R Street scholars argue relocation is key to fighting poverty
WASHINGTON (Jan. 2, 2014) – Decades of declining geographic mobility have been a key contributor to stagnating incomes and, more recently, persistently high unemployment rates, R Street President Eli Lehrer and Senior Fellow Lori Sanders argue in a new piece the pair co-authored for the Winter 2014 edition of National Affairs.
The nation’s prevailing policy of “place-based relief,” with programs designed to help the poor where they already live, has not served to cure or even to mitigate poverty, Lehrer and Sanders write. Moreover, analysis of the Census Bureau’s annual American Community Survey demonstrates that low-income people, especially those born into poverty, have a particularly difficult time moving.
Lehrer and Sanders cite a 2011 review by the National Bureau of Economic Research which found internal migration has fallen noticeably since the 1980s, reversing increases from earlier in the century. In 2012, the Census Bureau reported that, between 2005 and 2010, internal migration was the lowest since modern record-keeping began in 1940.
“This decline in Americans’ geographic mobility has correlated with a well-documented 40-year trend of falling income mobility,” Lehrer and Sanders write. “While this correlation does not, by itself, prove a causal link, the evidence that geographic mobility can mitigate poverty is robust.”
To reverse these trends, they recommend policies to increase the supply of rental housing, expand transportation networks (particularly bus service, the most efficient and adaptable form of public transit) and streamline welfare programs. Moreover, they propose new tools like mobility grants and migration zones to provide direct incentives to relocation.
Mobility grants would allow an unemployed individual who lacks significant assets to “cash out” future unemployment benefits to which he or she would otherwise be entitled in a single lump sum. The funds would then be used to pay for the job-search and relocation costs entailed in moving to another metropolitan area.
Migration zones would be established in areas facing labor shortages to encourage migrants to relocate. Zones would offer special federal or state tax credits to finance apprenticeship programs, wage subsidies and other incentives intended to encourage firms to hire non-local people from areas that currently have high rates of unemployment.
“While certainly not a cure-all for America’s current economic malaise, increased geographic mobility could well help many Americans facing economic struggles,” Lehrer and Sanders write. “Efforts to increase geographic mobility should play a key role in any economic agenda devoted to restoring income mobility and reviving the American dream.”
Read the full article here:
http://www.rstreet.org/policy-study/moving-to-work/
