Relocation is stymied

Investment Analysis Clubs Macro Economic Trends and Risks
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Ever relocate to get a job? I have, more than once. I was brought up to understand that ambitious people followed opportunities.

One of America’s competitive advantages is our continental scope all speaking one language. Europe has the problem of small countries where people speak different languages. I remember hearing Chinese people communicating in English because one spoke Cantonese and the other spoke Mandarin.

https://www.wsj.com/economy/american-job-housing-economic-dynamism-d56ef8fc?mod=hp_lead_pos7

Nobody’s Buying Homes, Nobody’s Switching Jobs—and America’s Mobility Is Stalling

The paralysis has left many people in houses that are too small, in jobs they don’t love or shackled with ‘golden handcuffs.’ For everyone, there are economic consequences.

By Konrad Putzier and Rachel Louise Ensign, The Wall Street Journal, Aug. 14, 2025

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.….

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.

Others are slapped with “golden handcuffs.” Those who bought homes when mortgage rates were low or have stable white-collar jobs are clinging to them rather than taking big leaps….

When people can’t move for a job offer, or to a city with better job opportunities, they often earn less. When companies can’t hire people who currently live in, say, a different state, corporate productivity and profits can suffer….[end quote]

There are many reasons but the bottom line could be slower Macroeconomic growth.

Wendy

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I think, because of slower macroeconomic growth, people are less willing to give up what they’ve got, a bird in the hand.

If/when growth picks up, people will relocate to opportunity, once they’re confident it’s lasting and job/location benefits are more desirable.

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I don’t know if it’s discussed in the WSJ article (it’s behind a paywall), but this is not just a recent phenomenon. Mobility has been declining for quite a while, for a lot of reasons - and it’s been in decline during both good times and bad. That’s not likely to change even if economic growth picks up.

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Yes, I thought this coincided with wage growth stagnation and widening income inequality in the 1980s up to today. Also, as part of this, because of declining unionization and labor bargaining power and industrial shifting from manufacturing (the great migrations of the 1940s through the 1970s) to service type jobs where they are concentrated in a metro areas and/or you don’t need to move.

Yes, this is not at all a recent phenomenon.

Pete

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There’s also cultural and societal factors at play - an increased importance that we put on the “place” where you are (familial connections, historical background, institutions) as being important, rather than just where you happened to be from before you move on to where you’re really going to live.

And in some ways, this is a “feature,” not a bug. We have a thick net of policies that are all aimed at allowing people to be rooted - encouraging home ownership rather than renting, trying to bring jobs and economic recovery to places rather than moving the people, etc.

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Not mentioned (from what I can see) is the fact that the recent historical low the mortgage rates also has many people frozen in place. Few people want to move if it means their mortgage rate is going to go from 3% (or less) to 6% or more.

A 500k mortgage @ 3% is $2100 not counting taxes and insurance.

A 500k mortgage @ 6% is ~$3000.

A job move might require a family to earn $11,000 more just for the mortgage.

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Many companies are not hiring, and doing slow layoff’s. Currently employment numbers are not showing that very well. The biggest indicator is new graduate unemployment, even computer science graduates have over 15% to 25% unemployment depending on the region.

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$13,500 if you slice off the 20odd% you need to have after tax from your paycheck. That’s a pretty big lift for most job transfers, I would think. (And that’s just to break even).

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It’s not even close to break even for an upper middle class person that is selling a ~400k house and buying another ~400k house. The closing costs alone could be $30k+! Then add the bump from a 3% mortgage to a 6% mortgage (My daughter and SIL caught a downdraft in mortgages a few days ago and locked in a 5.75% rate! Hopefully they can close in time to keep that lock.)

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Unless I felt I could get more money and security, I am going nowhere right now.

That said my game is getting close to completion. It is commercially viable. In a downturn people will turn to more gaming.

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Are you sure? Maybe they will… by cashing out their NFT’s you were so in favor of.

Mike

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Mike,

The math is interesting. For many, a full set of subscriptions for internet TV runs up over $200. That can be cut way back, and a subscription for gaming is $10 to $20 per month, all you can play. If laid off from work with limited prospects, people will have time to play. It is also a very social thing to do.