Moving to Opportunity

On yer bike

A area typically returns to normal after an adverse shock not because employment picks up, but because workers leave the area.

Another thing keeping people in dead-end towns is government benefits. Moving often means having to re-enroll to get benefits. Even national programs can discourage moving to a place with more opportunity because living expenses are usually lower where the economy is in the tank. Other housing issues include needing a deposit. Posible credit issues. Tenancy commitment.

Entire neighborhoods had high unemployment and crime, which led some people who did have jobs to flee, causing a downward spiral.There are a large number of children who would struggle no matter where they grew up. What we need to do is get the good ones away from them.

Higher share of two-parent families, greater levels of involvement in civic and religious groups and more residential integration of affluent, middle-class and poor families.

Displaced children are 9 percent more likely to be employed and earn 16 percent more as adults. Children were less likely to become single parents when they grew up, were more likely to go to college.

Each additional year in a different place had roughly the same average effect on a child’s adult earnings. A teenager’s year in a better neighborhood mattered as much as a 9-year-old’s year — but 9-year olds still had their teenage years in front of them. Different effects on siblings, who have so much in common. Younger siblings who moved from a bad area to a better one earned more as adults than their older siblings who were part of the same move. The particular environment of a city really does seem to affect its residents.

Although most places with better odds of escaping poverty have higher rent.

Isn’t this more a case of growing up in a concentration of poverty leading to its normalization? Latin American immigrants doing the jobs that American poor people could do, and doing them cheaper and perhaps better.Immigration in dissuading people from moving to better job markets: the immigrants tend to get there first.

Richer people and businesses relocated long ago – gutting the tax base. School districts, law enforcement, fire fighting services, and other public goods are underfunded.

This flight to the suburbs is subsidized by governments with lower marginal tax rates and tax deductions. Guess who has a harder time escaping? Poor people.

“On yer bike” was the popular summary of the attitude of Mrs Thatcher’s government to the young unemployed who wouldn’t bestir themselves to move around to find work. the whole world is moving to London for work. But not the Brits.

One issue is that underclass culture males often are nervous and uncomfortable outside their own neighborhoods

Attitudes seem to vary across different parts of the country: rural Scots expect to have to move to find work; armies of Londoners seem to think it an affront to the natural order that anyone would expect them to move elsewhere for work.

Similarly relocation causes stress for many animals.

UK parliamentarian David Willetts explained in 2009’s book “The Pinch” why native poor in Britain don’t move to jobs in London:

Bubble in London did so little to alleviate unemployment among young Englishmen in blue collar cities like Liverpool. He writes: “Quite simply, high house prices were one factor sucking in immigrants.” Willetts observes, “The young man from Liverpool does not see why he should live in more cramped conditions than his family back in Liverpool occupy”. In contrast, the immigrant crams into a house with many others from his country. “His willingness to be under-housed gives him a labour market advantage and it is greater if house prices are higher”. In turn, sucking in immigrants creates a vicious cycle, driving up housing prices, which drives out more natives.

Moreover, remittances sent home from London to Liverpool buy a lot less in Liverpool than remittances sent home to a poor country:

“So it is not that our Liverpudlian is somehow a bad person compared to our Pole. It is that he or she cannot capture similar benefits for their family by under-housing themselves in London.”

Willetts sums up:

“The crucial proposition therefore underlying the economics of immigration in Britain is as follows. The larger the proportion of earnings consumed by housing costs, the greater the benefits of under-housing and the greater the price advantage of immigrant labour. It was not despite the high cost of housing that immigrants came to the house price hotspots in Britain to make a living—it was because of them.”

The supply of housing in London is relatively fixed. Everyone is competing for the same flat. The person willing to pay the most for that flat will get it.Imagine there are only two bidders, Wiktor Warsaw and Linda Liverpool.Wiktor earns £400/week and Linda earns £500/week.If they were both willing to dedicate an equal share of their income to housing, Linda would be able to outbid Wiktor.However, if Wiktor is willing to spend half his income on housing and Linda is only willing to pay 30%, Wiktor can outbid Linda.Now imagine that Wiktor is willing to split a one bedroom flat with Piotr. Now he’s able to massive outbid Linda even though Linda earns more than he or Piotr do.

That’s how low skill immigrants can push out higher income natives.

He goes on to add:

“People are not willing to accept under-housing for ever. It may be bearable if you are single and in your twenties or early thirties. … But it is much harder having a baby in circumstances like that.”


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s