Moving On Up...No Longer

In a piece on how globalization disproportionally impacts some areas over others, The Economist studies how in the past people in lower-income areas would move up by simply moving to other parts of the country.

But people in the rich world are less able and willing to move to thriving places than in the past. America, once inveterately itinerant, has settled down a lot... Even so, it is still more footloose than Europe. Each year just over 2% of Americans move across state lines, whereas only 1.5% of Europeans move between regions within their home country. Despite the freedom of movement created by the EU’s single market, only 0.37% move from one country to another. But mobility in America is on the decline.

The pull exerted by successful places is offset by policies that restrict population growth and that were not imposed a century ago. Stringent planning rules, and homeowners who prefer low-density living, limit new building in rich cities. That makes housing hard to afford. Though the wages available in rich American cities are higher than in poorer ones, even for those without many qualifications, high housing costs more than offset the pay increase.

At the same time, the push to leave failing places has weakened. The growth of the welfare state limits the chances that declining cities will disappear. In the 19th century, mining towns like Bodie, California—which once boasted several thousand people, a newspaper and a railway station—emptied out entirely when local mines closed. Today government benefits and pension payments spare people the horrible choice between moving or penury. Indeed, they can encourage people who would otherwise move to stay put, because meagre fixed incomes go further in places where living costs have tumbled.