(Bloomberg) — Ryan Yang could have taken a job in a New Jersey DNA sequencing laboratory after graduating from college last year. Instead, the 23-year-old lives with his family in Queens, N.Y., still unemployed and searching.
With the expense of commuting or relocating, “I thought about it and it just didn’t seem right,” said Yang, a biology major who rejected the job 50 miles away in Piscataway to look for opportunities closer to home. “If I was previously living in New Jersey, I think I would have taken that job in a heartbeat.”
Yang belongs to the age group, adults under 35, that’s traditionally the most mobile part of an American work force constantly on the move since the 19th century. Now, that’s changing as members of the millennial generation, the estimated 85 million born from 1981 through 2000, prove less restless than their forebears. The standstill may be holding back recovery in the labor and housing markets.
“They remain stuck in place,” said William Frey, a senior fellow at the Brookings Institution in Washington who specializes in migration issues. “The recent slowdown is really an interaction of demographics and a continued housing- and labor-market freeze. Millennials are mired down, very cautious about buying a home or moving to new areas.”
While Frey’s analysis of U.S. Census Bureau data shows Americans under 35 move almost twice as often as other age groups, the pace is slowing. In the year ended March 2013, just 20.2 percent of those aged 25 to 34 relocated, the lowest rate for that age group in data going back to 1947, down from 31 percent in 1965, Frey said.
While the decline in mobility is more pronounced among the young, older Americans, too, have become less inclined to pull up stakes. Among all Americans, 11.7 percent moved in 2012-13, just above the 11.6 percent all-time low reached two years earlier, according to Frey. After a pickup in mobility in 2011-2012, “the comeback now appears to be stalled,” Frey said.
Economists and demographers say a combination of relatively low-paying opportunities, the burden of student loans and an aversion to taking risks explains the reluctance to relocate. Student-loan debt rose $114 billion in the year ended in December to $1.08 trillion, according to the Federal Reserve Bank of New York.
The decline in mobility among young adults “is economically significant,” said Chris Christopher, director of consumer economics for IHS Global Insight Inc. in Lexington, Massachusetts. “It is a lot more expensive to get started, to move, to find a job. In terms of social mobility, job mobility, overall geographic mobility, they are not doing as well as their parents and grandparents.”
On the move
That amounts to an historic shift for a nation whose expansion relied on a mobile population. “One thing cannot be denied: America is always on the move,” wrote poet e.e. cummings.
“Migration is a key advantage of the American system historically,” said Kenneth Johnson, senior demographer at the Carsey Institute at the University of New Hampshire in Durham. “The ability of growing areas to attract migrants from a large national labor pool has historically helped the U.S. adapt to changing economic conditions.”
If workers won’t go where the jobs are, it takes longer for employers to fill vacancies. There were 4 million positions open in March, close to a six-year high, the Labor Department reported May 9. The figure is among the job-market barometers that Fed Chair Janet Yellen tracks.
“Low mobility could exacerbate structural imbalances or mismatches based on geographic location of jobs versus workers,” said Harry Holzer, a professor of public policy at Georgetown University in Washington and former chief Labor Department economist.
The mismatches are evident in regional disparities in joblessness. In March, 59 of 372 U.S. metropolitan areas had unemployment rates under 5 percent, while 25 were above 10 percent, the Labor Department reported April 29. Nationwide, joblessness dropped to 6.3 percent in April, the lowest level since September 2008.
The latest Fed Beige Book review of regional economic conditions highlighted the pinch, with six of 12 Fed districts – - Dallas, New York, Cleveland, Richmond, Chicago and Kansas City — reporting difficulty finding skilled workers.
Companies in the district including Texas were paying more to lure truck drivers and oil-field services workers, while employers in the New York, Richmond, and Chicago districts had trouble attracting technology employees, the report said.