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Deciding if the Labor Market is Okay
September 6, 2015How To Stand in Line Less
September 8, 2015A life changing event like marrying, becoming jobless or changing employers could make us decide to move to another state.
Where are we going? To the importance of being able to move.
Where We Move
Below, the Atlas Van Lines interstate migration map identifies the states with the highest percent of people entering and those with the highest proportion of leavers:
And here are some facts from the map. Isn’t it interesting that North Dakota is #1? With the price of oil so much lower, I wonder if their inbound migration will reverse.
Why We Move
Jobs
As a “dollar zone,” the U.S. makes moving easy. So too does a single fiscal policy that provides the same Medicare and Social Security dollars, no matter where we live. The key is a shared monetary and fiscal environment.
Looking at more specific reasons for interstate migration, researchers in a 2011 St. Louis Fed paper cited jobs most frequently. With only 28.2 percent of the jobless staying put, unemployment was important but changing employers and becoming employed also topped a reasons for moving list.
The St. Louis Fed data below show the prevalence of jobs related reasons:
Taxes
Scholars have debated whether taxes stimulate migration. One recent report says that taxes have little or no impact when compared to jobs, less expensive housing and weather (retirees). Disagreeing, a response says the contribution of taxes to a moving decision cannot be ignored when we look at the margin.
In theTax Foundation map (below), you can see high and low income tax states.
Our Bottom Line: A National Market
Easy interstate migration meant a national market could develop. Looking back to the 19th century, we had a transportation infrastructure of roads, canals and then railroads that moved people and goods. With midwestern farming, southern cotton and northeastern manufacturing, each of us could do what we did best and then trade. Because each section of the country was producing what it was most suited to, we enjoyed the benefits of comparative advantage.
Now again we continue to enjoy the positive externalities of state-to-state migration. Being able to move freely across the vast expanse of the U.S.means households and businesses make production and distribution decisions that can allocate land, labor and capital most efficiently.
