Edward Glaeser: prediction

Transcript context

…Interesting. Why don’t Americans move as much as they used to a century ago? So you have a paper from 2018 titled Jobs in the Heartland, where you talk about how there’s increasing divergence between the unemployment rates between different parts of America. Why don’t Americans just move to places where there are better economic circumstances? I want to highlight one point here, which is that you said “unemployment rate”, and I want to replace that with non-employment rate. That’s partially what we’re seeing now. It looks like America’s labor force couldn’t be better in terms of the low levels of unemployment, but what’s happened over the last 50 years is there has been a very large rise in the share of prime-age men who are not in the labor force. So they’ve stopped looking for work, and those guys are miserable. It’s not that those guys are somehow rather productive and happy,–– this is a very bad outcome for prime-age men. I’m separating men from women, not to say that the female labor markets aren’t just as important, just as fascinating, just as critical. But labor force participation means something different for many women than it does for men. There are many women who are not in the labor force who are doing things that are enormously productive socially, like caring for their children and caring for their families. I wish it were symmetric across the genders. It just isn’t true. I mean, there just are very few men not in the labor force who are doing anything much other than watching television. It’s just a very different thing. So yes, there are big differences in the non-employment rate. There are some parts of America where, for much of the past decade, one in four prime-age men have been jobless. It’s an enormous gap. The question is, why don’t they get out? I think the answer is really twofold: one of which is the nature of how housing markets have frozen up. Historically, the differences in housing costs in the US weren’t that huge across places. Most parts of America had some kind of affordable housing, and it was relatively easy to put up. At the dawn of the 20th century, these were kit helms sold by Sears and Roebuck that sprung up by the thousand. You bought the kit from Sears and Roebuck, and you just built it yourself. After World War II, it was mass-produced homes in places like Levittown. For most of the last 50 years, in places like coastal California or the East Coast, building has just become far more difficult. With the decline of mass-produced housing, it’s become far more expensive, and it becomes harder and harder for relatively low-income people to find opportunities in places that have high levels of income, and high levels of opportunity. That’s partially why there’s not just a general decline in mobility, there’s a decline in directed mobility for the poor. Historically, poor people moved from poor areas to rich areas. That’s pretty much stopped. In part, that’s because rich areas just have very, very expensive housing. The other thing is the rising importance of the informal safety net. So if you think about most particularly prime-aged men, they’re not receiving significant handouts from the government except if they’re on disability. he rising importance of the informal safety net. So if you think about most particularly prime-aged men, they’re not receiving significant handouts from the government except if they’re on disability. But they will typically have some form of income, some form of housing that’s being provided for them by someone other than themselves. A third of them are living in their parent's homes. That informal safety net is usually very place dependent. Let’s say you’re living in Eastern Kentucky; it’s not like your parents were going to buy you a condo in San Francisco. You can still have your own bedroom, but you can’t go anywhere else and still get that level of support. And so that’s, I think, another reason why we’re increasingly stuck in place. The third you mentioned, is that a third of the non-employed population of young men or is that a third of all young men? Non-employed is a third of non-employed prime aged men. So that’s 25 to 54. There are a lot of 45 year olds who are living on their parents’ couches or in their old bedroom. It’s a fairly remarkable thing.…

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