July 19 (Bloomberg) -- Americans, and their companies, have long benefited from their freedom to move throughout our country.
In the 19th century, we moved in search of natural resources, exchanging the stony soil of New England for the rich soil of Iowa. In the 20th century, Americans were more likely to migrate in search of better political environments, like the blacks who fled the Jim Crow states of the South.
The profound role that mobility has played in our country, enabling repeated reinvention, causes me to be deeply worried about the possibility that a National Labor Relations Board complaint will prevent Boeing Co. from moving plane production from Washington state to South Carolina.
I am an economist, not a lawyer, and I have nothing to say about the legal issues surrounding the NLRB’s complaint. I am sure the NLRB is doing what it understands to be its legal duty, preventing retaliation against union activity.
Yet I also dearly hope that the judicial process will affirm the right of companies, and people, to freely choose their locations. The U.S. economy -- especially our challenged manufacturing sector -- needs more, not less, freedom to adapt and innovate.
The story of America is one of constant geographic movement. In 1816, before DeWitt Clinton had dug his ditch, it cost as much to move goods 30 miles over land as it did to ship them across the Atlantic, and Americans remained tethered to the Eastern Seaboard.
Over the course of the next century, we built a great transportation network of canals and rail that made it possible to transport more than just whiskey from Western farms. We left the Atlantic Coast to take advantage of the continent’s riches - - Midwestern land, California gold, Pittsburgh coal, Minnesota iron -- and that migration made us more prosperous.
In 1870, Iowa’s farms were producing 40 bushels of corn per acre, while Maryland farmers were making do with 22 bushels. Frederick Jackson Turner wrote almost 120 years ago that “American history has been in a large degree the history of the colonization of the Great West.”
Turner argued that American institutions were shaped by those who were “crossing a continent” and “winning a wilderness.” Consequently, he said, the closing of the frontier was “the closing of a great historic movement.”
Rise of Cities
But we didn’t stop moving. While 19th century Americans spread out, searching for nature’s bounty, those of the 20th century came together in cities and metropolitan areas, seeking the productive advantages of urban proximity.
East of the Mississippi, population growth was faster in more sparsely populated counties in every decade of the 19th century except for the war-torn 1860s, and it was faster in more populated counties during every decade between 1900 and 1970.
During the past decade, population growth was, on average, negative in the fifth of U.S. counties with the least population density, and more than 12 percent in the most densely populated ones.
The story is a little different for blacks, whose decision to leave the rural South for the northern cities was motivated as much by politics as by economic advancement.
Richard Wright’s novel “Black Boy” eloquently connects migration with freedom: “I headed north full of a hazy notion that life could be lived with dignity, that the personalities of others should not be violated, that men should be able to confront other men without fear or shame, and that if men were lucky in their living on earth they might win some redeeming meaning for their having struggled and suffered here beneath the stars.”
These movements of population also have beneficial consequences for the areas that migrants are leaving. More than 50 years ago, Charles Tiebout started the field of local public finance, and argued that the ability of citizens to “vote with their feet” can induce localities to clean up their act. Robert Margo has provided evidence suggesting that the potential black exodus improved conditions even for blacks who stayed in the Jim Crow South, because white Southern leaders were worried about losing their labor force.
The historian Alan Grimes wrote that Western states instituted female suffrage as “a kind of political bait to lure women from the East.’”
Although pre-World War II industrialization fueled the growth of Midwestern cities, the postwar trend has been toward Southern states with more pro-business policies.
Right to Work
The economist Thomas Holmes examined the effect of right-to-work laws by comparing the growth of manufacturing in neighboring counties on opposite sides of state borders. Between 1947 and 1992, manufacturing grew 23 percent more on the anti-union side of the state line.
Although the movement to pro-business states surely helped keep U.S. manufacturing globally competitive, some analysts argue that the free migration of people and businesses creates a race to the bottom, where local attempts to right social wrongs are undermined by the ability of companies to leave.
There is surely some truth to this view, but the right response to this problem isn’t to limit mobility. We should want our companies to move where they can be most productive. The right response is to address social inequities with national, rather than state or local, policies.
And that takes us back to the NLRB complaint, which alleges that Boeing’s president said he is “moving the 787 Dreamliner work to South Carolina due to ‘strikes happening every three to four years in Puget Sound.’”
Holmes’ work strongly suggests that manufacturing companies have been moving to avoid union power and find lower labor costs for more than 60 years.
Perhaps company presidents should never admit that they consider labor conditions when moving production, but they surely always will and that isn’t a bad thing. When a company moves to a lower-wage state, it is both making itself more competitive and boosting labor demand in a poorer place. Surely, equity enthusiasts should cheer when jobs come to low-income areas.
The U.S. has benefitted enormously from migration. For centuries, people and companies have been free to choose locations that meet their needs. We need our industries to be as nimble and innovative as possible, and we should all worry about any legal precedent that restricts the ability of U.S. manufacturing to compete.
(Edward Glaeser, an economics professor at Harvard University, is a Bloomberg View columnist. He is the author of “Triumph of the City.” The opinions expressed are his own.)
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