Thursday, May 13, 2010

Unemployment: Geographic Mismatch

by Calculated Risk on 5/13/2010 08:45:00 PM

Last night I linked to an article from Catherine Rampell at the NY Times that highlighted the skills mismatch problem related to long term unemployment.

And from Haya El Nasser at the USA Today: More move, but not long distance

More Americans moved last year than in the previous year, but most didn't go far, a sign that foreclosures and housing costs are still keeping people close to home.
"The main reason migration has ticked up (in 2009) is local movement," [William Frey, demographer at the Brookings Institution said]. "Foreclosures have a lot to do with that. A lot of people have moved to renter status."
"This is the absolute worst time to lose our residential mobility," says Richard Florida, a professor of U.S. urban theory at the University of Toronto. "It's important for people to move to where the new opportunities are, because that is the cornerstone of our idea-driven economy."
The loss of mobility is a huge concern. Usually people can move freely in the U.S. to pursue employment - but it is more difficult now, especially for borrowers who are underwater on their homes.

In March, Atlanta Fed President Dennis Lockhart discussed both of these mismatches: Prospects for Sustained Recovery and Employment Gains. These mismatches are part of the reason I expect the unemployment rate to stay elevated for some time.