I Would Go Where the Jobs Are
Bloomberg does a ranking of where one should go if he is unemployed. Before we go to their ranking criteria, lets think about what criteria I would recommend to someone:
- Go where the jobs are. Duh. Pay particular attention to where there are jobs that match your skills, but in general a rising tide will lift all boats (e.g. you don't just have to be an oil field worker to find opportunity in North Dakota, they are paying a fortune for waitresses and retail clerks to handle the new demand).
- Look at pay for your skills vs. cost of living. Manhattan may pay the most for waitresses but living costs there are insane. You can get good work in Vail, Colorado over the winter but good luck finding a low cost place to live anywhere nearby.
- Think about tax rates. You may be exempt now, but hopefully as things get better you will care about income tax rates, and if you are unemployed you certainly are going to care about sales tax rates
OK, so let's look at Bloomberg's ranking criteria. They also have three:
- Unemployment rate. So far so good. Go where the jobs are.
- State unemployment payment rates. Seriously, their criteria is not cost of living or average payments for new workers, but how much one can extract from the government for NOT working? But OK, this still makes some sense (though there are a lot of barriers to crossing state lines for a better unemployment deal).
- Income inequality. WTF? What in heavens name does this have to do with unemployed people and how easily they can improve themselves. Is this psychological -- ie you will feel worse about being unemployed if there are a lot of rich people around? The average unemployed American is a service worker (if you are a skilled manufacturing worker, say a machine operator, and can't find work, you are in a minority). Rich people drive demand for service workers.
bigmaq1980:
Income inequality = victim-hood mentality. It is shorthand by the left to say that there is something wrong and that the system is working against the victim.
Cost of living is a huge factor. I lived in a smaller city about 1-1.5 hrs drive to the center of a major metropolitan area (driving, but there was also public transportation available). There is a large "poor area" of that city. Housing was as or more expensive in that area, crime was higher, public schooling was much worse than the city I lived in. All these roll into the "cost" of living there. If all I could do was "a job at McDonald's", why not move to the smaller city where these costs were much lower? Surely much of their "possessions" are either minimal and quite movable or not worth moving. Not sure why people feel content to stay put in such awful circumstances and not seeming to bother to look around for something better...at least in the U.S..
January 18, 2013, 11:57 amRuss R.:
I no longer call it "income inequality".
I prefer the term "socio-economic diversity".
January 18, 2013, 12:49 pmdavesmith001:
I might be really stretching here, and this is not what Bloomberg was thinking, but high unemployment compensation might make it easier for someone to find a job if they wanted one since you'd have less competition. This would be a mildly interesting study that would be very difficult to do well.
January 18, 2013, 1:45 pmMatt Landry:
"Income inequality" is actually a decent statistical proxy for your issue #2. The more income inequality an area has, the more likely a relatively low-paid worker is going to be competing for housing and other local essentials against people with an order of magnitude more cash at their disposal. Whereas if the local job market pays in a narrower band, it's more likely that any employed person with reasonably frugal habits can afford to live there.
January 18, 2013, 1:54 pmWhat the...:
I'll second this as that was my initial thought as what useful thing could "income inequality" be a proxy for. It would make sense to use a more direct measure like cost of living or something though, instead of an indirect measure. But then Bberg wouldn't get the search hits on "income inequality" that they get here ...
January 18, 2013, 2:18 pmBGThree:
A lot of people can't move where the jobs are because due to perverse government incentives favoring home ownership, they are tied down to a house. A 3.5% mortgage, various acronym tax credits, and the mortgage interest deduction shouldn't be the "American Dream" that government subsidizes at the cost of a mobile labor force that rents.
January 18, 2013, 3:09 pmJames H:
I would think that you'd want to go where the "income inequality" is, probably more opportunity for advancement. North Korea has done very well at maintaining income equality, though, so maybe that would be a good model (except for those connected to the ruling class, of course).
January 19, 2013, 11:46 amnnu-16121:
There are some dying cities where that is the case, but many others where a quick zillow search on the property will show that rental income from the house should far exceed the mortgage+taxes+maintenance+lost of mortgage deduction. Price the rent at 20% below market and you will have responsible adults lining up to live in your fine former home.
January 19, 2013, 1:12 pmScott Grannis:
Bloomberg takes a reliably leftist view on almost all issues these days. Their news reporting is hopelessly left-biased.
January 20, 2013, 12:13 pmCappman:
I've been in the RV industry since 1995 in both Oregon and Utah. The economic downturn had a huge impact on the industry. After becoming unemployed, I moved to Florida from Utah because of the huge amount of snowbird activity here. I got a job on the second day! Plus no state income taxes and the weather is a whole lot better.
January 21, 2013, 9:11 amDon:
I was trying to find something mocking to say about this, but it seems Bloomberg has got that angle covered. Words fail me.
January 21, 2013, 11:41 pm