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Why Relocating for a Job is So 1980

by Darwin on December 11, 2012

Nevada is the place to be a card counter, Kentucky is a haven for jockeys, and Florida is the best place to be a crocodile hunter. But unless you’re in one of these niche fields, the best state to work might just be your own. Relocating for a job is out, according to new research in migration.

A study of available jobs from state to state reveals that states and their employment possibilities are more similar than ever before. Since the 1980s, the variance between jobs and their salaries from state is in perpetual decline. Job opportunities in Massachusetts, for example, are the same as those in Mississippi.

Here’s the change in variance of jobs by industry and career over time:

The research shows that individual states have become more like one another. While you’re unlikely to get a natural gas job in California, or an acting role in North Dakota, most careers are as available in one place as they are another, no matter how specialized.

Why Relocating for a Job is Dead

The research team behind the project wanted to learn why Americans are no longer moving. After adjusting for the real estate bubble, college education, and a great many more factors that have changed since 1980, they came to the simple conclusion that the labor market is more efficient than ever before.

Here’s why:

    1. Informational asymmetry is gone – The internet and falling airline prices post-deregulation make it possible for more people to see more places than ever before. No longer do people travel to new cities on a whim to evaluate potential job opportunities. Sites like The Ladders (I LOVE the free reports on what 6-Figure jobs are available in my area) make it possible to see careers all over the United States without traveling thousands of miles. Since 1991, as information began to flow more freely online, migration has fallen for people of all ages.
    2. Rise in telecommuting – Researchers find that managers and service workers are only slightly less likely to migrate than all other occupations. Falling communication costs and email make it easier, faster, and less costly for information to travel between offices.
    3. Localized “outsourcing” – Just as companies outsource overseas to reduce labor costs, big firms are moving jobs around the United States to arbitrage labor cost disparities. Dallas, Texas is an excellent example as it has low costs of living and an educated populace ready to work. The city is an oddity in that it has a growing finance and technology sector in a state and city better known for oil fields and cattle ranches.
    4. Relocation packages are costly – Employers find it is easier to open new operations than relocate employees. A typical relocation package which covers moving costs and even closing cost and down payment support is simply too expensive in a reality in which the average worker will have more than seven employers over his or her lifetime.
    5. Cities over states – Researchers ultimately conclude that while geography is important, the biggest change is in the role of cities. Localized economies in big cities sustain a very diverse job market for everyone.

Anecdotally, it seems a workers’ willingness to chase new job opportunities around the country may be much lower today than in years gone by. Nothing is guaranteed any more – at least not in the same way a job offer might have been a guaranteed way to have a long, lengthy career in a new place to call home. Employers may be more likely to appease employee’s conservatism in the job hunt.

 

How much would it take you to move for a job?

Would you need more or less in 2012 than in 2004, 2000, or even 1990?

{ 10 comments… read them below or add one }

Financial Samurai December 12, 2012 at 1:13 am

Don’t think is ever leave SF or Honolulu. Don’t understand why people would choose to live in freezing cold places that are not diverse and beautiful I’m this day and age.

Do you? All it takes is a short flight and voila! No horse and carriage necessary.

Sam

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Darwin December 15, 2012 at 3:57 pm

California is bizarre and getting worse by the year. City after city is declaring bankruptcy and the libs can’t help but keep pandering to unions and special interests and trying to tax their way out of it. If you think that model is sustainable, I have a bridget to sell you. I would never live there. Nice place to visit, like many third world countries.

Northeast has something to be desired in terms of weather, but many people actually enjoy the seasons. Personally, I could do without winter, but my wife would beg to differ.

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Karyn S December 12, 2012 at 11:43 am

With salaries these days, relocating is also difficult to do. Unless you know of someone who lives in that area already, it’s not worth doing unless you saved up a lot of money over the years.

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Darwin December 15, 2012 at 3:59 pm

I used to find that even for low-level positions, companies were willing to offer relo packages (I actually got $5K in college for my first job); but these days with so many people underwater and companies cutting costs, it seems to be rare.

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krantcents December 12, 2012 at 2:39 pm

I think everything depends on the position. If I were offered CFO of a public company that had compensation in the 7 figures and the possibility of earning more in bonus and stock. That would at least get my attention. It is not forever anyway! I would do it for a few years and add to the wealth bucket. A different perspective.

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Darwin December 15, 2012 at 4:00 pm

The one time I had an opportunity for significantly more, I ended up passing it up because staying where I’m at was just more important than money.

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Lance @ Money Life and More December 12, 2012 at 7:38 pm

I left for a new state but not because of a job because I wanted to move there and subsequently found a job. After I got the job I then moved.

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Darwin December 15, 2012 at 4:01 pm

Are you in a field where it’s easy to find work anywhere? My field is rather limited in where I can work. Must be near a biotech/pharma plant, of which we see dwindling numbers each year as companies merge and sites are closed.

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101 Centavos December 15, 2012 at 11:34 am

From an employer’s perspective, a shortage of skilled labor can only be solved by offering relo packages.

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Darwin December 15, 2012 at 4:02 pm

Or, the willingness to pay higher salaries (market rate). Many major firms keep claiming there is a “skills gap” but want to pay skilled machinists, operators, programmers, etc. less than the going rate in other states. You wanna play, you gotta pay!

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