How to assist the poor in seeking better homes
For the past year or so, I have been involved in an on-again/off-again debate with a number of conservatives of the “paleo” tendency, Michael Brendan Dougherty prominent among them, on the question of what to do about economically stagnant and socially dysfunctional communities. This has taken place in the context of the election year’s attention to what we euphemistically call the “white working class” (its main problem is that it is not working) and its attraction to Donald Trump’s anti-capitalist populism. The answer I have come up with — that people should leave those communities, if they can, and seek better lives for themselves elsewhere — has scandalized some of my friends on the right.
It shouldn’t. And, in the past, it didn’t: No conservative social critic ever blinked an eye or coughed up his cognac when the best advice from the right to the discontented and ambitious poor was to get out of the ghetto or the barrio, get an education, get a job, and start a new life and a new family in some more prosperous corner of the county or country. But the dead and dying and white towns of Appalachia and the Rust Belt are another story. “Why should they have to go elsewhere?” our freshly created populists demand. The answer is, Because the lives they desire are not to be had where they are; their communities, along with their families in many cases, are terribly sick, and the hard truth is that they’d be better off putting some distance between themselves and them. Some of the diseases of poverty are individual, but some of them thrive in congregation (gang violence is the obvious example), and the only treatment for these is dilution. A 2000 Brookings study of Jack Kemp’s famous Moving to Opportunity program found “striking” evidence that poor families who moved out of poor communities with help from the Department of Housing and Urban Development earned more, enjoyed better health, and saw their children do better in school than did families who stayed behind.
Mobility works. But Americans’ mobility has been declining since the 1980s. We are, in fact, now less likely to have moved recently than are Canadians. This lack of geographic mobility correlates strongly with a decline in income mobility (the ability to improve one’s financial lot). It is a compound stagnation.
Ronald Bailey offers a helpful contribution to the debate in the January edition of Reason under the headline “Stuck.” Bailey pays a visit to his family’s ancestral home in McDowell County, W.Va., a moribund coal-mining village suffering from all the familiar Appalachian maladies: poverty, unemployment, disease, addiction, short lives. “Why don’t people just move?” he asks. He is partly able to answer his own question, from family experience: They did. Bailey’s family left in his grandparents’ generation, and about 80 percent of the county’s residents followed suit. The same pattern holds throughout Appalachia and small towns in the Rust Belt, but also in major cities and formerly major cities such as Detroit, where the black middle class left the city almost as a unit in the course of a remarkably short period of time, between ten and twenty years. Similar patterns can be seen in cities such as Philadelphia and Baltimore, where the middle class (black, white, and other) abandoned the cities but did not stray too far, leaving for better schools, lower taxes, and safer streets in the suburbs. The sobering fact is that the story of inner-city Baltimore is a great deal like that of small-town Kentucky: The people who remain are to a very large extent those who lack the resources — financial or spiritual — to leave.
We could do with a great deal less sentimentality about all this. There is something to be said for rootedness and fixedness, and the Burkean critique of modern mass capitalism is not without some merit. But the insights of the Burkean disposition are almost entirely negative. It is good to be reminded from time to time what is in the “losses” column of the ledger, but the question is how to make it balance out a little better. If we are committed to wishful thinking about an improbable return to post-war economic conditions and yet unwilling to maintain Americans in economically marginal communities in public dependence indefinitely, then what can be done to help them become economically self-sufficient and form stable families?
Republicans, or at least a non-trivial portion of them, are for the moment in danger of being seduced by autarkic protectionist thinking and by what we used to call “industrial policy,” as though central planning conducted by right-leaning politicians were somehow immune to the vices of central planning conducted by left-leaning politicians. There is a lot wrong with that view, but for the purposes of the immediate discussion it is sufficient to understand that there is no level of protectionism or industrial subsidy that is going to “bring back manufacturing jobs” to places such as eastern Kentucky, which never had very many of them to begin with, or to attract such antediluvian industries as textile manufacturing and semi-skilled electronics assembly to post-industrial small-town America. The reason for that is simply that there are not enough skilled workers in those places, and especially in their remote communities, to justify large investments in factories and other physical capital. You’d be a great deal more likely to see that kind of work cropping up in facilities on the edges of Houston, Los Angeles, or Nashville, with their large, skilled work forces and ready connections to global markets and transportation infrastructure. It isn’t impossible to manufacture clothing in the United States — Brooks Brothers and Hart Schaffner Marx both make high-end suits in the United States — but there is not much reason to do it in any given small town in West Virginia or eastern Ohio.
If the work is not coming to the people, then the people have to come to the work. There is not a plausible third option.
To understand how to help people move, it is helpful to understand why people move in the first place. In most cases, it isn’t for work. According to census data, most people move in pursuit of better housing, not better jobs. A University of California study (written up by Richard Florida in The Atlantic) also finds that housing drives mobility more than work does, and that areas with newer and cheaper housing enjoy significantly more mobility. Cheap housing is the secret sauce of places such as Houston and Las Vegas, and the want of it is the curse of places such as Silicon Valley. Indeed, a spate of recent California media reports about homelessness in the Bay Area and throughout the technology corridor found relatively little actual homelessness but instead found workers coming to participate in the technology boom (which is a boom for people in service industries, too, and not just programmers and engineers) and living in crowded and uncomfortable conditions, e.g., four families in an apartment designed for one small one. Which is to say, ambitious working-class people with families seeking their fortunes in Palo Alto are a lot like ambitious young while-collar singles crowding four to a studio apartment in Brooklyn: They’re willing, at least for a period, to endure bad housing arrangements. But doing that as a 22-year-old publishing assistant in New York is different from doing it as a father of three in Oakland. The housing crisis in California is almost entirely man-made, a result of extraordinarily restrictive zoning and environmental codes and epic NIMBYism of a uniquely Californian variety. A Republican party wishing to renew its prospects in California (which it once dominated) or in American cities could — and should — make affordable housing the centerpiece of its agenda for the cities. For people who are not working at Facebook or Goldman Sachs, it is a great deal easier to relocate into a $700-a-month apartment in San Antonio than to find a decent shelter in San Francisco. If we want workers and would-be workers to move, we ought to try to ensure that there are places for them to move to.
There is another aspect of housing that reduces mobility, especially during downturns: excessive mortgage debt. One would think that after the financial crisis of 2008–09, we would have got religion on the question of upside-down loan-to-value ratios and their toxic effect on the finances of unemployed or otherwise economically distressed families. To the considerable extent that Washington sets the standard for mortgage lending, we should make it well-nigh impossible for non-millionaires to get a mortgage with less than 20 percent down. As our Reihan Salam and others have argued, home ownership with 60 percent equity is an asset; home ownership with trivial or negative equity is an economic millstone around the necks of immobilized workers. The housing market is currently in reasonably good shape — and it is far easier to reform a healthy market than a collapsing one. Here, President Trump has an opportunity to use his often-expressed penchant for strong executive action in his actual area of expertise: real estate. Regulatory reforms in that direction at FHA and FHFA would not necessarily require congressional action.
Improving the housing situation is a long-term project — even if zoning rules were changed overnight, housing wouldn’t simply spring up from the earth. An expedient for the meantime would be simply to pay people to move. We already spend a great deal of money, through unemployment benefits, paying people to stay in place. It would make sense to offer a worker eligible for 26 weeks of unemployment benefits a lump-sum payment of his remaining eligibility (perhaps in the form of relocation assistance, or maybe just a check) if he moves to take a job after two or three weeks rather than riding out the entire 26 weeks of eligibility. We could also use tax credits or other instruments to encourage businesses to be more proactive in helping blue-collar workers relocate for work. Under current practice, relocation benefits are reserved almost entirely for the white-collar workers who need them least.
None of this is going to fix what ails Bailey’s McDowell County or Dougherty’s Garbutt, N.Y. But it would help ensure that geography is not destiny for people residing in such places and desiring something better.