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I come from a developing country, and there's one thing I can't understand about Westerners: why is getting fired or laid off such a big deal for many of them? My impression is that many Westerners see getting fired or laid off as a life-changing event.

It's not the case in my country of origin, where employers generally pay you as little as you could get offered elsewhere - that is, they pay you barely enough to keep you from moving to another employer and you are almost willing to go anyway. So, if you get fired or laid off, you just go elsewhere and usually get even a better salary, for it's easier to get a raise by changing jobs than by asking your employer. Anyway, no big deal. You would be seriously worried about losing your job if your employer paid you much more than you could get offered elsewhere, but why would your employer do so, in the first place?

I asked a few German colleagues about the matter, and they said that losing a job and looking for a new job has a huge cost in terms of time, effort, and lost income, but I find it very hard to understand. Why would changing jobs have a huge cost if you are good at what you are doing? Wouldn't many employers be happy to hire you? And if you are not good at what you are doing, how did you get employed, in the first place?

Also, at least theoretically, the cost of changing jobs is already in the equation for your salary. That is, if the cost of changing jobs is huge for you, then your employer has no incentive to pay you much, knowing you won't change jobs anyway. This means that if you work long for one employer, he will end up paying you less than you could get offered elsewhere, by failing to give you promotions you deserve. So, if you get fired or laid off, you should be able to recover the cost of changing jobs by getting a better salary. At least that's how it works in my country of origin.

So, it looks like I am missing something about how things work in the West. What is that?


UPDATE: I am especially curious to read objective statistical data that shed light on the matter. For example, the average cost of changing jobs (as a percentage of the current salary), the average raise you get by changing jobs (as a percentage of the current salary), the average time it takes to find a job, the average time you can live on your savings, etc.

To clarify, my question is about white-collar jobs that require qualifications, but are not top-management positions and are not too specialized. Examples are programmers who use common programming languages and technologies, school teachers, university lecturers, bank clerks, financial analysts, accountants, etc.

I also understand that the West is not uniform, but my impression is that losing a job is a big deal in a vast majority of Western countries. So, I suspect that they have something in common that makes losing a job a big deal, and I want to know what exactly that is.

My own theory is that many Western employers are too generous. That is, they promote their employees as an appreciation of their value for the company and years of service and end up paying them more than they could get offered on the job market. I would especially like to see statistical data that confirm or refute my theory.

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    @wiss13 - In a perfect world, yes - but if you remember the 'Learn to Code' saga of a few years back - people can't magically transition between jobs. Some people have innate capabilities that mean they are particularly well suited to one type of work - but bad at others - if all the jobs that need their skillset go away but all is left are jobs that they are ill-suited to - they are screwed. Jan 30, 2023 at 2:41
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    The West is a large place. Getting fired from a professional job in Germany is a very different proposition to getting fired from a minimum wage job in an at-will state in the US. Jan 30, 2023 at 3:14
  • 4
    Employees that are excellent at their job are rarely fired from their job, some fields are competitive, if I am looking at two equally skilled employees and I know one was fired from their position I might select the other individual that wasn’t. Being fired from a position typically results in different unemployment benefits than simply leaving a position likewise a company downsizing also is different than just simply leaving a company or being fired for cause.
    – Donald
    Jan 30, 2023 at 5:09
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    Developping countries are developping. That is, their economy is growing and new companies and jobs are created all the time, educated workers are on short supply when they are not simply leveraging their degree to go to richer countries. That is why it is so easy to find another job. It used to be this way in the west too in the decades after WWII. People in different economic circumstances will naturally have different outlook and expectations about career and life.
    – armand
    Jan 30, 2023 at 6:30
  • 8
    If you get fired or laid off in the US, you are suddenly without health insurance. This is a REAL problem to be faced with unexpectedly. I'm leaving this as a comment because "The West" includes a lot of places that do not have this problem, but it's worth noting if you're alluding to the Silicon Valley layoffs.
    – ribs2spare
    Jan 31, 2023 at 17:39

10 Answers 10

16

There are 2 important points to take into account:

  1. geographic mobility
  2. bad reference/background

#1 : you lose your job for any reason, you live in a city/county with no or very limited job opportunities. What about the kids/school/house/everyday routine? If you're left with a choice between unemployement benefits (at best) and leaving everything behind you, what do you do? Fear of this is a very heavy weight on your shoulders. Being fired or laid-off is the same in this situation, because your personal wealth is at stake.

#2 : when you have to explain why you were fired, you'll understand why your resume goes straight at the bottom of the "never-call-this-person" pile. It's a big red flag, because you were kicked out for making very important mistakes, something bad enough that a company takes the chance to go to court and loose big money.

As a manager, I'd barely enquire any further: between 2 resume, one fired, one laid-off (economical reason for instance) or looking for new opportunities, I'd pick the second one 95% of the time.

As an employee, I would have feared losing my job if I had to pay for a house and have a family settled down for years in the same place. What about your SO's career, if any? Commuting each day for an hour instead of minutes is a parameter, but moving hundreds of kilometers?

14

Worker protection laws vary wildly between nations "of the west", so since you tagged it , I will answer for Germany.

Both getting fired and getting laid off is hard. For the employer. It is a lot to do, a lot of paperwork to fill out, a lot of legal protections to get around.

That means if someone was fired, they did something really, really wrong. So catastrophically wrong that they were either in court for breaking the law (like physically assaulting someone, or stealing something), or they had a written warning issued to them and still continued with their wrong-doing.

Nobody is going to light heartedly employ that person. Not if they have another candidate. If it took such great pains for the former employer to fire them, and they did it anyway, that must surely be one employee the next company can do without.

Now being laid off carries no such implications. While it is hard for the employer to lay off people, the person being laid off is not to blame. Matter of fact, the part that makes it hard for the employer is that they cannot pick and chose who to keep. In a layoff, people have to be let go in a specific order, called a "Sozialplan". That means you let those people go first, that have the least dependents and are new to the job and young. Reason being that a young well educated person finds another job in a heartbeat, while an older person with a partner and two kids that rely on their income has more responsibilities and should not be burdened as much.

But that has another drawback: if you have to make a plan every time you lay someone off, you don't do it piecemeal. You hold on until it's inevitable and then you lay off a lot of people at once. This way you need to make only one such plan.

However, that means that a lot of people are released to "the market" at the same time. Yes, it is easy to find a job, for yourself, when it's just you looking. No, it is not easy to find a job if the market is flooded with people having the very same skills as you, being about as good as you with the same experience, because you all worked this former job together.


One other thing, and that might not be too objective and just my personal beef with the media: media organisations need to sell. Papers, ads, views, clicks. So if a company closes, it will portray those workers as poor victims. Who will not find another job, because who would employ them if this charitable, well meaning corporate behemoth is no longer there to protect them? Seriously, if you read German papers, you must come to the conclusion that companies that lay off people actually were charities for the incompetent, that only existed to give a mercyful meal to the employed imbeciles and their families. The logical conclusion to those sob stories would really be to shoot the former workers at the exit on their last day, like you would a mortally wounded animal, because they will have no life, nobody will employ them ever again, they will live a horrible life of social benefits, those poor, poor victims. No more charity money for them. So sad.

Because "10.000 poor victims of evil capitalism" sells clicks, ads, papers, views, union memberships, votes in the next election, whatever. "10.000 well educated, experienced workers now up for hire, grab yours now before someone else does" is closer to the truth, but it doesn't sell, so nobody writes it.

The sad part about it is, that we could really lift those people up with the second headline. Instead the media writes them down and belittles them. Doesn't mean it's the truth though. The vast majority will find a job again eventually. But the media does not make that easy, it's not easy to interview for another job with self-esteem and an idea of what you are worth, when it's all over the newspapers that you are a worthless idiot, who will have no chance at another job. Despite the fact that you are not.

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    This answer would be better without the rant in the second half.
    – Philipp
    Jan 30, 2023 at 9:45
  • 3
    +1 for the relevant and useful first half, -2 for the off-topic rant of a second half Jan 30, 2023 at 16:13
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    @user56reinstatemonica8 I can understand that people don't like the part, but I fail to see how it is off-topic. "Why is it a big deal?" "Because Media companies put it on the front page to make money". Is "front page news" and "being a big deal" not basically synonymous?
    – nvoigt
    Jan 30, 2023 at 16:23
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    If you disagree with my writing style, fair enough. To each their own. If you actually disagree with the statements behind it, maybe you can link me a German media article (lets say from the last 20 to 30 years) that ran the second headline instead of the first? Maybe I just don't see them, we all live in our little media bubbles these days.
    – nvoigt
    Jan 30, 2023 at 17:50
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    @nvoigt - disagree with the others, the second part is on-point. You only get Flak when you are over the target. Jan 30, 2023 at 19:07
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I fear this will get closed for Opinion based - but here's the thing:

If you are fired, in the West it takes a continued and determined effort to Fire someone.

Now, I'm not going to argue the pros and cons of employment law and employee protections - Suffice to say that whilst there are crappy employers and companies, there are also crappy workers - and unless it's for an instant dismissal reason, it's really hard to Fire someone. My Wife works in the service industry and has many a tale about workers who were barely competent enough to do the job, but not good enough to be proficient - always needing manager supervision... etc. They might get put on a PIP for a particular issue, they fix that issue, but develop a different issue, so then you have to do a warning for that, then it's something else.

In addition, often with hiring/firing in the West, there is generally an environment of 'Rather Jump than be pushed' - which is, someone who is failing at their current job is likely already looking for alternatives (the writing is on the wall) and so if it comes to crunch time, they are given the opportunity to tender their resignation, rather than be fired.

All of this background means this:

If I'm looking at your resume or CV and I find that you've been fired from a job - there is a 90% chance your resume or CV is going straight in the Bin. It means that at a previous job, you did something so catastrophically bad, that you got fired - and I simply don't want to take the risk.

I say 90%, because sometimes if everything else looks good, I might enquire further - but there's got to be some very good reasons for why.

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    @wiss13 Just another POV. My language doesn't really have a different word between being laid off and being fired, and I would be also confused why it's such a massive issue if not for understanding the difference in English.
    – Alvi15
    Jan 30, 2023 at 2:51
  • 1
    @Alvi15 The same goes for my native language, so I didn't mean to differentiate between getting fired and getting laid off in my question. I have now edited it to include both getting fired and getting laid off. So, my question is about losing a job in general, regardless of the reason
    – wiss13
    Jan 30, 2023 at 3:01
  • 2
    This answer might benefit from a country tag. Different countries might have very different labour laws, job security, etc.
    – Stef
    Feb 2, 2023 at 13:32
  • 1
    To be fair there are often mass firings after company takeovers. They will just "cleanse" the office. Often there are not legal but they just do it anyway and let it go to court where they will usually settle. That's a case where it often doesn't tell you much about the employee.
    – seg
    Feb 5, 2023 at 16:35
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    "In the West it takes a continued and determined effort to fire someone". That is not the case. "In the West except for America it takes a continued and determined effort to fire someone". Feb 8, 2023 at 17:11
9

Being fired or laid off in the US is a big deal. Years ago, I was told that it took a month per $10K of income to find another job. So, someone who was paid a lot could spend many months to find another job. CEOs could go for years between jobs. Thus, being out of work is a large expense. Because of this expense, financial advisors recommend that you keep six months of living expenses in cash so that you can live between jobs.

Secondly, recruiters in the US want to recruit someone who is currently working. It is easier for them to sell someone who has a job than someone who is between jobs. People who are employed are more likely to get a call from a recruiter than those who are looking for work.

Thirdly, the more senior you are, the more you have information that is good only for that company. When switching companies, your knowledge is not as useful and is not worth as much to the new company. Often, when looking for work, the person will do well to learn new skills in order to get a reasonable salary. This adds to the effort after being fired / laid off.

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    Additionally to Joe's comment, why would you be less useful, the more senior you are. That makes little sense.
    – kirbby
    Jan 31, 2023 at 14:13
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    @JoeStrazzere, you are correct that there are places in the country where that is not the case. Other places, it takes longer. In some places, not only will it take time, but the new job will require selling the house and moving.
    – David R
    Jan 31, 2023 at 15:20
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    @kirbby, the more senior, the more likely that the knowledge is unique to a specific company. I have seen a number of people who had been promoted in a company but didn't have the credentials to get that level of job elsewhere. When they were laid off, they had to take less senior positions in the new company. Finally, in IT, once you are over 40, there is a lot of age discrimination. People will hire young developers and skip someone with decades of experience.
    – David R
    Jan 31, 2023 at 15:26
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    @JoeStrazzere, I commend you for how quickly you found work. Five to six months out of work is far more common. People who are older often find it taking longer than that.
    – David R
    Feb 1, 2023 at 1:26
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    +1 This answer is spot on. The more senior you are, the fewer job opportunities (and the longer the organisation can function without filling your role - in the short term a grommet manufacturer needs grommet makers more then it needs strategic leadership). As for the $10k thing, in the UK it's common advice to keep half your annual salary in a rainy day fund if youre in danger of being fired or made redundant. Getting a new job in the USA seems to be faster than in Europe. Feb 1, 2023 at 18:22
7

A large portion of someones identity and status in the west is made up of their job / career. They may have put in extra hours and done what was necessary in order to clime the corporate ladder. To be fired due to re-structuring/outsourcing is a slap in the face.

This may sound like 'first world problems' as it sounds like you are describing problems such as not being paid enough to put food on the table which really puts things into perspective. These problems are of course much more bigger than worrying about a career and so being fired suddenly becomes insignificant.

7

Other people already have mentioned that it is hard to get fired in Germany, so if you do get fired, it's a very bad sign. So there is a culture of you go first, to save face.

So Ill concentrate on they layoff part.

One anecdote about mass lay offs: The first company I worked for, we had a very capable marketing person. My manager said she had a hard time landing a job, I was confused. Right when she finished university, a big company in the city did mass layoffs and a few hundred experienced marketing people flooded the job market. Of course they all found jobs eventually, but having a job eventually is different from right now. Also, it is not guaranteed they got the same pay.

In my last company, some people were let go. Mostly people in their trial period (Probezeit) or with limited contracts (which just werent converted to unlimited ones once the time was over). And a non-IT manager asked me why we IT people are so afraid of being let go, we find a job easily. I told him: That may be right, but our position of negotiation is so much better while we still have a job. If we have no job, the next company might offer us less money for the same work, and doing the calculus we either take it or we have to live with no money. Also, a lot of companies are slow in hiring. Even with medium sized companies, it can take a month or two from writing an application to getting hired. And there are truly slow companies, were it takes over half a year. So if you search from being employed, you can take your time and take the offer you like. But if you are jobless, if have to think hard about how much time you spend looking for a job, or taking one you wouldnt take otherwise. Of course, job hopping is seen as negative, so taking one just in case and switching after 2-3 months will be a negative on your resumee. Not an instant redflag for everybody (but certainly for some), still something you will have to explain. All this leads to good people often jumping ship early, and the not so good people staying behind. The exact opposite of what a company wants. So if you are laid off, it will often be counted against you. Unless you have a story like: The whole branch was closed, no selection involved, no prior warnings.

You might increase your chances by moving to another city. But what happens with friends, family, or maybe the house you bought? Moving a whole family is costly, assumes you earn so much more than your spouse it's actually worth it, and is a huge social burden. Also, buying and selling houses comes with costs nobody is going to reimburse you for. (Granted, not everybody has a house)

This of course focuses on skilled labour. For unskilled labour, they often have a harder time getting an unlimited contract, so they want to keep one if they have one. Also, the competition is harder for them in a lot of regions, because there are more unskilled people than work for them. So these are super keen on not being laid off.

I hope this helps somewhat in understanding why the costs of being laid off are not routinely recuperated by switching jobs.

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    And in the US, whether you are fired or laid off, you usually lose health insurance (or can only get it for a lot of money), so there is that possibly huge expense while you are looking for another job. Jan 30, 2023 at 17:10
  • @thursdaysgeek I have the feeling in the USA because of hire and fire culture it is quicker to line up a new job. but the risks if it doesnt work out are that much bigger, because social security is worse than in most of western Europe.
    – Benjamin
    Jan 30, 2023 at 18:16
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    I don't know. I've been laid off twice, my spouse once, and it took 3-6 months each time to find a new job. We are both professionals. Finding a fast food job, sure, but one in our own profession can take time. Jan 30, 2023 at 19:36
  • @thursdaysgeek I removed the last sentence
    – Benjamin
    Jan 31, 2023 at 8:38
5

Besides the cultural perception of layoffs vs being fired, there is at least one more important factor to consider. Not all positions are equal, and the job market is not necessarily elastic. When wages go down, it is often the most competent workers who leave first, and the idea of "we can get largely the same outcome while paying less" simply does not work.

I work in academia, which exhibits a prime example of this behavior. It is highly competitive, but the wages are low (it is common to be able to find an industry job paying 2x-3x as much right out of the gate). Being (in effect) laid off is extremely stressful: while it might be easy for an employee to find a job paying more for less work, it is very hard to find another job they would be happy with. That is to say, elasticity of this market commonly breaks because a job is not just something you do 9 to 5, clock out, and go on to spend your hard-earned money. I have had gigs which I absolutely refused to take unless they would pay at least 5x my normal rate just because I only have one life to live, and they were not something I was particularly keen on spending it on.

Developed countries have many knowledge workers. For those, every position and every person are different. If one of them quits their job, a replacement easily could stall the work for weeks; worse yet, it can affect multiple people or even teams. So while companies certainly try to push wages lower, there is always a gap between what a person is "worth" on the market and what are they "worth" for a company, the latter is usually higher. Exceptions include unusually elastic markets such as software development, where employees more commonly change jobs and get a substantial raise than they get a raise within the same company.

To sum it up:

  1. Being fired is a cultural red flag, while layoffs or quits are normal.
  2. Finding a new job is stressful, because there are far more factors to the job satisfaction than just how much it pays.
  3. Job market is not elastic, especially with knowledge workers. "Hard to find a replacement employee" and "hard to find a replacement workplace" are often both true at the same time.
4

Where I live, one of the things, especially in government jobs, is that compensation is based mainly on seniority and not how proficient you are at the job. Every year, your compensation automatically gets higher, to a max.

Switching jobs often means starting at the bottom of that ladder again.

2
  • Indeed! Not only the normal salary, but also often the 6th/7th vacation week or things like "parental vacation" (where I am, parents have rights for certain time-off/laid off protection only if they are long enough with their current company.
    – guest
    Feb 5, 2023 at 17:34
  • Where do you live, and does it count as “West”?
    – ojs
    Feb 10, 2023 at 1:53
2

You state you want some sources to help with your understanding, so I'll provide a couple.

Note: both of these seem to be based on data from PYMNTS.com, with survey date ranges that overlap, specifically looking at the United States.

First and foremost, there is still a large demographic of salary earners who live paycheck to paycheck. Source: Lendingtree

More than half of the U.S. adult population — 124 million Americans — is living paycheck to paycheck, according to a new survey from fintech company LendingClub and B2B platform PYMNTS.

The survey shows 22% of those living paycheck to paycheck are struggling to keep up with their bills, with regional differences among Americans who are barely making ends meet.

In fact, 59% of people living in the eight states in the South Central region are living paycheck to paycheck — highest across the U.S. Meanwhile, 49% of people living in the eight states in the Mountain region are doing so — lowest across the U.S. but still substantial.

There are any number of reasons why this could occur, but some that I've experienced personally are:

  • Life-altering circumstances which introduce a large debt or large bill that is needed to be paid
  • Cost-of-living rises which increase the amount that you have to pay for rent, groceries or other amenities
  • Cost of health care which can be super awkward to calculate or recify depending on where you live or how you're covered. Some states rely more on private providers; others on Medicare; some are a hodge-podge in between, and not all of them cover all ailments in similar ways, resulting in out-of-pocket costs for a lot of trips to the doctor's office

Being employed at a job at all helps guarantee:

  • You can at least save something to help deal with those unexpected circumstances. Even if it may not be much or you may not be able to save as quickly as you'd like to, being employed gives you cushion and cover for that. This includes things like 401k or retirement funds, which you're not normally allowed to touch until you're approaching retirement age (67 or so in the States). Note that this is not seen as quite "enough", but this depends on each individual's living circumstance.
  • You can at least absorb some of the cost of living expenses as they come up. People joke about cutting back on the frappucinos or less Netflix, but the more practical thing is to balance rent and commute. Depending on how close you live to things or work, the rent could be higher. The further away you are from city centers, rent tends to be cheaper, with the consequence of a longer commute. Or if you work from home, living in a more rural area could help address that concern, with the consequence of being further from amenities.
  • You can at least pay for trips to the doctor's office, and they might even be covered by your employer. Healthcare - most specifically in the United States - requires someone to pay for it, so depending on your plan, you could either have your employer pay for it or pay a portion of it (copay). You could also contribute to a Health Savings Account of your own to save up cash for medical purposes alone and dip into that at any time to pay for medical expenses, with the consequence of being limited on how much you can put into there in a calendar year, and what qualifies as a medical expense.

Being fired and in-between jobs varies from country to country, but in the States, there's a little thing called unemployment insurance. There are some rough downsides to it as a way to supplement someone looking for work:

  • It's only a fraction of the salary you originally earned
  • Your employer can contest it if your termination wasn't...smooth, shall we say
  • Depending on your state, you have to be actively looking for work and provide proof that you are looking for work in order to receive the next two weeks' benefit ...so the cost of being unemployed and having unemployment benefits means that you're already way behind in terms of earning potential and the ability to afford where you're living.

And yes, it does depend on where you live. But it gets worse - unemployment may not even be able to pay for your rent, let alone anything else.

So, if you get fired, you're basically up that proverbial creek!

Because now, you've lost and must rebuild all of this in a hurry:

  • A savings
  • Health insurance
  • A cushion to deal with life circumstances (and life will always happen)
  • A stable source of income while you're looking for work

...and there is always the risk that not being able to take care of yourself while on unemployment benefits - or living at a friend's house or being somewhere else - feeds into a negative spiral of bad performance and being unable to focus on applying to locations.

Funnily enough, all of this happens before we even talk about interviewing or interview readiness...

1

American here.

  1. Unemployment benefits/payments are often limited in amount and duration. Once your payments run out in 6 months, there is no more. You may have to wait 12 months to ever get unemployment benefits again. Payments are based on some calculation of your last 1-2 years of working, but this rule varies by state also. Back in the 1990s my unemployment benefits were 60% of my salary, this was barely enough for food and rent.
  2. Then you can get on welfare programs but requirements vary a lot by state. Maybe you can get on welfare programs after unemployment runs out, maybe you have to wait another 6 months. Maybe it takes 4 weeks to see a social worker to get on welfare, and another 4-6 weeks to process forms. Now you have no money for 8-10 weeks for food or rent while you wait for forms to be processed. (This actually happened to my family in the 1980s.)
  3. Losing a job is one of the top 3 stressful events in a person's life perhaps because of the culture of independence in the US and low unemployment and welfare payments.
  4. The region (say several adjoining cities where I would be willing to drive) could be poorly run and jobs may be short in that region.
  5. I may not earn more if I drive an hour one-way to work, after I include the cost of gas and my time. For example, if the one-way drive to the office is 1 hour, and I work 8 hours at the office, I calculate my hourly wage based on 10 hour days. That allows me to compare the distance driven and cost of gas for that particular job with other jobs.
  6. Public transport in the US is generally dangerous and not worth the extra medical bills of using it in the US, although in my town it is safe. The authorities either don't have the budget to make public transport safe, or they just don't care.
  7. Moving can be expensive, especially if you are moving a house. Then when you sell your old house you have to pay a sales person's commission of 7-8% or more.
  8. Housing, whether you rent or buy, has gone up a lot in the past 3 years. Rental units are in short supply in nearly every US city and town.
  9. Your employed spouse or partner may not want, or be able to move to another state or city to get another job. The US is a big place.

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