Monday, September 20, 2010

Great Recession Migration: New Patterns Emerge

Geographic immobility seems to be the most important legacy of the last recession. Some new migration winners have emerged (e.g. Des Moines). But people are having a hard time figuring out to move where the jobs are. One solution is extreme commuting:

Gary Caillouette wears his Detroit Tigers cap on flights to and from Washington, D.C., to draw Michiganders to his side to talk baseball.

He isn't starving for social interaction, but takes comfort knowing he's not the only Michigan husband and father who is working in another state to support his family back home.

When he flies home, he said it seems like there are flights to Detroit every hour, on the hour, filled with people working in the D.C. area and flying home to see their families on weekends. ...

... Gary Caillouette's company is expanding, but nowhere near Michigan. In fact, representatives from his company fly to Michigan every six weeks to recruit more skilled tradesman.

That jibes with the Michigan's jobs economy, said William Sleight, director of Livingston County Michigan Works!

The trend of Michiganders forced to find work out of state in order to support their families at home is becoming more common, Sleight said.

He said many in that situation are highly skilled and take that knowledge base out of Michigan with them. Sleight said many are in the building trades — an industry that has all but dried up in Michigan.

Caillouette's commute suggests that the outmigration from Michigan isn't as bad as it would have been in past recessions. Planes are filled with workers stuck in place. I think that's good news for Michigan, which can still access the skilled workforce once economic situation improves.

The story also speaks to the structural nature of unemployment, how talent and jobs are struggling to match up in the same location. I expect the skill trades to mirror the itinerant energy labor market. Back to Cailouette's migration:

While there are no data indicating how often families make the same sacrifice Gary Caillouette does, an increasing number of Michiganders are abandoning their job search in Michigan and landing jobs elsewhere, experts said.

His wife and two sons live back home in Livingston County, and he commutes three weekends per month to see them. In the process, he spends $700 to $1,000 each month on travel alone.

Gary Caillouette, 42, lives in a two-bedroom apartment in northern Virginia with two other men. His two roommates are also native Michiganders whom he encouraged to take jobs in Virginia.

Gas workers started arriving in the area as early as January 2009. Their numbers have increased so much so that several places that previously only filled up on Penn State football weekends now report they’re regularly booked up once or twice a week.

Front desk clerks tell stories of groups of 40 to 50 employees from companies such as U.S. Energy, Superior Well Services and Halliburton arriving unannounced in the middle of the night and staying for months at a time. Those same clerks also tell of groups of 60 or more planning on staying five weeks and leaving unexpectedly after five days.

The gas rush hasn’t yet completely overrun the county’s hotels, as it has in the state’s northern tier, where more drilling has taken place.

So far, hotels nearest the sites of ongoing drilling — which is occurring mostly in Rush, Boggs, Snow Shoe and Burnside townships — are benefiting the most, though some hotels in State College have also seen some gas worker traffic.

A number of hotels in State College and the eastern part of the county haven’t seen any gas workers stay with them — yet. But many local hoteliers said they think that will change in coming years as more wells are drilled in the county, and are eager for increased Marcellus Shale action to hit the area.

Obviously, most of the workers involved in drilling the wells are coming from out of state, not Pennsylvania. Michigan should study the talent flow and look into how the state might help its displaced workers better manage the long distance commute, maintaining their current homes. An out-of-state job tax credit would be clever. Better that than losing all the revenue from a family that has to move to DC in order to survive.

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