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October 16, 2013 12:14 PM Demobilizing Working Americans

By Ed Kilgore

Throughout U.S. and world history, economic calamities have often spurred major relocations of people seeking land, jobs and a higher standard of living. So you’d think the Great Recession of own era would have increased personal mobility in search of upward mobility, too.

But as Tim Noah explains in the upcoming November/December issue of the Washington Monthly (a sneak preview is available here today), what we’ve seen recently has been an intensification of a long recent trend away from economy-driven relocations to places offering more jobs at higher wages, particularly for non-elite working people. And the culprit seems to be the growing gap between stagnant wages (even in high-income areas) and astronomical housing prices.

The underlying problem…isn’t the price of housing per se so much as its relationship to income. Since 2009, when the recession ended, the median price of a new house in the United States has risen 13 percent, even as median household income has fallen by about 4 percent. That doesn’t pose much of a problem for a migrating architect whose income is already well above the median, and who is likelier to have existing home equity that he can transfer to another state. But for construction workers, for example, it’s likely to be a big problem, and a reason why they can’t easily move to where the best-paying jobs are….
If labor markets were operating efficiently, construction workers, along with electricians, plumbers, nurses, nannies, elementary school teachers, and other working-class Americans, would receive enough compensation to live near the places where their work is most needed. But our labor markets are not efficient; rather, they are rigged and skewed, offering too much compensation to people with some skill sets (merging companies and writing derivatives, for example) and not enough to others whose skills are often just as hard to learn (e.g., brick laying and teaching children to read) and often more vital to society.

Noah (a WaMo alum now working at MSNBC) recently burnished his already formidable reputation as one of our generation’s top journalists by publishing a must-read book on inequality, The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It. Among other things, the book inspired a colloquoy between Mark Schmitt and Brink Lindsey that we published last year. Tim knows what he’s talking about. Take advantage of the sneak preview and check out his latest now.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

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