grade school teacher – each time we have had a child (2nd was born a few weeks ago!) she has had to pause her career and stay at home for a bit, all due to cost of childcare.
The cost of full time care for 2 children would basically eat her entire paycheck so we sit and say “do we pay someone else to raise our children/for you to go to work when there is no net gain to the household.”
We also were lucky enough to buy our home in 2019 before everyone went super sideways but now we are kind of stuck in it because we wouldn’t be able to afford something larger/better fit for the same mortgage payment.
Oh not to mention Trump deciding that the Student Loan payment plans that were working for our family are bad (probably just because Biden did it) and now we are staring into an uncertainty of how much that payment is going to skyrocket within the next year…
It’s rough out there
On the topic of children and the expensive daycare options, I still recall a young mother of two telling me this factoid about the costs of daycare for those two children. The daycare was more expensive than her mortgage, and my best recall that her husband worked as well ( maybe in sales or a trade, I really don’t know ). But I think she was the major breadwinner.
And that was early 2019, as many people in the accounting and finance departments where we worked were finding greener pastures elsewhere. It has to be a very difficult choice to make, after all do you really want the lower cost, “cut rate” daycare? I’m not a parent, FWIW.
Yes. You want the lower cost, cut rate daycare, for several reasons, at least where I live (southern small city of 15000, >1/3 below poverty line):
– It’s closer. You can bike there instead of driving a half-hour away.
– It costs less. You can spend more time with your kid, and less time working if you’re a nurse with flexible hours.
– The foster kids go there, so it’s more closely regulated. All daycares hire from the same pool, but when the teachers at the lower cost daycare yell at the kids during naptime, they get fired and it makes the news. The reputational cost would wreck fancy daycare, which further decreases transparency and oversight.
– It’s a school for democracy, not a school for the elite. It produces kids who aren’t stuck up.
– The fancy daycares all overpromise and underdeliver, and they foster “predatory precarity” in parents.
– Overly structured activity is not play, and kids need to play. They get more time outside on the playground than even the forest school often does, because gently supervising a big group of preschoolers doing unstructured play is a lot easier outside.
– They’re more flexible, there’s no waiting list, they appreciate a kid who isn’t much touble and aren’t surprised by a kid who is.
Above are highly valid points made. But my overall thought along these lines was more akin to how states manage or oversee daycare facilities. I took a quick check at my home state of North Carolina and their division apparently visits every facility within the state once per year, at a minimum. Granted my research pulled a nugget of news from 2017 regarding a daycare provider in Charlotte cited on repeat violations.
Community organizations or even church affiliated run daycare centers might provide reasonable options,I’ll grant. I just have questions about this hiring pool that you reference. I don’t think schools like the Montessori brand are widely known for being cheap but I suspect their standards are high so will their monthly charge for it. To repeat what I said earlier I’m not a parent.
Antifaxer: …now we are kind of stuck in it because we wouldn’t be able to afford something larger/better fit for the same mortgage payment.
How are home insurance payments looking where you are? Average homeowners’ US insurance premiums rose over 30% between 2020 and 2023, with some states like Florida and California seeing insurers pull out entirely.
Experts warn of ‘cycle of doom’ as disasters overwhelm last-resort insurance:
States including Florida, Louisiana and California have seen dramatic FAIR plan growth
https://www.housingwire.com/articles/experts-warn-of-cycle-of-doom-as-disasters-overwhelm-last-resort-insurance/
https://www.dallasfed.org/research/papers/2025/wp2505
https://www.brookings.edu/articles/how-is-climate-change-impacting-home-insurance-markets/
In other words —
[1] Decreased valuations: Homes in high-risk areas are losing value, which worsens loan-to-value ratios and makes mortgage terms less favorable—or plain impossible.
[2] Credit stress rises and is spread systemically: A recent study of 6.7 million U.S. borrowers found that rising premiums increase mortgage delinquency and prepayment rates, especially among those with high debt-to-income ratios.
[3] In the ultimate scenario, real estate values collapse, banks lose collateral.
Our homeowner’s insurance has increased almost 100% over the last five years. In 36 years we have made one claim, roof damage due to a hailstorm in 2006. We do not live on the coast and if we have flood damage at the top of a hill about 200 feet above the local river, insurance will not matter. The two insurance companies are way ahead of the game with us, and I expect this is true with the vast majority of their policy holders.
If you don’t mind me asking, what is the cost of home insurance in the US typically?
Wife’s nephew is 15 years out from a computer engineering degree and is a senior techie at a very large, non Mag7 sweatshop. His local rustbelt office was shutdown pre COVID and has been WFH for years. In mid July he was told to report to an office in MA, VA, CA, CO or Austin by September 2. No relocation assistance, no temporary housing, no sales assistance on his existing home. There are major layoffs and anyone not moving gets the axe.
He’s been a saver, but one has to wonder what are the prospects of being 38 and able to continue in that field for another 20+ years? He’s smart enough that he’s not going to buy a house at the new location. His partner is a veterinarian tech, so she’ll always have a job most anywhere. Nephew not so sure…
We were fortunate to ride the data science wave from the late 80s to retirement, scratch building in SAS for a narrow niche for our small mom-and-pop shop. It simply couldn’t happen today. Guys a bit younger are doing OK, but AI is used extensively now in preliminary coding. It’s only a matter of time before they anticipate being let go.
Presumably the neoliberals figure “I’ll be gone, you’ll be gone” and tough luck for those who can’t be gone. Was there ever a genuine plan to “voodoo economics”?
Plus as described in yesterday’s excellent Galbraith, entropy is always just around the corner no matter what we do. Perhaps national ideas are also organisms that wear out or at least evolve. The great age of our current business and politcal class tends to validate this idea of “wearing out.”
Was there ever a plan? Yes there was. I’m from Ohio and that’s where I heard the best explanation of that plan. Written in an email between First Energy executives and the best Ohio politicians and regulators First Energy’s money could buy, celebrating their $6 billion legislative ripoff of Ohio rate payers, which to this day still has not been fixed — “F**k anybody who ain’t us.” Came with a picture too — one of the slime bags photo-shopped the faces of 4 of the slime bags onto a picture of Mount Rushmore.
The younger generations are going to lash out politically now that the ladder has been brought up on them. The Reactionary right has courted them, but is currently failing to deliver for them. And since the left is totally squashed by the center right party, TINA is the only thing they get. It is a beautiful system until people figure out they are being played.
But seeing as how we have been locked into a “stable” time period of neoliberalism for the past 40+ years, won’t current and later generations regard “neoliberalism” the same way that fish perceive water? I am an early “Millennial” and people like us have never known a time when neoliberalism didn’t control the economy as well as both parties. We have only heard of the “New Deal” era from our parents and grandparents.
Neoliberalism isn’t going away anytime soon, and even if it was on its way out, our country (the US) along with much of neoliberal Europe will have long finished degrading into post-empire kleptostates before neoliberal ideology was done with us.
I think that future generations will just accept neoliberalism as the way that things are and have always been, as the Silent and Boomer generations die off, leaving nobody alive who still remembers what the pre-neoliberal era was like. You might get some thrashing around by some people or failed and short-lived “insurrections” here and there, but I think most people will shrug their shoulders and carry on as best they can never having any notion that things could be different having lived under neoliberal ideologues for generations at that point, and the “New Deal” era will come to be regarded as some sort of modern folktale, which it might well be already be for my generation.
Mobility is a function of wealth. Many urban centers have a lot of poverty, but it’s not because most of those poor people moved into those neighborhoods. The concentration of urban poverty has mostly been a function of wealthier people moving out of those neighborhoods. The poor are who is left behind because they couldn’t afford to move out.
While it is rarely discussed, you will find the same situation in remote rural communities where they have lost population over the past couple decades. Those with jobs and money moved away and those who couldn’t afford to move stayed or more correctly got left behind.
Where I live in Scotland there are a lot of old mining villages. They tend to have fallen into one of two fates. They’ve either become desirable commuting/retirment villages which look very pretty and have expensive houses. Or they have become compelte slums with higher crime rates than the big cities and it’s a struggle to give away houses in them.
Last time they counted (2021) there was 60,000 empty living units in San Francisco. We probably have more now. It would be cruel to kick the zombies out of the zombie buildings south of Market street. I’m sure the situation is similar in other US cities. I really can’t think of a solution.
Over 60,000 empty units and coming up to 20,000 homeless and if the pattern holds up in San Francisco at least 40% of them are employed.
California and San Francisco are supposed to be wealthy places but they ain’t healthy places.
“When I got my job at Goldman, they paid for my flight from Boston, where I had gone to school, to New York City, as well as reimbursed my (modest) moving costs. I have no idea if this practice has fallen by the wayside.”
I realize it’s out of date but if it helps – my first job with my bachelors 15 years ago at MAG7 had a generous relocation package across country which included moving my then modest belongings and car and a two month lease in a beautiful apartment to get situated.
Friends still in the industry at MAG7 have experienced similar offerings, though the latest anecdata was all from pre-2022.
It does help a lot. This is a more recent data point demonstrating this practice was still in place more recently than the stone ages of my youth.
The biotech I worked for paid my relocation from London to Bothell, WA in 2002. This was a discretionary transfer I had requested so I could get married. They paid ALL expenses, including for my H-1B (which included a waiver due to a petty criminal record from my younger days).
Today, though, I learned of a new screw they’re putting on folks at Amazon. People at the VP and Director level are not allocated a headcount; they’re allocated a budget and get to spend it how they wish. So, buy crappy devs in India, or better ones in EU? Your choice. Want to promote someone? That’s one less junior person on your team, if the promo comes with a big increase in comp.
Intel gave me a generous moving allocation to the Portland area in Feb 2020 for a Manufacturing Tech position.
This is a good Norton/Hudson discussion of Wall Streets role in the housing problem.
https://geopoliticaleconomy.com/2025/08/10/corporate-landlords-rent-michael-hudson/
Great article, it brought out two things for me – economic dynamism and intensive growth. How exactly does one measure dynamism and how does a country get famous for it? Is it economic growth? I don’t see how, since the US economy has been experiencing slower and slower economic growth over the past 70 years; going from average real GDP growth of over 4% to 2.3% since 2000. Real wages? Not for the majority of Americans, since they have been largely stagnant. What seems to fit from my observations are corporate profits and share prices that keep growing. When they are growing faster than the economy it also means growing inequality.
Way back when in an economics lecture, I was introduced to a concept of extensive vs intensive growth. The story is that corporations are profit maximizers and they use these forms of growth to accomplish it. Extensive growth means an increase in the number of factories or business locations. It means capital investment, more employment and results in GDP growth. Intensive growth means increasing profits within the same or lower number of facilities. This could range from automation in a facility, to consolidating branch plants, running extra shifts instead of building a factory, offshoring production, paying wage increases that are less than cost of living, reducing benefits and saving on employee moves. It’s really anything that can make more profit from a given level of revenue. Since revenue doesn’t really change compared to extensive growth because it lacks the construction and employment effect, growth is slower and profits are higher. The end of the story was that companies use both kinds of growth, but sometimes one is more prevalent than the other. I don’t see how an economy with companies that focus on intensive growth leads to what we think of as being economically dynamic.
The prevalence of stock buybacks could indicate that many companies are not pursuing “extensive growth” as they are not reinvesting the funds in their companies.
One can wonder what is the job market view of employees of The Wall Street Journal.
Are WSJ employees seeing limited mobility, few new entry level jobs, low starting pay, limited relocation allotments and short job tenure/layoffs?
But having the Journal do an internal investigation of itself is another matter.
Absolutely, I also see buybacks as a scam where senior management is using it more to increase their stock options – not to maximize profits. Either way buybacks inflate the value of stocks, which the chattering class uses as an example of how dynamic the economy is.
Gary Stevenson from “Gary’s economics” defines what’s going on as growing inequality. One percenters get a rising share of income and use it to outcompete everyone else when buying additional assets. Thereby allowing inequality to grow further.
Michael Hudson explains that in a capitalist society debt always grows faster than the underlying economy. He also explains that left to itself an unregulated economy will likely turn into an oligarchy.
Sorry if I’m not exactly right.
If, as is currently the case, nothing is done about it, our current trajectory foretells a future that will likely be some sort of financialized neofeudal highly divided society characterized by a small ruling elite and lots of poverty.
Jean. I think you got it exactly right.
And from my perch here in Wisconsin, I can only see the overall situation getting worse. More $500 million dollar yachts, and more people sleeping rough in the parks. The only solace here is that the (mostly rural) Maga-Morons I know have grown quiet.
Most Trump flags have come down in rural NYS. During the 2020-2024 period the 2020 flags stayed up and even more new ones were hung. Until late winter it seemed like every 6 houses had a Trump flag, now very few. The shine has come off the turd.
Well, everyone on CNBC is saying (I catch a bit daily to hear what the current industry propaganda is) is that the cure for housing is to lower the Fed’s target rate. No mentioned of addressing incomes.
The solution to worker mobility obviously is to eliminate individual home ownership. Let them start job hunting when their lease is nearing its end. As floods, fires, etc. destroy single family homes, make sure they are replaced with apartments, preferably corporate owned. Eliminate mortgage tax deductions for individuals and allow accelerated depreciation of corporate owned housing. Put huge tariffs on furniture, major home appliances, HVAC equipment, but exempt corporations from the tariffs.
Mainstream economics clearly teaches that paying less than a living wage is an economic inefficiency — it creates externalities; costs borne by parties who get nothing in return. Employers, of course, benefit by not having to bear the full cost of procuring labor — they are ‘subsidized’ by the value of government programs such as SNAP, Medicaid, or Section 8; or by the value of room and board provided by relatives. Yet mainstream economists rarely point this out. And mainstream business/economy journalists aren’t asking them why not.
In one sense, revisionary histroy, mught suggest that the ‘South’ actually won the Civil War in that the reactionary powers, todyay’s oligarchs, intend to restablish the ‘plantation system’ (perhaps they already have) or go back even further and restablish feudalism, without the odious qualities of calling those tied down slaves or serfs. Isn’t capitalism based on the mobility of capital, the mobility of labor, & the mobility of trade. In the past 50 years, it seems that an aspiring middle class has been squashed in favor of a few increasing their already obcscene bank accounts. Tradionally, most people on the planet tend to live within a 100 miles of their birthplace – perhaps, a throwback to rural & agricultural societies. Cash is a motivator, ask the football stars who get paid a lot to take the risk of CTE early in life. People in the US stay put because of a lack of ready opportunities. The political economy will reap what it sows.
“Adversity makes men, and prosperity makes monsters.” Victor Hugo
We are a nation of monsters.
Yes, but what is to be done about mobility?
Well! There are various anchors for a mortgage: 1) anchor the mortgage to the borrower AND the house, 2) anchor the mortgage to the house but allow the borrower to change (assumable mortgage) and 3) anchor the mortgage to the person but allow the house to change. Wait, what? #3 is allegedly available in Denmark. I do not know the name, nor could I pronounce it except in a comic accent. Let’s call it a “portable” mortgage.
Now, consider all those Boomers living in family-sized houses, who really should be in a single-story unit with safety bars affixed to the walls of the bath stalls. (As The Youngest Boomer I do understand.) What if all of their mortgages were forcibly converted to “portable” mortgages, and they were allowed to go shopping for age-appropriate housing? How could such an unconstitutional taking occur? Well, almost all of their mortgages are held by Fannie Mae and Freddie Mac, who desperately wish to go private again so that they can make their CEO’s fabulously rich for no reason. What if, as part of the deal to go private, they were forced to accept “portabilization” of all mortgages held?
To be sure, forcing all mortgages to be portable would cause distortions in the mortgage market. “30-year” mortgages are, on average, dissolved after 7 years, and so are priced (roughly) from the 7-year US treasury yield rather than the 30-year yield. Forcibly converting a #1-style mortgage to a “portable” mortgage (or even an assumable mortgage) causes it to have an average life much longer than 7 years, and thus would be a forced markdown on the value of the mortgage.
No, you have this wrong. The mortgages were not made by Fannie and Freddie. They are only guarantors.
This whole mobility thing looks like a solution in search of a problem.
Back in the day, one consequence of buying a home was tying oneself to a community, and that was a good thing. People who build roots tend to care more about the community around them, vs. mobile transients.
I see this problem all around Atlanta, vs. my birthplace and beloved Buffalo. There is no sense of community here compared to where I grew up. Buildings get torn down, there is no preservationist mentality, and the government has no pride, to quote Chrissie Hynde.
Of course, corporate Amerikkka wants you mobile, so that you’ll be a good little serf and do as you are told. Those shareholders want to see a higher stock price, and if you have to relocate from a place you’re happy to a new one, tough shit.
My thought after reading that the young man in TX , offered a five figure salary, but no help- to move to Mass… I wonder what the wage differential is between his offer and the executives/ upper management compensation?
Keep the job posterd, never fill it, take the saved expense straight to the bottom line, flog the existing workers, and help reinforce Trump’s contention about junk data.
How many posted jobs/ unfilled opening are listed with absolutely NO intention of ever being filled?
Color me Jade green….
Thanks for emphasizing this point, Yves. I have always been amazed at the pervasive idea that moving from one house to another is somehow a huge cash positive exercise. People who have done it know that everyone has their hand out to people who are changing households, and are working to grab on to some of that home equity during the brief period it’s in a liquid state.
Even if you’re doing a “lateral” move, from one house to another that’s essentially equivalent, you need to have a lot of equity built up in the old house to make this an affordable change of life. There are also a million hidden costs associated with moving, like finding a new doctor, a new auto repair place, new child care for your kids, and on and on. If your life is well dialed in currently, you’re going to throw a lot of work away by moving. It’s easy to see why people don’t always jump at the chance, unless there is some very desirable change of circumstances associated with the move, increasingly unlikely in modern America.
I would not be surprised if there were also an overall need for vibrancy and hope in the society for people to be moving around a lot. A feeling that things are on their way up really helps to power you through the difficulties of moving around. As we know, in the US at least, the increasingly prevailing sentiment is that the future is going to be worse than the past in various ways. This may explain a lot of the lack of mobility that the journal decries.