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Mortgage Prisoners Are Hampering The Job Market

April 3rd, 2008 · 3 Comments

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This is something I’ve been worried about for some time now.

We all know that the collective declines in the value of our homes has hurt our pocketbook.

But the resulting immobility of the workforce – the fact that we can’t just pick up and move to a better job because we can’t sell the house we’re in now – is hurting the overall job market.

The rapid decline in housing prices is distorting the normal workings of the American labor market. Mobility opens up job opportunities, allowing workers to go where they are most needed. When housing is not an obstacle, more than five million men and women, nearly 4 percent of the nation’s work force, move annually from one place to another — to a new job after a layoff, or to higher-paying work, or to the next rung in a career, often the goal of a corporate transfer. {…} Now that mobility is increasingly restricted. Unable to sell their homes easily and move on, tens of thousands of people like Mr. Kirkland and Dr. Morgan are making the labor force less flexible just as a weakening economy puts pressure on workers to move to wherever companies are still hiring.

Read the whole article for a comprehensive description of the problem.

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Tags: Finance · Jobs

  • Scott

    So those of us who rent and can pick up and go will do better?!? I’m looking and I can’t seem to find another job! And I am looking out-of-state as well!

  • Willy

    Will the result be that companies become more mobile instead? Will this be the catalyst for making telecommuting a commonality?

    What will be the effects of cheaper housing costs?

    I really don’t see the economy seizing up because of lack of mobility in the workforce. If that did happen, one solution would be more immigrants.

  • Brian

    I think the concern here is the job market could get bad on both ends. 1) The housing crisis causes the economy to seize up and people stop hiring. But on the flip side, 2) Workers are tied to their mortgages and localities, and thus it’s hard for employers to recruit talent they need… expect when that talent happens to be local.

    The key issue is that the mobility of workers is important to keep the labor juices moving around the country.