One thing that President Obama may touch on in his State of the Union tonight are “promise zones.”
So far, the administration has named five of these zones and intends to name another 15.
These are impoverished areas across the country that have had a particularly hard time recovering from the recession.
The White House intends to direct grant money towards them and also wants Congress to green light additional funds for these areas as well.
In the New York Times this morning, Anne Lowrey focused on one such area in Kentucky where the loss of mining jobs has led to an unemployment rate above 12 per cent and a poverty rate of 26%.
Lowrey talks to Jeff Whitehead, the executive director of the Eastern Kentucky Concentrated Employment Program, who said, “My agency is involved with trying to retrain 8,000 coal miners who have lost their jobs. Unfortunately, one of the more successful things we’re doing is helping them find jobs outside the area.”
Whitehead refers to helping people find jobs elsewhere as “unfortunate” and in terms of reviving the local economy, it is.
But in terms of getting people back to work, it’s exactly what we should do.
The United States is a big country. Local economies and job openings vary widely. The Bureau of Labour Statistics released state unemployment rates today. North Dakota’s unemployment rate was the lowest at 2.6%. Rhode Island’s was the highest at over nine per cent. That’s a big difference.
But moving from Rhode Island to North Dakota (or any location with high unemployment to one with low unemployment) is expensive. For many, moving is also an emotional experience, one that they are hesitant to do especially with high moving expenses.
This is where the federal government could step in and offer relocation assistance to people looking for work to move from areas with high unemployment to areas with low unemployment. If the government wants to target this relief even better, it could offer relocation subsidies to people who have been out of work more than 27 weeks (the long-term unemployed). This would offer some of the most vulnerable Americans an opportunity to relocate to an area with much higher odds of finding employment.
In a way, Obama’s promise zones are already doing this indirectly if money going towards retraining has helped the unemployed find work elsewhere. In Kentucky, this seems to be happening.
But it would be much better to attack this problem directly by offering relocation assistance to the unemployed. Unfortunately, this would require Congressional approval, something unlikely to happen with Republicans adamant not to spend any additional money.
Instead, Obama is left with limited options.
His promise zones are not a bad idea, but they also show the limits of local job markets and the importance of geographic mobility. It’s a shame we aren’t doing more to help the unemployed move.
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