ONE NATION, DIVISIBLE | Struggling Americans Once Sought Greener Pastures—Now They’re Stuck

Janet Adamy and Paul Overberg, Wall Street Journal (August 2, 2017) [original article contains more links/images and charts.]

Image from article, with caption: The many lakes around West Branch are a big draw. Above, Larry Scott fished on Lake George.

Excerpt:

Like a lot of small towns in sparsely populated American counties, West Branch [a small town in Michigan], population 2,067, is in an economic funk brought on by the decline of manufacturing and farm consolidation. In recent years, a handful of retailers, a flour mill and a carpet shop have all closed their doors.

What is troubling about this rural town and many places like it is that while lots of struggling residents see leaving as the best way to improve their lives, a surprising share remain stuck in place. For a number of reasons—both economic and cultural—they no longer believe they can leave.

In rural America, which is coping with the onset of socioeconomic problems that were once reserved for inner cities, the rate of people who moved across a county line in 2015 was just 4.1%, according to a Wall Street Journal analysis. That’s down from 7.7% in the late 1970s. It has fallen faster than the mobility rate in metropolitan areas, which the rural rate is now slightly below.

This drop in mobility is not only keeping rural residents from climbing a ladder to better livelihoods, it is choking off the labor supply for employers in areas where jobs are plentiful. This limits the economic growth that naturally occurs when people and capital cluster together, says David Schleicher, a professor at Yale Law School who has studied the issue.

It has also contributed to the nation’s deepening political divide. Small-town residents fed a populist revolt that helped put Donald Trump in the White House last year, reinforcing the administration’s plan to focus on issues such as curbing immigration and creating jobs through infrastructure spending. ...[JB emphasis]

Economists say there are several practical reasons for the declining rural mobility—the first being the cost of housing. While small-town home prices have only modestly recovered from the housing market meltdown, years of restrictive land-use regulations have driven up prices in metropolitan areas to the point where it is difficult for all but the most highly educated professionals to move. ...

For many rural residents across the country with low incomes, government aid programs such as Medicaid, which has benefits that vary by state, can provide a disincentive to leave. One in 10 West Branch residents lives in low-income housing, which was virtually nonexistent a generation ago. Civic leaders here say extended networks of friends and family and a tradition of church groups that will cover heating bills, car repairs and septic services—often with no questions asked—also dissuade the jobless and underemployed from leaving. ...

Another obstacle to mobility is the growth of state-level job-licensing requirements, which now cover a range of professions from bartenders and florists to turtle farmers and scrap-metal recyclers. A 2015 White House report found that more than one-quarter of U.S. workers now require a license to do their jobs, with the share licensed at the state level rising fivefold since the 1950s. ...

Tom W. Smith, who runs the University of Chicago’s General Social Survey, says that cities’ welcoming attitudes toward immigrants from abroad, same-sex marriage and secularism heighten distrust among small-town residents with different values. That widens the cultural gulf.

Economists have tried to measure whether Americans’ eroding trust in one another is damping mobility—such confidence helps ease the transition to a new town—and found signs that this sliding trust may be keeping people from uprooting.

According to the GSS, the share of Americans who agree with the statement “Most people can be trusted” has fallen over the past four decades to 31% in 2016 from 46% in 1972. Raven Molloy, an economist with the Federal Reserve Board of Governors, found in research that states with large declines in overall trust were also places where job-switching had decreased markedly. ...