Government fees break the job allocation process

Job reallocation is an important determinant of productivity. This column uses US data to show that a decline in the degree of job reallocation in response to shocks is behind the overall fall in the rate of reallocation over the past decades. Weakening responsiveness became a drag on aggregate productivity for high-tech businesses in the 2000s, but in other sectors the problem dates back to the 1980s. 

Like, duh.  Wage settings are heavily compressed with little elasticity for a simple reason, government fees.  We have to move an entire factory from Illinois to Texas to reallocate jobs, and even then the federales will tax the hell out of labor.  

So we are all on sanctions, to a bit.  We are sanctioned to cover the changes in entitlement fees whenever we change jobs, and the opportunity to make a gain from a new job is fading fast.

How it works

A job change results in entitlement fees that may be 10% higher than you pay now. So no job change unless the new salary clearly covers the extra government fees. We get a huge group of minimum wage workers forever stuck, like Italy forever paying 2.5 percent of GDP to Germany, the deal won't fly.