home is where the jobs are15 Apr 2007
This installment of the Undercover Economist from last month is interesting, but it left a pretty bad taste in my mouth. It discusses how “home ownership” encourages unemployment – which doesn’t sound so much like economics as much as common sense (insert joke about how they are the same here). He focuses specifically on “house” ownership, but it’s clear that what is really at the center of all this is a “home” – and that when the market for your skilled trade dries up in your home, you have to move or be unemployed. And since people don’t like to leave their home, they remain, unemployed.
The increasing liquidity of labor is pretty standard stuff in the world of economics: the increasing commoditization of human capital leading to increasingly fractured communities, impermanent industry locuses, etc etc. It makes the construction of a permanent, productive community more and more difficult. What’s odd about the article is that it seems to take this all in stride, and in fact seems to be encouraging it:
Recent research in the Economic Journal suggests that people who own their own homes form denser local networks, which help unearth local jobs. Still, the jobs tend to be less well-matched and commuting distances are longer. So, professor Oswald is right to argue that we should do everything possible to free up impediments to renting or to selling a house and buying a new one. It would be handy if we were allowed to build houses near Manhattan, too.
Does this not strike anyone as scary? When the primary impediment to some semblance of full employment in our economy has become the complete elimination of any permanance in home or community, I think perhaps we can speculate that something in our system is very broken.