As rural towns decay before our eyes, many urban-dwellers have been left asking why people don’t just up and move.
Looking at where people with certain income levels tend to live may offer an answer to that question.
The new study by the National Bureau of Economic Research focuses on why regional income convergence has declined in the U.S. Essentially, the researchers wanted to figure out why Americans don’t move anymore to climb the income later.
The United States was built upon expansion, and people across the world have been moving in hopes of finding better opportunities for thousands of years. Yet starting in the 1980s, most working-class Americans stopped moving, clinging to their current areas to this day.
Though housing prices have always been higher in high-income states, housing prices across the nation are now consuming a greater percentage of income than ever. Because of these high living costs, moving isn’t always a worthwhile investment.
Basically, in places where there isn’t a lot of land, low-skill migration is significantly slower. This is because for low-skill workers, paying higher rent rates doesn’t always mean a higher income. The study found that low-skill workers saw the smallest return when living in a high-income area, meaning they almost always lose money when they move to cities.
Why does it matter?
Lower-skill Americans used to move to find new, higher-paying industries. Whether people were moving to California during the gold rush in the mid-1800s or moving to big manufacturing cities in the 1990s, Americans always followed job opportunities.
However, in recent years, companies in the United States have stopped drawing people out to rural areas, and many workers who can afford it are now opting to live in cities. As companies as big as General Electric and IBM move their headquarters from suburbs back to cities, high-income workers are leaving rural states in the dust.
There are still people living in rural areas, but the problem is that many of these people are low-skill workers who don’t have college degrees. Researchers have found that when students leave rural areas to attend college, they often don’t return, leaving rural states such as Mississippi without college-educated workers.
This shift leaves a huge educational and financial gap between rural and urban areas, and because of this, well-being in rural areas has severely declined in recent years.
Though it seems harmless that more educated and high-income people cluster in cities, it creates a division that is dilapidating the U.S.’ rural areas. Low-skilled workers can’t afford to move to cities, and rural areas can’t draw in high-skill workers because they lack the amenities that cities already have.
If the steep cost of housing in cities continues to rise, low-income workers will continue to self-isolate. But on the other end, if rural areas continue to crumble, no high-income or high-skill workers will want to move there.
The urban-rural divide is worsening at both ends, and if it continues to go unaddressed, the revitalization of rural areas is going to be exceptionally difficult.
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