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I'm not an economist so I don't have any facts to back this up, but it is quite clear that worker geographic mobility in the US is very high. Most people have moved, either "out west" to try California, or "down south" to try Atlanta or North Carolina or Florida, or "back east" to check out NYC or Boston. I would guess that around 90% of retirees move--practically nobody lives in the same house for a long time. And when we move, it's not just down the street it's across the country.

And I think that this is a big problem for Europe, because the language and social barriers make it harder to move. It would be interesting to compare the fraction of "foreigners" in a theoretical federal Europe to that of "out-of-staters" in the US.

by asdf on Tue Jun 21st, 2005 at 04:24:53 PM EST
That's a good point, but I would add that the high geographic mobility of Americans relative to Europeans is a long-standing phenomenon, whereas Europe's unemployment problem really only dates from the early 1980s. Before that European unemployment rates had actually been lower than those in the US since World War II.

So, unless there was a big increase in immobility of European labor since 1980, it can't be the whole answer.

It could be, though, that labor immobility is interacting with something else (some aspect of globalization?) that keeps unemployment high.

by TGeraghty on Tue Jun 21st, 2005 at 04:57:43 PM EST
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My own impression is that the "labor mobility" tht used to be the feature of the US economy you describe, it is rapidly becoming only prevalent within professional and white collar workers. In this respect, the minimal unemployed worker protection and welfare benefits for the low paid are much more likely to have a more stationary effec because they are state based.

Again, while your observation of the situation in Europe may have been true in the past, the situation is turning  round, even more so with the new accession countries. Movement to cover shortages of skills is now happening, despite the attempts by some countries to restrict it. The postition should speed up considerably once the transitional arrangements for the east in some of the more protectionist markets expire. Remember the scare figure in the recent French referendum debates was the "Polish plumber", shorthand for these newly available skilled workers.

The UK fully applied the freedom of movement and work provisions from May last year, with the exception of welfare benefits. I have seen this have immediate effect as the block I live in used a contractor employing (wethink) Hungarian painters. The new digital aerial (antenna) system is being installed by contractors from Portugal who are gaining experience here so that they can get contracts for similar work back home.  

by Londonbear on Tue Jun 21st, 2005 at 04:58:08 PM EST
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