When America stopped moving
The country built on restless mobility has become a nation stuck in place, fundamentally altering the character of American capitalism
The numbers tell a stark story. In 2023, only 7.8% of Americans moved to a different residence—the lowest rate since records began in 1948. During the 1950s and 1960s, that figure stood at 20%. America, the country built on restless movement from farm to factory, from declining towns to booming cities, from the circumstances of birth to something better, has largely stopped moving.
This isn't merely a housing market hiccup or a temporary pandemic aftershock. It represents the unwinding of one of America's core economic advantages—the ability of workers to chase opportunity across a continent-sized marketplace. That mobility once distinguished American capitalism from the rigid class structures of Europe and made the country an optimising machine where talent could find its most productive use.
The consequences ripple far beyond individual frustration. When Chang-Tai Hsieh of the University of Chicago examined this transformation, he found that housing constraints alone reduced American GDP by 36% between 1964 and 2009. In simpler terms: the American economy in 2009 was more than one-third smaller than it would have been if workers could still move freely to opportunity. They've accidentally built economic walls between their most productive cities.
The mirage of golden handcuffs
The immediate explanation feels obvious. Homeowners with 3% mortgages won't trade them for 7% rates, creating what economists call "rate lock-in." Brandon and Katherine Righi exemplify this trap. They bought their 1,100-square-foot home in suburban New Jersey in 2017 with a 3.6% mortgage, planning to upgrade as their family grew. Now, with three boys under ten crammed into three bedrooms, they're trapped. A larger home would double their monthly payments.
But this golden handcuffs theory, whilst intuitive, misses the deeper problem. Federal Reserve economists Raven Molloy, Christopher Smith, and Abigail Wozniak have uncovered something more troubling: the primary driver of America's mobility crisis isn't moving costs but the disappearance of economic gains from job switching itself.
Their research reveals that benefits from changing jobs, regardless of geography, have been declining since the 1980s. In the late 1990s, workers switched employers at a rate of 2.8% monthly. Today that rate has fallen to 2.3%. The job ladder that once allowed workers to climb toward better opportunities has been systematically dismantled.
This means even if mortgage rates plummeted tomorrow, the fundamental mobility problem would persist. Workers aren't just financially locked in place—they're economically locked out of advancement.
Cities as gated communities
Perhaps nowhere is America's new rigidity more visible than in its most productive metropolitan areas. San Francisco's median home price exceeds eleven times median income. San Jose reaches twelve times. New York hovers around seven times. These ratios effectively transform America's economic engines into gated communities at metropolitan scale.
The mathematics are brutal but straightforward. A teacher earning $35,000 in struggling Detroit might make $55,000 in San Francisco—but face housing costs that devour the entire increase and demand more. Even software engineers and financial analysts increasingly find the numbers impossible. The result: America's most productive cities operate below capacity whilst workers remain marooned in less dynamic markets.
This represents a profound corruption of how cities historically functioned. Growing metropolitan areas once absorbed workers from declining regions, creating natural shock absorbers for economic change. Today, zoning restrictions, building codes, and neighbourhood opposition have created artificial scarcity in precisely the places where economic clustering could generate the greatest returns.
Hsieh and Enrico Moretti's landmark research quantifies this waste. Their analysis of 220 metropolitan areas found that if workers could freely access high-productivity cities, American GDP would be dramatically larger. They've created a system where productivity gains from economic clustering—what economists call agglomeration effects—are constrained by political choices rather than economic realities.
The two-career trap
Modern mobility faces another constraint that economic models struggle to capture: the rise of dual-income households. When both partners work, geographical mobility requires successfully placing two careers simultaneously in the destination market, roughly squaring the difficulty.
John Jones, an economist at the Richmond Federal Reserve, found that couples where both people work had the lowest interstate mobility rates of any demographic group. This isn't simply about higher household incomes reducing incentives to move. It reflects the coordination challenge of matching two sets of skills, professional networks, and career trajectories to opportunities in a single city.
Craig Allen's situation illustrates this bind perfectly. Laid off from his project management role at a videogame company, he faces geographic constraints his grandfather's generation never encountered. His wife's job requires presence in Maryland. Their daughter has two years of secondary school remaining. Even finding a better opportunity elsewhere would require sacrificing his wife's career and disrupting their child's education. "Moving to another city for a job would be the plan of last resort," he acknowledges.
This dynamic helps explain why geographic mobility is declining even among highly skilled professionals who should theoretically have the most options. The coordination costs have risen whilst the relative benefits have fallen, creating educated immobility.
The crystallising class structure
These forces are crystallising into something resembling a more rigid class structure than America has known for generations. Those who secured good jobs and affordable housing before current constraints became binding find themselves in increasingly privileged positions. New entrants face permanently higher barriers.
Grace Ahn's experience captures this generational divide. The recent graduate works for $22 per hour as a social worker in Orange County, applying to twenty marketing jobs daily whilst tracking rejections in a spreadsheet. Despite cold-calling companies and messaging HR representatives, she remains trapped in work beneath her qualifications. "At first I was so naive, so excited," she reflects. "I was like, the whole world is my oyster. The oyster has now expired."
Her struggle isn't personal failure but structural transformation. Young workers who might historically have moved to opportunity clusters find themselves priced out of dynamic job markets. Simultaneously, they face labour markets where returns to mobility have diminished. The result: a generation geographically and economically constrained in ways that would have shocked their predecessors.
The social implications extend beyond individual economics. Reduced mobility means less mixing between regions, potentially contributing to political polarisation. Local economic shocks—factory closures, industry decline—have more persistent effects when workers cannot easily relocate. Communities that might historically have adjusted through population movement instead face prolonged stagnation.
The price of immobility
America's new rigidity carries measurable costs that compound over time. Research consistently demonstrates that economies with higher labour mobility achieve better resource allocation, higher productivity growth, and more resilient adjustment to economic disruption. The United States historically benefited from all these advantages relative to more geographically constrained economies.
International comparisons reveal what America might be becoming. European labour markets have traditionally featured lower geographic mobility, stronger regional economic differences, and more persistent local unemployment. Whilst European social safety nets provide greater worker security, they also reduce incentives for the mobility that drives economic dynamism.
The irony is striking: America is converging toward European-style rigidity through distinctly American mechanisms. Rather than strong labour protections creating reduced mobility, they have mortgage structures that financially lock people in place, healthcare tied to employment, and zoning laws functioning as immigration controls between cities.
Most concerning is the generational dimension. Older homeowners who bought before recent price increases benefit from both housing wealth appreciation and low mortgage rates locked in for decades. Younger workers face higher housing costs, reduced job mobility, and diminished returns to changing employers. This creates not just economic inequality but inequality of economic opportunity itself.
The path ahead
Policy solutions exist but require unprecedented coordination. Zoning reform could increase housing supply in productive cities. Portable healthcare benefits could reduce job lock-in. Down payment assistance could help younger workers access opportunity markets. Yet each reform faces entrenched opposition from those who benefit from current arrangements.
Meanwhile, each year of continued rigidity makes problems more entrenched and solutions more difficult. The longer America remains stuck in place, the more it resembles the rigid economic structures it once transcended.
What we're witnessing extends beyond cyclical economic adjustment. It represents a fundamental transformation in how American capitalism functions—from a dynamic system characterised by opportunity-seeking mobility toward something more static and stratified. Whether this proves temporary disruption or permanent shift toward European-style economic structures may determine America's competitive position for decades.
The country that once prided itself on movement, on the possibility of reinvention, on the ability to vote with one's feet, has become a nation where feet are increasingly planted. The American dream didn't just become more expensive—it became geographically inaccessible.