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A Personal Demonstration of How "Voting With Your Feet" is Often Easier for the Poor than the Rich:

In the past, I have written about why, contrary to conventional wisdom, "voting with your feet" generally benefits the poor more than the relatively affluent - in part because it is much easier for the poor to do it. Ironically, I have now uninentionally confirmed my theory in my own life.

From 1997 to 2003, I moved five times to different parts of the country. Most of these moves were relatively easy to bear. Why? Because I didn't have much stuff to pack, transport, unpack, and generally worry about. Moreover, I was always moving into apartments or (in one case) a condo. So there was no contracting work to arrange for to get the place ready. Both the lack of possessions and the nature of the places I lived was dictated by the fact that I was fairly poor.

By contrast, my fiancee and I have recently moved into a new house a mere three miles away from my old condo. For me at least, this move has been more stressful than the previous five combined. Why? Because, due to my much higher pay since becoming a law professor, I now have many more possessions. The packing and unpacking have been a major pain, to put it mildly. Similarly, moving into a house required hiring contractors to do some work to get it ready, and dealing even with good contractors (like the ones recommended to us) is time-consuming and annoying, especially for people who are inexperienced with it. The process of selling the old home and purchasing a new one also requires an investment of time, effort, and money that people moving from one rental unit to another don't have to deal with.

In sum, while each of my previous moves involved merely two or three days of unpleasantness, this one has been a weeks-long ordeal. I hasten to add that no one should feel sorry for me. On balance, it is much better to be relatively affluent than to be poor (even if only temporarily poor, as I was during my pre-lawprof days). That much is obvious.

However, the much greater difficult of moving when you own a lot of stuff is an additional reason why voting with your feet is often easier for the poor. My experience is far from unique. Studies by economists find that homeownership (a proxy for wealth and possessions), tends to reduce labor mobility significantly. Another way of putting it is that the relatively high moving costs faced by the affluent make it less likely that they will move to a different jurisdiction to take advantage of its superior policies, unless the superiority is very great. The poor, by contrast, can often move to exploit relatively smaller interjurisdictional differences.

Obviously, if your wealth is really great, you can to some extent reduce the pain of moving by paying people to do everything for you. I did in fact pay movers to transport my stuff and pack a few especially hard to deal with items. However, that can get extremely expensive quickly, and only the really wealthy can easily afford to hire movers to do everything difficult. Even for them, the substantial additional cost of hiring professionals to do more things acts as a further deterrent to moving in the first place.

ruuffles (mail) (www):

Similarly, moving into a house required hiring contractors to do some work to get it ready

Another way of putting it is that the relatively high moving costs faced by the affluent

You just answered your own question. Any difficulties of the wealthy arising from more possessions or obligations are offset by the increased wealth they can use to hire others (movers, cleaners, etc) to do it for them. Further, the new jobs that the wealthy get almost always including moving expenses. Even if you're moving because of local government policies, you can get a job lined up ahead of time.
8.30.2009 9:38am
ruuffles (mail) (www):

Similarly, moving into a house

OK that is one aspect where being poor and renting is an advantage. See Tim Geithner's still-listed house in NY for an example.
8.30.2009 9:40am
John Burgess (mail) (www):
Being poor, however, presents problems in providing credit ratings and in coming up with deposits and/or down payments. Without those, it's easy to move if you're satisfied to live under a bridge or something, but not into a house or apartment.
8.30.2009 9:42am
CDU (mail) (www):
Any difficulties of the wealthy arising from more possessions or obligations are offset by the increased wealth they can use to hire others (movers, cleaners, etc) to do it for them.


Only to a limited extent. When moving there are some things that really can't be left to others. If you actually want to be able to find any of these possessions, you've really got to do a substantial amount of the unpacking. Furthermore, as Ilya noted in regards to contractors, supervising the hired help can be difficult and time consuming in and of itself.
8.30.2009 9:46am
Ilya Somin:
Being poor, however, presents problems in providing credit ratings and in coming up with deposits and/or down payments. Without those, it's easy to move if you're satisfied to live under a bridge or something, but not into a house or apartment.

Most apartment rentals don't require any credit ratings, and certainly not an especially high one if you're renting the kind of relatively cheap apartment where the poor tend to live. I rented many cheap apartments over the years, and was never asked for a credit rating.
8.30.2009 9:47am
HarroldWine (mail):
Congrats on the new house and the fiancee.

But if you think that simply moving in is the end of it and the most stressful thing, WAIT, just wait until a while down the road you find that the kitchen and bathrooms aren't adequate and need to be remodeled.

Months and months of living without a kitchen, or your favorite bathroom. Dust and dirt everywhere. If you work at home, lots of noise while the contractors hammer, and saw and blast their radio. That will stress you out. Basically living with your contractors is what it is.

And don't think it isn't going to happen because you're different. It's just a matter of time, months, years maybe, but it's coming, it's coming. Go rent the movie Money Pit (1986 Tom Hanks), very, very funny, because it's true.

You've stepped through the looking glass and are falling down the hole.

Good luck.
8.30.2009 10:08am
Pro Natura (mail):
What about pro forma moves -- like so many Senators and Representatives make -- to escape taxes, regulations, and other government annoyances while maintaining their pieds a terre.
8.30.2009 10:08am
Simon (391563) (mail) (www):
Joplin figured this out a long time ago.
8.30.2009 10:10am
John Burgess (mail) (www):
Ilya: You may not have been asked, but that doesn't mean your credit rating wasn't assessed. Having worked in apartment buildings, I know that one of the first things apartment management companies do is to look at credit ratings.

You are correct that low ratings matter less for apartments of lesser caliber. If the would-be renter shoots too high, however, there can be a 'causeless' rejection.

Title 5 housing can provide entry for the less-than-fully qualified, of course, but getting enrolled in that or similar state programs is not trivial for the poorly educated or recent immigrant still trying to understand the American bureaucratic maze.
8.30.2009 10:29am
PJens:
This is a bit off topic, but the move is actually a good test for your relationship. I think the saying goes something like that before marriage, a couple ought to; help someone (or each other) move, take a three day trip in a car, and wall paper a large room. If you can do those things with out getting on each other's nerves, your relationship will probably be ok. Getting a puppy is a good way to practice for kids too.

Best wishes!
8.30.2009 10:38am
krs:
Agreed with John Burgess. I think most of the apartments I've rented in the last 5 years have asked me to sign a form authorizing them to run a credit check and to give them about $50 to pay to have it done.
8.30.2009 10:41am
byomtov (mail):
relatively high moving costs faced by the affluent make it less likely that they will move to a different jurisdiction to take advantage of its superior policies, unless the superiority is very great.

Heart-rending indeed.
8.30.2009 10:50am
Barbara Skolaut (mail):
"the much greater difficult of moving when you own a lot of stuff is an additional reason why voting with your feet is often easier for the poor"

Or, if you're rich enough, you can hire someone(s) to do it all for you.

As the man (no, I don't know which man) famously said, "I've been poor and I've been rich. Rich is better."

Welcome to the wonderful pain-in-the-a** world of home ownership, BTW.
8.30.2009 10:51am
Scape:
In addition to wealth, an equally important factor could be age.

Rich or poor, having kids and a spouse and a home is going to make moving any distance farther than a neighborhood a significantly larger undertaking. Schedules to organize, two new jobs instead of one new job to find, new schooling, new doctors/friends/music lessons/etc. for the family...

Whereas for younger people, moving essentially costs the price of a large pizza and a couple six packs in order to entice a few friends along to help. And poof, you're done. It's not that clear to me that wealth is the biggest barrier, here.
8.30.2009 10:53am
MarkField (mail):
Anecdote /= data.
8.30.2009 10:57am
Ken Arromdee:
If you're really poor, and move a large distance, you lose a lot from not being near relatives that can help you with things like childcare. You may have trouble just paying for the move, whether you have few things to pack or not. Heck, how do you even pay for getting to the place you moved to? If you don't have a job, being without a job for a few months will hurt you a lot more than it hurts a rich person--and you're more likely to not have a job, because it's much harder for a poor person to a) get a job a long distance away in advance of the move or b) be in a profession like attorney where he can always find work. Nor do you have savings which can help with the move. And for that matter, just the cost of finding a place to move to can be very high--you're not going to be flying there ahead of time to scope out apartments, and since you don't own a car there are a limited number of places you can move to anyway.

And you'll have trouble affording the security deposit and other deposits, and passing the credit check (which as other commentators pointed out, you probably did have, even if you think you didn't.)

Basically, the problem with using your experience as an example of how easy it is to move when you're poor ignores the fact that you weren't poor enough. Even if you were poorer than you are now.


Studies by economists find that homeownership (a proxy for wealth and possessions), tends to reduce labor mobility significantly.


That page quotes one study (not "studies") which says that home ownership is correlated with (not "tends to reduce", since no causal effect was shown) unemployment (not "labor mobility"--close but not quite). You're drawing stronger conclusions than are actually in your reference.

And calling homeownership a proxy for wealth is like saying that owning a 747 is a proxy for wealth. It's a proxy for wealth above a certain level. Differences in wealth that remain below that level may have effects that don't show up.
8.30.2009 11:39am
erp:
Boo-Hoo.
8.30.2009 11:40am
one of many:
I think Scrape is right. Of course, until recently in the US, at least, age was a good proxy for wealth.
8.30.2009 11:44am
one of many:
M. Arromdee:

Most (just about all) general rules break at the margins. The exceptionally poor and the exceptionally wealthy will be exceptions to the general rule. Yes support structures (not just relatives) will be more of a factor to moving to those more dependent on them, however how many people only have support structures (family) in one state?
8.30.2009 11:54am
Joseph Slater (mail):
One of many:

Ken Arromdee made the point I was going to make about support structures like families. For poor or even lower middle class (or even middle class) folks with children, being near close relatives is a big boon -- one it would be hard to give up. Heck, I'm one of those affluent law profs Ilya mentions, and my wife and I rely on nearby relatives for childcare sometimes. I'm guessing that the poor / lower middle class also include a decent share of single parents, who especially benefit from family members helping with the kids.

And in my experience -- and I'll admit, I haven't seen studies -- working class and poor folks tend to have family members clustered more around one town / city / geographical area than do families with more wealth. And even if you have some cousin living on the other side of the country, remember, not every family member is personally close enough to you to (i) want to do childcare or (ii) to be trusted with childcare.
8.30.2009 12:16pm
first history:
MARKFIELD sez:

Anecdote /= data.

The California Public Policy Institute has found data that comfirms Prof. Somin's thesis. In a study of domestic migration in the 1990's, the CPPI found that:


Californians leaving the state are more likely than those who stay to be unemployed, to be less educated, to live in poverty, and to receive public assistance. In contrast, newcomers moving to California tend to have higher incomes and more education and are less likely to live in poverty or receive public assistance.

The flow of lower-income Californians, who account for many of the people leaving the state, was as great at the end of the decade as it was during the recession of the early 1990s. During the last half of the decade, nearly 25 percent of domestic migrants leaving the state were living in poverty.


Also, the CPPI has found:


More poor households than higher-income households leave California for other states. When we compare households that left the state with those that arrived from 2004 to 2007, those in the bottom fifth (with annual incomes of about $22,000 and less) are most likely to leave: 1.73 of the poorest households leave for every one that arrives. This ratio declines as income rises— so that among the top fifth (with annual incomes of about $110,000 and up), only 1.16 households leave for each one arriving. Among the highest-income households, with annual incomes above $200,000, only 1.09 leave the state for every arrival.

.....
If high income taxes were chasing away rich Californians, high-income households would be more likely than low-income households to move to states without income taxes—but they aren't. How come? States without income taxes are cheaper than California in other ways—housing costs, for example—that matter to all types of households, not only to those with the highest incomes. In other words, California does lose people to lower-tax states—but not just because of income taxes.
8.30.2009 12:16pm
corneille1640 (mail) (www):
A large number of people I know who are currently affluent like to talk about the days when they were poor and, they joke, "living under bridges and eating boxed macaroni and cheese." Yet it turns out they had enjoyed a lot of advantages that in many ways were invisible to them. Also, they never lived under bridges, and they went out to eat quite a bit, saving the mac'n'cheese for special occasions.

Mr. Somin raises some good points in mentioning that it's probably harder for homeowners, with a lot of possessions, to move than it is, all other things being equal, for renters with few possessions to move.

But his anecdote misses the mark, and I would need more information. Was Mr. Somin one of the working poor who had no family resources whatsoever? Did he have no means of support, such as student loans (government subsidized loans) or scholarships or fellowships or jobs waiting for him at the places he moved to? Did he already have his law degree, was he working on one, was he doing adjunct jobs, was he working temp jobs, was he biding his time before he got a job that would pay him according to his qualifications?

I don't know the answers to these questions as I'm not up to date on Mr. Somin's personal history. But these questions are not mere ad hominems Mr. Somin's personal situation in the 1997-2003 period is entirely relevant if he wishes it to be generalizable enough to say that "'voting with your feet' generally benefits the poor more than the relatively affluent - in part because it is much easier for the poor to do it."
8.30.2009 12:25pm
einhverfr (mail) (www):
Hmmm.....

I think there are differences between the Very Rich, the Somewhat Wealthy, the Somewhat Poor, and the Destitude. It seems to me that Illya is talking about the somewhat wealthy vs somewhat poor. The destitute may find it somewhat difficult (or rather painful) to move. The very rich have additional options.
8.30.2009 12:28pm
Duffy Pratt (mail):
Making more money doesn't require that you get more things. So it's at least possible for someone to get paid more, and still not accumulate a bunch of junk that would need moving.

And if you get wealthy enough, you can just buy and furnish a new house and leave the old one where it is.

Stupid post, but congrats on the new house.
8.30.2009 1:05pm
MarkField (mail):
firstmoney, thanks for that link. Real data is always preferable to "this happened to me, therefore it is true for everyone".
8.30.2009 1:25pm
Cato The Elder (mail) (www):
Except when it comes to archaic civil rights regulations and their proximate justifications, right, MarkField?
8.30.2009 1:37pm
yankee (mail):
Another way of putting it is that the relatively high moving costs faced by the affluent make it less likely that they will move to a different jurisdiction to take advantage of its superior policies, unless the superiority is very great. The poor, by contrast, can often move to exploit relatively smaller interjurisdictional differences.
Two points:

First, as many commenters above point out, there are scads of moving costs that are greater for the poor than for the rich. You are pointing to some costs of moving, but ignoring the others.

Second, those moving costs that are higher for the rich are easy for the rich to avoid, should they wish so. Rather than buying many possessions, a rich person can live an upper-class lifestyle by spending their money on food, entertainment, or travel, or by buying fewer but more expensive possessions. High-end apartments, houses, and condos can all be rented. I have no data, but rich people who expect they will or may move are probably much more likely to make lifestyle choices that make moving easier.
8.30.2009 1:39pm
one of many:
M.Slater:

I don't disagree with the concept that support structures are a factor in determining mobility. The problem I have is considering it a determinative factor without more. As mentioned in the previous post by Prof. Somin, those with an income below $15,000 moved interstate twice as often as those with higher incomes, which indicates that lack of support is of marginal impact.

I cannot easily find a chart of just income by age, but the general trend seems to be that as age increases so does income and the extremely low income earners are very young, until age 65 when once again income drops (but not as low it is for the young). If there is a strong correlation between age and income, which there appears to be, then age based factors may be determinative in determining mobility which can be mistaken for income as a factor. Those under 25 and over 65 make up over 75% of those earning less that $15,000/year - if this age cohort is 2 times (or more) as likely to move as 25-65 age cohort then we can conclude that the income/mobility correlation is more likely an artifact of age than income. Correlation is not causality and in a case where there is one factor which has a strong correlation to multiple factors (age, which in addition to it's strong correlation to income also has a strong correlation to having dependent children) it is easy to draw a wrong conclusion about causality.

To return to the concept of familial support structures being determinative, we'd have to see if people with dependent children with local family were more or less likely to move than those without local family but similar income to support this idea. We might then compare that to the mobility rate for those without dependent children relative to family structure. IF those with children and family and lower income move less than those with children and family and higher income, and those with children and family and lower income move less than those with children no local family and lower income, and those with children and family and lower income move less than those without children but have local family and lower income - then and only then may we reasonably conclude that support as envisioned by M. Arrondee are a determitive factor in ability to vote with one's feet.
8.30.2009 1:52pm
yankee (mail):
But these questions are not mere ad hominems Mr. Somin's personal situation in the 1997-2003 period is entirely relevant if he wishes it to be generalizable enough to say that "'voting with your feet' generally benefits the poor more than the relatively affluent - in part because it is much easier for the poor to do it."

Also, if Ilya is like the vast majority of Yale Law students, he has parents in the top 10% of the income distribution who were subsidizing him directly or indirectly. If nothing else, a graduate student who has the bank of Mom 'n Dad as an insurer of last resort has a financial situation very different from that of a "real" poor person.

Of course, it's possible that Ilya may have been among the very small minority of Yale Law students who come from a poor background, in which case his financial situation would not have been impacted by his parents in the same way.
8.30.2009 1:57pm
one of many:
I should point out that age correlates to many other things that just income and probability of having dependent children - education for instance, college degrees are less common in the under 25 over 65 age range than in the 25-65 age range, but it is doubtful that lack of education is the cause of mobility.
8.30.2009 2:01pm
Salaryman (mail):
Of course, it's not always easier for the poor to "vote with their feet" than the rich, but one reason why it frequently is has, surprisingly to me, not been discussed. My grandfather was, essentially, a dirt poor peasant. He came to this country not speaking the language and having no real family here because he figured -- astutely enough -- that when you're a peasant you're unlikely to get much richer where you are and can't get much poorer elsewhere so you may as well give elsewhere a shot. Living in Southern California, I see a lot of poor Central Americans making exactly the same calculation. I notice very few wealthy Central Americans doing the same (except some affluent Mexicans seeking to escape the violence of the drug cartels).

I would expect similar considerations to apply w/r/t movement between the United States. If you're doing OK where you are, it'll be "harder" to move simply because there's a greater chance that you'll do no better (and maybe worse) elsewhere. If you're really struggling where you are, "elsewhere" may connote opportunity rather than risk.
8.30.2009 2:10pm
Chris_t (mail):

In addition to wealth, an equally important factor could be age.

Rich or poor, having kids and a spouse and a home is going to make moving any distance farther than a neighborhood a significantly larger undertaking. Schedules to organize, two new jobs instead of one new job to find, new schooling, new doctors/friends/music lessons/etc. for the family...

Whereas for younger people, moving essentially costs the price of a large pizza and a couple six packs in order to entice a few friends along to help. And poof, you're done. It's not that clear to me that wealth is the biggest barrier, here.


Excellent point. That's been my experience as well. A case of budweiser goes a long way.
8.30.2009 2:40pm
Joseph Slater (mail):
One of many:

I was not trying to argue that having a family nearby to help with childcare was determinative in terms of ability, or perceived ability, to move. I was just suggesting that it seems to me -- and I'll admit this is based on what I've observed and what seems logical to me rather than a review of any study on the subject -- that it was a factor that would tend to inhibit poor to lower-middle class folks more than upper middle class folks.
8.30.2009 2:42pm
Sammy Finkelman (mail):
It's the PLURAL of anecdote that = data.

I think maybe your distinction between poor and not poor might be the distinction between people who have furniture and clothes and things that need to go into boxes and people who do not have so much.

I would think preventing theft and loss would be a big reason for someone to do as much of the moving themselves as possible.
8.30.2009 3:12pm
MarkField (mail):

It's the PLURAL of anecdote that = data.


I think you meant /=. One anecdote or many, it still ain't data.
8.30.2009 3:21pm
ZaraB:
One good reason, perhaps the most important, the rich won't move is that they can afford to stay.
8.30.2009 3:23pm
DavidBernstein (mail):
Ilya,

You forgot the most important factor in reduced mobility: Selling a house costs about 8% of the purchase price, plus, except in a bubble market, you never know how long it will take to sell.
8.30.2009 4:06pm
loki13 (mail):

But these questions are not mere ad hominems Mr. Somin's personal situation in the 1997-2003 period is entirely relevant if he wishes it to be generalizable enough to say that "'voting with your feet' generally benefits the poor more than the relatively affluent - in part because it is much easier for the poor to do it."


Also, if Ilya is like the vast majority of Yale Law students, he has parents in the top 10% of the income distribution who were subsidizing him directly or indirectly. If nothing else, a graduate student who has the bank of Mom 'n Dad as an insurer of last resort has a financial situation very different from that of a "real" poor person.


To build on these two comments:

it is hard to be a trapeeze artist. It is harder to be a trapeeze artist without a net. There is a qualitative difference between those struggling twenty-something post-grads "roughing it" on their own, who know that if something really bad happens they can always get that small loan from mom and dad, vs. the truly poor, who have only themselves to turn to.
8.30.2009 4:25pm
frankcross (mail):
I think it's pretty clear from our internal diasporas that the poor are more likely to vote with their feet than the rich. However, this doesn't mean it is easier. The poor may have an equal or grater cost but a much greater relative benefit. Plus the relative age factor.

I would think it very difficult to generalize about easiness. The "hardness" may well have much to do with family and friendship, which are not clearly associated with wealth. I think the "amount of stuff" possessed is a pretty small element of "hardness" for most people. And the rich can afford a mover, which may make it easier to move lots of stuff than it is for the poor to move less stuff (using only their own manpower).
8.30.2009 5:21pm
dearieme:
In the Social Sciences, usually data is the plural of bollock.
8.30.2009 5:40pm
Dcuser (mail):
Lower COST of doing something is not the same as increased ABILITY to do it.

It is more costly for a physician to insure her BMW than it is for a day laborer to insure his 12 year old Toyota truck. That says nothing at all about the two individuals' relative ability to purchase insurance. To get at that fact, you also need to know the individuals' surplus income.
8.30.2009 5:51pm
Ken Arromdee:
Californians leaving the state are more likely than those who stay to be unemployed, to be less educated, to live in poverty, and to receive public assistance. In contrast, newcomers moving to California tend to have higher incomes and more education and are less likely to live in poverty or receive public assistance.

Clearly that cannot be because poor people are more likely to move, since the rich people moving into the state are also moving.
8.30.2009 5:52pm
Ariadne (mail) (www):
Excellent post, but it has one flaw: Ilya Somin forgot to advance any ways to correct the problem. Thankfully, my ex-husband Mitch - during his run for CA governor - came to this same conclusion and made it one of the planks of his platform. His idea was a tax credit or a direct payment to those above a certain income level that would help them move to another city within CA. The goal was to foster labor mobility by our smartest and most productive citizens, letting them easily move to where the jobs are. Perhaps Somin would be willing to help advance his proposal on a national level.
8.30.2009 6:04pm
Motoguzzi (mail):
This has been my experience as well.
As a single guy with a stereo and a toolbox it was very easy to flee the tax happy New England of my birth to California.
Ten years later, as a married man with quite a bit more furniture, the move to Arizona was a bit more involved, even with the new company paying the expenses.
Now, twenty years down the road, the thought of moving again fills me with the kind of unease usually associated with the Ring of Power.
8.30.2009 6:20pm
Fûz (mail) (www):
"the new jobs that the wealthy get almost always includ[e] moving expenses."

It's not just "wealthy." Having been relocated at employer expense several times, plus 1 move by Uncle Sugar, I presume that this relo is an expense that employers can deduct from income taxes. These moves have cost between $25k and $35k for positions carrying annual salaries of only about 2.5 to 3 times that. Even President Obama doesn't consider that wealthy.

I have to ask: what would happen to Ilya's relative labor mobility hypothesis if, insh'Allah, employers no longer paid corporate income taxes, therefore no longer offered relo?
8.30.2009 6:43pm
EMG:
You have no idea what "poor" really means, and instead of thanking G-d for that fact you hypothesize about how easy it must be. Blech.
8.30.2009 8:31pm
PlugInMonster:

EMG:
You have no idea what "poor" really means, and instead of thanking G-d for that fact you hypothesize about how easy it must be. Blech.


And thus the politics of class warfare continues on and on. Thanks for feeding the fire.
8.30.2009 8:49pm
Joseph Slater (mail):
This thread is beginning to remind me of Pulp's excellent song, "Common People."
8.30.2009 9:03pm
EMG:
"Class warfare"? I wasn't the one who wrote a tendentious, incredible post about how much easier the other half has it.

OTOH, if he really believes that "poor" = "anyone who has somewhat less than I currently have", he's simply not qualified to speak on the subject.
8.30.2009 9:04pm
tvk:
I think you are confusing "young" with "poor". Even rich young people find moving relatively easy, because young people just have less time to accumulate stuff. If you are poor but have 3 kids and lots of accumulated stuff (bought cheaply second-hand), moving is an even bigger hassle than if you are rich and have a house full of stuff. Unlike rich people who can afford to just throw the old stuff away and buy new things at their destination, poor people do not have the replacement option. And moving with 3 kids entails transferring schools, a significant psychic cost. In short, I think you would find this move significantly more of a hassle than moving immediately after graduation even if law professors were paid badly; and your next move will be even worse, even if your salary got halved tomorrow.
8.30.2009 9:55pm
MMJMAC (mail):
The law, in it's majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the street, and to steal bread.
Anatole France

Let them eat cake.
Marie Antoinette

It must be hell to be rich.
8.30.2009 10:14pm
JohnC:
At my office in NYC we have quite a few people who are 200k+ earners. A few are well over 600k-1m. We had been discussing for a long time how to relocate the business. Finally with the latest proposed tax increases we have set up a branch in PA and now 1/2 of the group has relocated.

From our experience at the higher end of the income curve, it is difficult to do, but also, once done is difficult to un-do.
8.30.2009 10:18pm
Fûz (mail) (www):
JohnC: "we have set up a branch in PA and now 1/2 of the group has relocated."

Is it fair to say that it's harder for an employer to induce relocation, than for the employee to move when he so chooses?

The employees didn't want to move, in your case, because they'd be moving away from cultural attractions or a center of their industry?
8.30.2009 11:08pm
Ariadne (mail) (www):
Some of the comments above - especially from my fellow progressives - are more than a bit disturbing. A key part of progressivism is recognizing scientific fact, and it's a scientific fact that Prof. Somin is a valuable member of society.

Not everyone can be the quarterback, but: we're all on the same team. Some of us might be the quarterback, others might be the people at the other positions. I'm sorry, I'm not an expert on these things. Mitch knows about football; he might join us. It's just too bad that California - the supposedly "progressive" state - wasn't ready for a pansexual. Some progressivism. But, what I mean is that we have to be team players and realize that people like Prof. Somin are our "quarterbacks", while others are not.

P.S. If Professor Somin would like to present his treasured POV at my site - in addition to and not as a replacement for this site - drop me a line.
8.30.2009 11:36pm
Perseus (mail):
If you are poor but have 3 kids and lots of accumulated stuff (bought cheaply second-hand), moving is an even bigger hassle than if you are rich and have a house full of stuff. Unlike rich people who can afford to just throw the old stuff away and buy new things at their destination, poor people do not have the replacement option.

But rich people tend to own expensive second-hand furnishings (i.e. antiques) that are difficult to replace, so that option is not going to be as attractive as it may appear.
8.31.2009 4:55am
corneille1640 (mail) (www):
Was Mr. Somin actually "voting" with his feet? Other than seeking economic or other personal opportunities, were there other reasons for his move? Was he fleeing an oppressive state and going to another, more enlightened state? True, a state's policies might affect job opportunities and in that sense, moving to get a job is "voting with one's feet." But otherwise, was he "voting"?

For the record, and in reference to my previous comment yesterday, I'm not saying that the poor don't or can't vote with their feet, and I'm not saying that it can't be a good thing. (I knew a family that traveled a lot looking for work and living in a trailer. It seemed very hard, but apparently it worked for them.) I'm just saying that it can be a lot harder than Mr. Somin's "evidence"--datum, anecdote, or whatever--suggests.

Probably unintentionally, Mr. Somin's example comes across as flip and callous, and to a lot of readers (for example, me) it seems like he's saying: see, a law school professor like me can do it, why can't even poorer people do it?
8.31.2009 8:36am
anonn:
I suspect that Mr. Somin moving from Harvard to Yale to Harvard to Northwestern to Texas to GMU (or whatever it was) as a freshly-minted JD, with the big bucks from two summer associateships behind him, would not then, and does not now, qualify in any sense as "poor." If anything, he was "poor" in the sense that I was "poor" during, say, January to September of the year I graduated law school since my income was "zero." And yet I was living pretty damn comfortably.

The fact that, as a previous commenter says, Mr. Somin "unintentionally . . . comes across as flip" is precisely the problem afflicting many on the right whose policy prescriptions for "poverty" so gravely misunderstand the term as to render the prescriptions pointless.
8.31.2009 8:56am
monboddo (mail):
anonn beat me to the comment. nothing personal against Mr. Somin, but equating his situation in moving between Cambridge and New Haven to that of a person with little/no resources moving cross-country, or believing his situation after earning a Yale JD was analogous to being poor, is just bizarre.
8.31.2009 9:56am
StevenG:
It also seems that Ilya's anecdote undercuts his own argument--presumably his latest move was not a "vote with his feet" (I'm assuming that the move of three miles did not move him into a jurisdiction with more favorable policies). But he did it anyway, incurring the supposedly high costs of doing so, even though he doesn't get the benefits of better policies. Based on this anecdote, the wealthy are indeed more able to vote with their feet, because they are willing to incur the costs of moving even absent any benefit from better policies.
8.31.2009 12:53pm
ShelbyC:

Being poor, however, presents problems in providing credit ratings and in coming up with deposits and/or down payments. Without those, it's easy to move if you're satisfied to live under a bridge or something, but not into a house or apartment.


Do the poor have lower credit scores, other than to the extent that poor financial management is correlated with poverty? Both rich and poor can borrow money and not pay it back.
8.31.2009 1:52pm
EMG:

Do the poor have lower credit scores, other than to the extent that poor financial management is correlated with poverty? Both rich and poor can borrow money and not pay it back.


The poor have lower credit scores because they can't afford to live without using/abusing credit. And there are many ways to damage one's credit score without "borrowing money" as we usually think of it: by not being able to pay one's utilities on time, or medical bills.

I'm sure poor financial management correlates with low intelligence and/or educational attainment, but so does low earning power. I don't think the combination of (1) not being clever enough to stretch limited funds without damaging one's credit, and (2) not being able to earn much money in the first place, equals personal responsibility in a moral sense.

You make it sound as though being poor is a neat trick for screwing creditors. Why don't you try it, and let us know how you do?
8.31.2009 2:09pm
ChrisatOffice (mail):
I have to concur with annon and monbodo. I'm sure IS is a decent person, but when I read this post last night, I just cringed.
8.31.2009 3:34pm
corneille1640 (mail) (www):

Do the poor have lower credit scores, other than to the extent that poor financial management is correlated with poverty? Both rich and poor can borrow money and not pay it back.

I don't know. But "credit checks" for apartments aren't just based on credit scores. They're also (often) based on income, often requiring proof that the rent would take only about c. 1/3 of one's income. These checks also sometimes look at length of employment, not easy to establish if one has just moved somewhere to take a new job. Finally, these checks often look at debt to income ratio, so that even if someone faithfully makes all their payments, they might be deemed less creditworthy.

Now, maybe it can be argued that all these checks redound to the benefit of the would-be renters, so that they don't get over their heads. Still, it makes it difficult.
8.31.2009 3:41pm
sk (mail):
You folks need to learn what science is. It is not anecdotal evidence, nor is it hypothesis unsupported by data, nor is it unsupported assertions.

One piece of data, from the linked-to post.

'...people living in households with an annual income under $15,000 per year are twice as likely to make interstate moves as those in higher income classes..

Barring more, or better, data, it appears that poor do in fact move more frequently than rich.

Anecdote: in graduate school many many years ago, we had a similar discussion-how hard it is for the poor to move country to country. When the obvious factoid arose (poor people do most of the inter-country moving-US immigration history is not the story of mass migrations of doctors, lawyers, and industrialists, after all), it made for an awkward end to the conversation.

Sk
8.31.2009 3:58pm
ShelbyC:
EMG:


You make it sound as though being poor is a neat trick for screwing creditors. Why don't you try it, and let us know how you do?



This paragraph makes absolutely no sense based on my previous comment. Creditors are perfectly able to correlate income of the applicant with risk and charge the appropriate premium. And in any event, given the amounts of money involved I'm sure the rich do way more screwing of creditors.


The poor have lower credit scores because they can't afford to live without using/abusing credit. And there are many ways to damage one's credit score without "borrowing money" as we usually think of it: by not being able to pay one's utilities on time, or medical bills.


It's usually pretty easy to make arrangements to pay medical bills at 0 interest. Folks are pretty well protected along those likes.



I'm sure poor financial management correlates with low intelligence and/or educational attainment, but so does low earning power. I don't think the combination of (1) not being clever enough to stretch limited funds without damaging one's credit, and (2) not being able to earn much money in the first place, equals personal responsibility in a moral sense.


WTF? I have no idea if it correlates with either one of those, and event if it does what does that have to do with anything? Poor financial management almost by definition correlates with poverty because the whole point of financial management is to avoid poverty.
8.31.2009 4:12pm
ShelbyC:

You have no idea what "poor" really means


Income mobility is a neat thing too. It's a pretty safe bet that the majority of folks on this thread have lived in at least 4 of the quintiles of income distribution, maybe 5"
8.31.2009 4:19pm
EMG:

the whole point of financial management is to avoid poverty


No, the point of financial management is to do the best with what you have. It won't do you much good if you don't have enough in the first place.
8.31.2009 5:12pm
EMG:

Barring more, or better, data, it appears that poor do in fact move more frequently than rich.

Anecdote: in graduate school many many years ago, we had a similar discussion-how hard it is for the poor to move country to country. When the obvious factoid arose (poor people do most of the inter-country moving-US immigration history is not the story of mass migrations of doctors, lawyers, and industrialists, after all), it made for an awkward end to the conversation.


They do it even though it's hard, because they don't have much of a choice. Staying put and starving because there's no jobs is even harder, see.

Rich people and poor people have, of necessity, different thresholds for how easy something has to be before they'll do it.
8.31.2009 5:16pm
ShelbyC:

No, the point of financial management is to do the best with what you have. It won't do you much good if you don't have enough in the first place.



Huh. I would of thought it was more important if you don't have much.
8.31.2009 5:22pm
EMG:

I would of thought it was more important if you don't have much.


Oh, it is - to avoid starving. But the upside is very limited. No amount of "management" is going to magically propel an earner of low wages (the kind so low there is nothing left over to save, even with optimal management) into the middle class. Besides, anyone smart enough to pull off such a feat is also smart enough to get a better job.
8.31.2009 5:36pm
CJColucci:

EMG:
You have no idea what "poor" really means, and instead of thanking G-d for that fact you hypothesize about how easy it must be. Blech.



And thus the politics of class warfare continues on and on. Thanks for feeding the fire.

How come the only time it's called "class warfare" is when someone is fighting on the losing side?
8.31.2009 5:38pm
ShelbyC:

Oh, it is - to avoid starving. But the upside is very limited. No amount of "management" is going to magically propel an earner of low wages (the kind so low there is nothing left over to save, even with optimal management) into the middle class.


Don't many poor imigrants engage in that type of management all the time? My Grandparents did at any rate.
8.31.2009 5:40pm
EMG:

Don't many poor imigrants engage in that type of management all the time? My Grandparents did at any rate.


No, for the most part, their wages go up as they learn the language and culture, how to navigate the job market, etc. Same for college graduates who temporarily have to make do with entry-level wages. It's a different matter altogether when you're a native-born adult with limited inherent ability to acquire lucrative skills. That's usually a permanent condition, and no amount of accounting skill can change it. (Certainly not without also incurring debt/damaging one's credit, which is where we started this exchange.)
8.31.2009 6:01pm
ShelbyC:

No, for the most part, their wages go up as they learn the language and culture, how to navigate the job market, etc. Same for college graduates who temporarily have to make do with entry-level wages. It's a different matter altogether when you're a native-born adult with limited inherent ability to acquire lucrative skills.


So it's not because they save money and buy businesses?
8.31.2009 6:11pm
corneille1640 (mail) (www):

'...people living in households with an annual income under $15,000 per year are twice as likely to make interstate moves as those in higher income classes..

Barring more, or better, data, it appears that poor do in fact move more frequently than rich.

I'm not sure exactly what conclusion we're supposed to draw from this (disclosure: I haven't read the hyperlinked post; maybe I should).

However, I will say I have no quarrel with the assertion that the poor move more frequently than do the better off; or at least I'll stipulate to that fact even though I don't know. I'm also willing to accept that maybe in those cases moving is the best decision. And perhaps the US does a better job than most other countries in allowing people to move, or "vote with their feet." I would probably support policies that give the poor more options and make it easier for them to relocate for better circumstances if they so choose.

My quarrel is with the extent to which Mr. Somin overemphasizes how easy it is for the poor to move, or how much easier it is for the poor, vis a vis the more affluent, to move.

(I also have some conceptual quibbles about "voting with one's feet," such as, is there a difference between "voting with their one's feet" and moving for another reason, say, to get a job. Where do we draw the line between the two, and how helpful is the distinction as an analytical construct? But that all is perhaps better saved for another of Mr. Somin's posts.)
8.31.2009 7:10pm
ys:

Salaryman:
Of course, it's not always easier for the poor to "vote with their feet" than the rich, but one reason why it frequently is has, surprisingly to me, not been discussed. My grandfather was, essentially, a dirt poor peasant. He came to this country not speaking the language and having no real family here because he figured -- astutely enough -- that when you're a peasant you're unlikely to get much richer where you are and can't get much poorer elsewhere so you may as well give elsewhere a shot. Living in Southern California, I see a lot of poor Central Americans making exactly the same calculation. I notice very few wealthy Central Americans doing the same (except some affluent Mexicans seeking to escape the violence of the drug cartels).

I would expect similar considerations to apply w/r/t movement between the United States. If you're doing OK where you are, it'll be "harder" to move simply because there's a greater chance that you'll do no better (and maybe worse) elsewhere. If you're really struggling where you are, "elsewhere" may connote opportunity rather than risk.

I wholeheartedly second it. In my own experience moving a much longer distance, the more people that I knew had, the more reluctant they were to get up and go. And not much of a safety net on that trapeze was expected, except knowing that other people had done it.


corneille1640:

My quarrel is with the extent to which Mr. Somin overemphasizes how easy it is for the poor to move, or how much easier it is for the poor, vis a vis the more affluent, to move.

Except it's true as you can see.


EMG:
You have no idea what "poor" really means, and instead of thanking G-d for that fact you hypothesize about how easy it must be. Blech.

I doubt you know it better, unless you were also a stateless penniless refugee in the past.
8.31.2009 7:45pm
corneille1640 (mail) (www):


My quarrel is with the extent to which Mr. Somin overemphasizes how easy it is for the poor to move, or how much easier it is for the poor, vis a vis the more affluent, to move.


Except it's true as you can see.

I don't quite follow what you're saying. At the very least, Mr. Somin's anecdote doesn't prove that it's true. And the statistic cited only proves that the poor move more often than those who are more affluent. It doesn't prove that it's easier for them to do so.
8.31.2009 8:16pm
ohwilleke:
Home ownership does impact mobility as lot, but not primarily as a proxy for wealth and possessions.

If you are upside down on a mortgage, selling a home requires you to negotiate with the lender to sell and insures that you take a ding on your credit rating (and possibly a deficiency judgment) if you move, but if you let it ride the housing market could erase the deficiency over time.

Even if you aren't upside down, the transaction costs in the sale of a home (often 7%-10% including realtor's commissions and costs of sale) are very significant. Usually, they are far greater than moving costs.

In some places (e.g. many resort towns in Colorado) there are transfer taxes on top of that. In California, moving means giving up favored property tax rates at a new home.

Renting the house you want to leave isn't a great option either. In times of falling house prices, rents fall too, making for a certain drain per month with no benefit. Housing prices tend to fall when the need to move for employment reasons is greatest too. Many movers for job reasons don't have the reserves they need to handle even brief tenantless periods either.

If you have bad credit, as many people moving for job reasons do, moving means going from being a home owner to being a renter or from having a prime loan to a subprime loan, because you can't qualify for a new prime rate mortgage. This is a tax hit, a prestige hit, and a dent in the main means by which working class and middle class people accumulate wealth.

Even if you don't have bad credit and are not upside down, reduced equity from transaction costs and reduced real estate prices can mean that your next mortgage will be a low down payment loan, instead of a conventional loan. This can prevent you from getting a mortgage all together, or can cause you to pay for private mortgage insurance on top of interest, increasing your housing expenses.

Moving stuff is a pain in the butt, but it's relatively cheap (and unemployment keeps moving labor costs competitive), even for a lot more stuff. Wealth in forms other than use assets isn't mobility impairing at all, indeed, it makes it more possible to move at all without the restraints that impact typical homeowners. But, home ownership does impact your ability to move with your feet.

The working class (who rent) and the rich (who don't have to borrow to buy homes) are more mobile. It is the middle class (with one house burdened with mortgages and not much in the way of financial assets) who bear the mobility burden of homeownership.
8.31.2009 9:42pm
Econ_Scott:
Huh,

Wait until you have a bunch of kids in Jr. High and High School in "the Bubble" in one of the 5 only "Best Public Schools" in all of California.

Then you're just not mobile, you have a chain and Shackle, a sledgehammer and a pile of rocks.

Signed,

Stuck in California
in the Canyons on the Backside (thank G_d) of Berkeley

PS Get busy with the Mr., have some kids, let them ripen up, you'll be there.
9.1.2009 1:36am
Rich Rostrom (mail):
It isn't wealth that pins one down, it's property. If one owns land, houses, a business - then "voting with your feet" becomes much more costly. That's one reason why some Jews were caught in Europe by the Nazi onslaught.

There are other categories of possession that tie one down: a hereditary title, or a family estate, or military rank, or an academic post. Or an established professional practice. Or family. Or friends. "He travels the fastest who travels alone."
9.2.2009 4:28am

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