The economic benefit of increased wages is highly localized. 8 in 10 people live within 100 miles of where they grew up and disadvantaged groups are less likely to move for higher wages. In total, 99% of the residents of a given area (i.e. commuter zone) would live there even if there wasn’t strong wage growth.
Why does that matter? Opportunity is tightly coupled with geography. If you live outside of 100 miles from an up and coming city, the benefits won’t reach you. This disproportionately impacts upward mobility of Black, Hispanic, and low-income families.
Read The Radius of Economic Opportunity: Evidence from Migration and Local Labor Markets.
See also:
- Remote work would certainly help more people benefit from wage growth if there is no moving required, however minority job candidates are significantly more worried about being able to work from home
Links to this note
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Outline for my annual essay about things I learned and reflections for the year.
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One of the silver linings of the COVID-19 pandemic is that work and place are decoupling is increasing the radius of economic opportunity. Previously, where you live and where you work were tightly coupled, but with the rise of remote work, more jobs can be done in more places.