The housing bust's impact on job mobility

It's one thing to read some generic story about people who are under-water on homes not being able to sell, pick up and move for another job, but it's a different story when there are some numbers to back up the claim. In the current issue of BusinessWeek magazine, the cover story reports that the U.S. has 3 million job openings -- openings which should be filled by the 13 million currently reported as unemployed. Although one major reason for the disconnect is due to an American workforce largely untrained for the jobs that are going begging -- such as those in education and health services, professional/business services and government -- another reason is the lower mobility. This housing bust has reduced people's ability move since the U.S. Census Brueau started keeping records in 1948, with homeowners only one-fifth as likely to move than renters. Whether by choice or not, this is an instance in which housing and economics play an inter-connected role. From the story:

Surprising statistic: In the midst of the worst recession in a generation or more, with 13 million people unemployed, there are approximately 3 million jobs that employers are actively recruiting for but so far have been unable to fill. That's more job openings than the entire population of Mississippi.

Sound like good news? It's not. Instead, it's evidence of an emerging structural shift in the U.S. economy that has created serious mismatches between workers and employers. People thrown out of shrinking sectors such as construction, finance, and retail lack the skills and training for openings in growing fields including education, accounting, health care, and government. At the same time, the worst housing bust in decades has left the unemployed frozen in place. They can't move to get work because they can't sell their homes...

The danger is that the U.S. labor market will become less flexible at the very time that Europe's labor market is finally loosening up. To avoid that situation, both employers and governments will have to step up retraining. Meanwhile, workers and employers will have to accept harsh new realities: lower pay for workers starting new careers, and imperfect fits for employers filling vacancies...

Even some people from hard-hit cities such as Detroit and Cleveland have passed up well-paying jobs with medical device companies in places like North Carolina because they don't want to move, says Lisa Mesnard, an executive recruiter with the Wellington Group in Fuquay-Varina, N.C. "I find it daily," she says. "They're ingrained in the community. [Although] they don't have a job, they're willing to wait it out....

The truth is, displaced workers may have to move down a few rungs as they switch careers because their skills are irrelevant in their new roles, says David H. Autor, a labor economist at the Massachusetts Institute of Technology. Many laid-off Wall Street financial engineers still haven't absorbed that, says Fred Wilson, a partner in Union Square Ventures, a New York venture capital firm. "For them to take a job that pays a lot less, they have to make a meaningful change in their lifestyle. And that is an issue."...