I’m a fan of @MichaelRStrain and read with great interest his piece on how to help workers in struggling areas.
In short, he argues for people-targeted policies instead of so-called “place-based” policies.
1/
bloomberg.com/amp/opinion/ar…
In short, he argues for people-targeted policies instead of so-called “place-based” policies.
1/
bloomberg.com/amp/opinion/ar…
Strain correctly notes the challenges posed by regional inequality and declining geographic mobility even in the midst of a healthy national economy.
In spite of growing divides between thriving and struggling areas, Americans are simply not moving at the rates they once did.
In spite of growing divides between thriving and struggling areas, Americans are simply not moving at the rates they once did.
He points to growing evidence that restrictive land-use policies and onerous occupational licensing rules have created harmful barriers to mobility. This is spot on.
These are two areas where policy redistributes benefits from low- & moderate-income people to the more affluent.
These are two areas where policy redistributes benefits from low- & moderate-income people to the more affluent.
Rather than enact place-based policies focused on bringing greater investment and opportunity to struggling areas, Strain argues that we should do more to help workers leave such places via a relocation subsidy.
The reasoning here is pretty straightforward:
The rational thing is for workers to leave bad labor markets. The cost of moving is significant. Therefore, we should encourage mobility by offsetting those costs.
The rational thing is for workers to leave bad labor markets. The cost of moving is significant. Therefore, we should encourage mobility by offsetting those costs.
I agree we should be more focused on ways to boost mobility within and between labor markets. High levels of mobility act as an important shock absorber for the economy.
A relocation benefit could make sense as part of a broader toolkit for struggling people and places.
A relocation benefit could make sense as part of a broader toolkit for struggling people and places.
However, it’s worth noting the limitations, chiefly:
1) Many people simply do not want to move, for reasons that go well beyond financial considerations,
2) The cost of the move is one thing, but the cost of *living* in opportunity-rich places is arguably a bigger barrier,
1) Many people simply do not want to move, for reasons that go well beyond financial considerations,
2) The cost of the move is one thing, but the cost of *living* in opportunity-rich places is arguably a bigger barrier,
And 3) like the place-based policies Strain dislikes, his solution would likely subsidize some behavior that would have happened anyway.
That’s okay — none of these is a reason not to try such an approach. They just illustrate why complementary approaches are needed.
That’s okay — none of these is a reason not to try such an approach. They just illustrate why complementary approaches are needed.
Also: it’s not at all clear a relocation incentive would help shrink regional disparities. In fact, on its own there’s a chance it would only exacerbate such divides by accelerating population loss, which itself is a cause — not simply a consequence — of economic decline.
Here I should plug @JasonSzegedi for his lengthy critique of the “U-Haul School of Urban Policy”.
As he notes, there are many reasons why “just move” is not an adequate response to the challenge.
As he notes, there are many reasons why “just move” is not an adequate response to the challenge.
But even proponents of a relocation incentive would admit that *most* workers are not going to move to SF or NYC — or for that matter Columbus or Indianapolis.
Most are going to stay put.
So what can be done for those people and their communities?
Most are going to stay put.
So what can be done for those people and their communities?
That question has led many, including yours truly, to the view that place-based policy should be playing a more central role in the economic toolkit.
“Place” was the blind spot in our national debate for too long. That is only now starting to change.
eig.org/dci
“Place” was the blind spot in our national debate for too long. That is only now starting to change.
eig.org/dci
Where I probably differ from Strain is in seeing the need for place- and people-targeted solutions to work in tandem.
We don’t need to choose one or the other, and we’re not doing nearly enough in either category.
We don’t need to choose one or the other, and we’re not doing nearly enough in either category.
We should combine direct, people-focused policies (e.g., wage subsidy) with decentralized, market-oriented ones that encourage greater investment in the businesses and built environments of struggling areas (e.g, Opportunity Zones, Heartland Visas).
eig.org/heartland-visa
eig.org/heartland-visa
Such targeted policies can only be truly effective in conjunction with broad-based reforms, such as to land use, licensing, noncompetes, etc.
After all, what good is moving if you can’t afford to live where the jobs are? Or if you can’t take a good job because of a noncompete?
After all, what good is moving if you can’t afford to live where the jobs are? Or if you can’t take a good job because of a noncompete?
I agree w/ @MichaelRStrain that the wrong answer to regional inequality is to attack capitalism.
The real issue is that we have a policy infrastructure that heavily favors affluent people, places, and firms. That’s not capitalism’s fault. It’s the result of choices.
The real issue is that we have a policy infrastructure that heavily favors affluent people, places, and firms. That’s not capitalism’s fault. It’s the result of choices.
We’ve chosen to chronically undervalue the potential of large swaths of our country — and the deep connection people feel to their communities.
We’ve chosen not to provide much in the way of resources to help struggling areas weather economic shifts or reinvent themselves.
We’ve chosen not to provide much in the way of resources to help struggling areas weather economic shifts or reinvent themselves.
It should be obvious that our current approach is woefully inadequate in scale and imagination. We’re nowhere close to being serious about this challenge.
It should be equally obvious that there’s no single solution. We need to try more things and be experimental at every level.
It should be equally obvious that there’s no single solution. We need to try more things and be experimental at every level.
National growth is essential, but growth alone won’t necessarily bridge the divide.
The recovery from the Great Recession was overwhelmingly fueled by the growth of thriving places. Meanwhile, distressed areas as a cohort saw continued decline.
eig.org/wp-content/upl…
The recovery from the Great Recession was overwhelmingly fueled by the growth of thriving places. Meanwhile, distressed areas as a cohort saw continued decline.
eig.org/wp-content/upl…
Americans don’t just live in a national economy. They live in communities.
So when we talk about place, we’re talking about people as well. The community-based disparities in growth since the Great Recession have served to reinforce unacceptable racial wealth gaps.
So when we talk about place, we’re talking about people as well. The community-based disparities in growth since the Great Recession have served to reinforce unacceptable racial wealth gaps.
One of these days I’ll do a thread on how to learn from the shortcomings of past attempts at place-based policy.
In the meantime I’m glad that smart folks like @MichaelRStrain are highlighting the challenge of regional disparities and putting ideas on the table. /End
In the meantime I’m glad that smart folks like @MichaelRStrain are highlighting the challenge of regional disparities and putting ideas on the table. /End
