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Conventional economic thinking tells us that people go where the jobs are. In America, there is a long history of expansion to the west in search of opportunity. In the UK, Margaret Thatcher’s employment secretary, Norman Tebbit, liked to report her father when she was unemployed. “I got on my bike and looked for work, and continued to search until he found it. “Obviously, it’s easier to find a job when you’re mobile. But what happens when people can’t or don’t want to move to where their jobs are?
This is a question that policy makers are addressing in the wake of the pandemic-related job destruction. Covid-19 approached different groups of people in different ways, much better than in professions where virtual knowledge staff require face-to-face contact. Some academics say the pandemic shows that income inequality is declining because it reflects responses to short-term government policies, such as the distribution of stimulus controls. In the longer term, it is clear that the nature of the work will change radically, with the possibility of more work anywhere, be it Bangalore or Bangor.
This can open a new globalization white-collar labor markets that can benefit workers rising digital markets, but it can also put pressure on work in richer countries. On the other hand, American workers who cannot afford housing, childcare and schooling in expensive coastal cities can go to one of the most expensive ones. “Zoom cities” which have grown during the pandemic.
It is still impossible to know how the arbitration of jobs, place and work will be handled. What we do know is that this place is much more important in terms of labor markets than we thought. Economists have traditionally thought of it according to people, not geography. But it is taking more of a location-based approach to job creation. Research has shown that communities adapt very differently to economic delays, so a variety of tailor-made approaches are needed – rather than policies designed to create employment growth at the national level.
Harvard and Berkeley economists, for example, show that intergenerational mobility varies significantly in the US. A 2014 study showed that the probability of a child born in the 1980s reaching the top quintile of the national income distribution, starting from a lower-income family, was 4.4 percent in Charlotte, North Carolina. service area). In contrast, the chance for the same team in San Jose, California was 12.9 percent. Sites with greater mobility such as San Jose combined for less residential segregation, less income inequality, and better primary schools. They also had greater social and family capital stability.
The point about social capital matters tremendously. Think of the book Hillbilly Elegy, when college-educated workers lose their jobs, they do not move, but rather to cling to what is lacking in social capital in their home or community. The events back up this narrative. As “China Shock” the authors, economists David H Autor, David Dorn and Gordon H Hanson, have found that classical economic assumptions about labor market adjustment in response to trade and technology-related job displacement have not been true in recent decades. “For reasons that economists don’t yet understand,” Hanson wrote External Issues more recently, less educated workers have rarely “chosen to move elsewhere, even if local market conditions are bad.”
The result is localized recessions and the accompanying dangerous policy. What to do in the face of this? For starters, Hanson and many experts advocate for greater improvement in staff in areas that are undergoing particularly dramatic changes through trade support. But, again, the solutions should be local, rather than for everyone. Some people will need money to pay their bills, while others want help with re-training or job search. All this should be done with the support of the private sector. When the pandemic occurred, European governments did a better job of keeping people working because they worked with the private sector on short-term work schemes and wage subsidies. American companies simply released people, and left them to defend themselves.
This raises the question that government subsidies or incentives from local cities and regions should be designed for the benefit of business and work. They tend to be the usual subsidies given to attract employers to city emergencies erode the tax base and does not help in troubled regions in the long run. This is something the Biden administration is carefully thinking about as it re-examines Trump-era “Opportunity Zone” tax rebates.
Ultimately, better education is the best job buffer. I would like the Liberals to see a high-tech version of vocational programs in secondary education he threw it discreetly In the 1970s, there were concerns about poor children being welders and richer, say, columnist opinions (about this, I would note that Brooklyn plumbers do more than I do in FT). We need both liberal education and workplace learning, and there are now models that mix the two, such as the nationally and internationally scaled P-Tech program.
Even in a globalized world, it is a place. We need to create jobs. But we also need to bring people to where they are.
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