Labor mobility has been a competitive advantage for America in the past. Workers were more willing to move their families for better work opportunities than in other parts of the world. This meant that it was possible to get the best workers where and when they were needed.
But three subsidies have made it far less likely for workers to leave one employer in one city (or even unemployment in one place) for a better paying job in another locale:
1) Homeownership. When your new home instantly went up in value, it was not hard to sell your old home and move up to an even nicer one in the new location. But it works as a disincentive when home prices have stalled or gone down. The worker has to either come up with cash to sell his old home at a loss or rent it out (probably at a monthly loss).
2) Company/government pension programs. If you work for a fire department and have 10 years with that fire district, you will take a major haircut moving to another fire department. When was the last time you heard of a public employee or a union employee leaving one pension program voluntarily?
3) Healthcare insurance. Granted you can get usually qualify for Cobra insurance where you pay for your former employer for insurance over the next 18 months but then what?
This is just another example of the unintended consequences of government interference in the marketplace.
An interesting new college model - Minerva
10 years ago
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