Tag Archives: creative class

Portland: the city where the young retire/are underemployed

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Researchers have found that Portland, Oregon is indeed a place where young workers are often underemployed:

Portland may not be “a city where young people go to retire,” but it’s the place they go to be underemployed, a new study found.

A famous quip by Fred Armisen on the television show “Portlandia” led Portland State University researchers to investigate the reality behind the comment. The quirky IFC network series pokes fun at the Oregon city’s many eccentricities.

The researchers’ review found that Portland is a magnet for the young and college educated from across the country, even though a disproportionate share of them are working part-time or holding jobs that don’t require a degree.

In short, young college grads are moving here, and staying, because they like the city’s amenities and culture, not because they’re chasing jobs. Their participation in the labor force tracks with other cities, but they make 84 cents on the dollar when compared to the average of the 50 largest metropolitan areas, the research found.

Not exactly a shining place for the “creative class.” I don’t remember Richard Florida talking much about the employment or economic struggles of the creative class; rather, such cities are often depicted as tech hubs with lots of exciting companies and opportunities. A city may be a cultural magnet but it also has to have enough jobs so that people can stay.

What is most interesting to me about this is that it appears the migration of young adults to Portland has continued in the last few decades even when there are not enough full-time jobs. Is there a threshold point when people will stop going to Portland? At what point do economic realities trump the cultural vibrancy of Portland?

Kotkin: Obama coalition now about urban professionals, not blue collar workers

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Joel Kotkin writes about the shift in the Democratic coalition under President Obama away from blue collar workers and toward urban professionals:

The gentrification of the Democratic Party has gone too far to be reversed in this election. After decades of fighting to win over white working- and middle-class families, Democrats under Obama have set them aside in favor of a new top-bottom coalition dominated by urban professionals—notably academics and members of the media—single women, and childless couples, along with ethnic minorities.

Rather than representing, as Chris Christie and others on the right suggest, the old, corrupt Chicago machine, Obama in fact epitomizes the city’s new political culture, as described by the University of Chicago’s Terry Nichols Clark, that greatly deemphasizes white, largely Catholic working-class voters, the self-employed, and people involved in blue-collar industries…

The traditional machine provided him with critical backing early in his political career, but Obama owes his success to new groups that have taken center stage in the increasingly liberal post-Clinton Democratic party: the urban “creative class” made up mostly of highly-educated professionals, academics, gays, single people, and childless couples. It’s a group Clark once called “the slimmer family.” Such people were barely acknowledged and even mistreated by the old machine; now they are primary players in the “the post-materialistic” party. The only holdovers from the old coalition are ethnic minorities and government workers…

Focused on the “upstairs” part of the new political culture, the administration—confident in minority support—has done very little materially to improve the long-term prospects of those “downstairs.” Minorities, in fact, have done far worse under this administration than virtually any in recent history, including that of the hapless George W. Bush. In 2012, African-American unemployment stands at the highest level in decades; 12 percent of the nation’s population, blacks account for 21 percent of the nation’s jobless. The picture is particularly dire Los Angeles and Las Vegas, where black unemployment is nearly 20%, and Detroit, where’s it’s over 25 percent.

Fascinating. If correct, this could be a boon for the powerful in big cities, people interested in big ideas and big projects and big returns, but not necessarily for those in the struggling neighborhoods. It’s too bad Kotkin doesn’t link this approach to specific policies Obama and the new Democrats have pursued – what exactly does this look like? Have the first four years provided concrete evidence that these Democrats are opposed to the suburbs, as conservatives suggest? On the other hand, we might look at the lack of policies directly aimed at the urban working and lower classes and draw conclusions from that.

I’ve suggested before that Chicago Mayor Rahm Emanuel is a pragmatic kind of Democrat in the mold of Bill Clinton, liberal but clearly pro-business and interested in things like public-private partnerships. If Obama is more interested in the “upstairs” of the Democratic Party, does he approve of Emanuel’s moves and kinds of actions?

Race and gender divides in the creative class

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Another excerpt from Richard Florida’s new book suggests there are race and gender divides in the creative class:

A number of commentators have argued that women are better suited to the kinds of work demanded by the knowledge economy. Indeed, it is true that women make up the slight majority of the creative class, accounting for 52 percent of its members. It’s also true that a greater fraction of employed women hold creative class jobs (37.1 percent) than employed men (32.6 percent).

But Mellander and I found that creative class men earn about 40 percent more than creative class women—$82,009 versus $48,077—a gap of nearly $35,000. Some of this can be explained by differences in work experience, skills, education, and longer work hours. But even when we control for these factors, creative class men still outearn creative class women by a substantial $23,700—nearly 50 percent of the average salary for creative class women…

Race is the source of substantial divides within the creative class. More than eight in ten (80.9 percent) of creative class jobs are held by whites, who make up just 74 percent of the nation’s population. The rest are more or less evenly split among the three remaining racial groups—African Americans (6.8 percent), Hispanics (6.2 percent), and Asians (6.1 percent).

There is an interesting racial division of labor, so to speak, within the three great socioeconomic classes. Asian-Americans are by far the most heavily represented in creative class work. Nearly one-half (47 percent) of them work in creative class jobs, compared to roughly one-third (34 percent) of whites, 24 percent of African-Americans, and 18 percent of Hispanics.

Do I have to buy/read the book to get Florida’s solutions to this issue?

Richard Florida argues “class decides everything”

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In an excerpt from his new book, Richard Florida argues “class decides everything”:

But numerous indicators and metrics suggest that class does structure a great deal of American life. America lags behind many nations – from Denmark to the United Kingdom and Canada – in the ability of its people to achieve significant upward mobility. America’s jobs crisis bears the unmistakable stamp of class. This past spring, for example, the rate of unemployment for people who did not graduate from high school was 13 percent, substantially more than the overall rate of 8.2 percent and more than three times the 3.9 percent rate for college grads. At a time when the unemployment rate for production workers who contribute their physical labor was more than 10 percent, unemployment for professionals, techies and managers who work with their minds had barely broken 4 percent…

As fallible as Marx might have been about some things, his focus on class (not to mention his analysis of the tendency of capitalism to sporadically lurch into crisis) was eerily prescient. Marx was the first to see that class was deeper than income or education, or where different groups of people lived or what they could buy. It stemmed from their relationship to the economy, or as he referred to it, “the social relations of production.” Capitalism had only recently overturned the old feudal order of the agricultural age and replaced it with a distinctive class structure of its own, defined by two principle classes. Marx identified the bourgeoisie or capitalist class as those who owned and controlled the means of production; the proletariat or working class was comprised of those who performed physical labor. The rub, of course, was that members of the working class were only paid for a portion of the economic value they created. The owners’ profits were derived from the workers’ “surplus value” — the value they created but were not compensated for…

Three classes now predominate. In addition to the Working Class, which makes up just one in five workers (down from more than half in the 1950s) are the 40 million plus members of the Creative Class, who use their creativity in their work, roughly a third of the workforce; and the 60 million plus members of the Service Class who prepare and serve food, perform janitorial functions, take care of children and old people, and perform routine clerical and administrative functions. The Service Class accounts for some 47 percent of the work force.

These new class divisions undergird virtually every feature of American life.

I detect some ambivalence here: does class really decide everything or is that the interpretation of the headline writer? Perhaps more importantly, how do the effects of class stack up in (substantive) significance compared to other factors like race, gender, educational attainment, and where people live? This goes back to some older debates in sociology involving scholars like William Julius Wilson: is it really race or class that drives outcomes?

This excerpt also does not make clear all the classes into which Florida would place Americans. Three are mentioned here (service, creative, and working) but they would make up roughly 150 million people (hard to figure exactly from this cited paragraph), leaving out over 150 million Americans. Of course, Florida has some interest in the doings of the creative class so I wonder if his analysis is equally adroit in assessing the other categories.

All that said, I assume sociologists would like that another voice with some clout is reminding people that class matters whether some Americans want to believe it or not. It will be interesting to see, however, how many people buy Florida’s larger analysis and claims or whether they would prefer to stick to the creative class ideas which have proved popular.

Encouraging sprawl or downtown growth

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A recent Canadian conference brought together scholars and practitioners interested in strengthening downtowns. Several of the participants made comments regarding the relationship between a city downtown and the suburbs:

By themselves, speakers warned, studios, galleries and quaint little bistros won’t solve the problems of troubled downtowns. Real solutions will have to overcome public policies that favour urban sprawl and punish core businesses with excessive parking requirements.

Consultant Pamela Blais pointed an accusing finger at municipal development charges that she argues favour suburban “McMansions” over turning downtown buildings into condos.

As one example, she pointed to one Ontario municipality that collects lot levies of $31,000 per parcel regardless of size — that means a house with a 30-foot frontage actually pays more toward the cost of water and sewer mains and parks than a bigger property.

Michael Manville, of Cornell University’s city and regional planning department, argued minimum parking requirements in city centres actually harm development by driving buildings farther apart.

“Most parking policies turn downtown into a sorry imitation of a mall,” he said. “We have to stop this quiet process of turning downtowns into suburbs one parking lot at a time.”

He argued for maximum parking requirements, rather than minimums, a policy he said will make downtown living attractive to people whose lives aren’t centred on their cars.

There are a lot of moving pieces here including big cultural forces favoring suburbs over denser environments (though perhaps not with younger generations). For planners in individual communities, it can be difficult to counter all of this at once.

At the same time, this is not a new issue. Urban (and suburban) downtowns really started to face these issues in the 1950s with the advent of the strip mall and shopping mall. Some of these same issues are reflected in the comments above: what to do about parking? How can a downtown compete against a mall where there are a number of interesting stores within a climate-controlled space? Other communities may not be completely on-board with promoting condos over single-family homes, particularly when condos can be tied to higher densities and bigger buildings which might clash with a community’s character.

One thing I have wondered before: is it always worthwhile for a community to try to revive a downtown? On one hand, a core is a valuable asset as it represents an opportunity to bring people together and to share a common history. Some newer communities have no real core or public space. On the other hand, downtowns can require a lot of revitalization and it can require fighting an uphill battle in some communities to put the kind of money and attention needed to get a downtown up and running again. It is one thing to present people with a thriving downtown that is attractive and exciting (see: downtown Naperville, which can lead to its own issues) but another to ask a lot of people to undergo a 5 to 20 year project to really transform a downtown. Frankly, some people don’t care about having a downtown and see it as a relic of the past – why not just build the newer versions of downtowns: lifestyle centers?

Here seems to be the primary strategies for downtown revitalization these days:

1. Promote mixed-use development, preferably buildings with retail on the first floor and then condos or offices above. This ensures social spaces and residents to use them.

2. Take advantage of transportation advantages such as mass transit. If you can increase density around important rail or subway lines, you can attract more people.

3. Generally aim to attract two sets of residents: younger professionals and creative types (a la the creative class). These groups like the idea of denser, exciting areas and are more willing to try things out. If you need a third group, aim for downshifters and young retirees who are also looking for a new scene.

Kotkin on American population shifts: away from California, into “heartland” growth corridors

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One of the biggest (and unsung) shifts in American life since World War II is the population movement away from the Northeast and Midwest to the Sunbelt, an area stretching from the Southeast over to California. Joel Kotkin suggests some of these trends are changing, particularly an increase in the flow of people out of California:

Nearly four million more people have left the Golden State in the last two decades than have come from other states. This is a sharp reversal from the 1980s, when 100,000 more Americans were settling in California each year than were leaving. According to Mr. Kotkin, most of those leaving are between the ages of 5 and 14 or 34 to 45. In other words, young families…

So if California’s no longer the Golden land of opportunity for middle-class dreamers, what is?

Mr. Kotkin lists four “growth corridors”: the Gulf Coast, the Great Plains, the Intermountain West, and the Southeast. All of these regions have lower costs of living, lower taxes, relatively relaxed regulatory environments, and critical natural resources such as oil and natural gas.

Take Salt Lake City. “Almost all of the major tech companies have moved stuff to Salt Lake City.” That includes Twitter, Adobe, eBay and Oracle.

Then there’s Texas, which is on a mission to steal California’s tech hegemony. Apple just announced that it’s building a $304 million campus and adding 3,600 jobs in Austin. Facebook established operations there last year, and eBay plans to add 1,000 new jobs there too.

Kotkin attributes a lot of this to political and social change in California that is threatening the middle class. I wonder if we could look at this in a more positive light rather simply in the negative light Kotkin, a self-admitted “Truman Democrat,” paints California: these other states and areas may just have competitive advantages that they didn’t used to have. For example, the story behind California’s growth is well-known: gold rushes, available land, the rise of Hollywood in the early 1900s, government help such as the opening of military bases and defense contracts and highway construction, the growing connections between the United States and East Asia (Japan, China, Korea, etc.), and the weather. Places like Texas and Salt Lake City have learned how to compete against these factors and offer a different vision of the “good life” that is now appearing more attractive to residents and corporations.

I also wonder if there is a cultural story here. California was the place to go for decades. It was the land of sun, innovation, and fortune. In other words, it was “the cool place to be.” This same story isn’t as appealing today, particularly to conservatives who think of California as a liberal bastion. I don’t think Salt Lake City will acquire the same kind of cultural allure as Los Angeles but it is appealing to some who are looking for a different American narrative. Additionally, places like Austin and other “creative class” communities (Birmingham, AL as another example) offer enough “cool” without having to go to California.

h/t Instapundit

“Intellectual slums” in China

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China’s economy may be growing but this doesn’t necessarily mean that young engineers have great living standards:

However, life as a Chinese engineer is not necessarily paradise or even a guarantee of decent living. Some of Beijing’s most recent graduates are labeled “ants” for their hardworking attitude but cramped living quarters. Until being relocated by recent redevelopment, many young Chinese engineers lived in small, 20 square-meter rooms in the poor Beijing suburb of Tangjialing. According to Chinese sociologist Lian Si, there are no fewer than 10 “intellectual slums” near Beijing.

Not exactly the choices that we assume the “creative class” has in the United States.

Here are some photographs of a Chinese “intellectual slum” that is slated for a transition from a poor village to new development. In a 2009 story, Lian Si describes his work summarized in the book Ant Tribe.

I became interested in this problem in 2007. I then spent two years researching; I visited seven ‘colonies’ on the outskirts of Beijing, living in them each for some time, and in total, interviewing 600 graduates.

I noted that the graduates earn an average of 1950 Yuan (€200) a month. Most of the time they work on stalls, as waitresses or doing other temporary jobs. The rent costs around 400 Yuan (€40) a month. They spend a lot of time travelling to and from the centre of the city on public transport.

The ‘ants’ have three characteristics in common. They’re graduates, they’re low earners, and they stick together. They’re labelled ants because they’re undersized and have limited living space, but at the same time they’re intelligent and they don’t grumble about their situation.

About 80% of them come from isolated villages cut from the world. They try to make a living in big cities like Beijing. It’s also because of this that they stay in a group, to have the feeling of community and security in their unfamiliar surroundings.

At what point will people in these communities start to grumble?

Reasons young Americans are not buying houses at the same rate as prior younger generations

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Derek Thompson shows that younger Americans are not buying homes at the same rates as previous younger generations:

When older generations wonder what’s the matter with Millennials, they often judge their younger cohorts against such financial and social benchmarks as finding a job, getting married, and buying a home. These observations often come wrapped in weak science — “blame Facebook for their indolence” — or dripping with judgment — “blame their parents for making them weak.” The science is weak, but the observations are true. Fewer young people are finding jobs. Fewer young people are getting married. Fewer young people are buying homes.

Between 1980 and 2000, the share of late-twenty-somethings owning homes had declined from 43% to 38%. The share of early-thirty-something home owners slipped from 61% to 55% in that time. After the boom and bust were over, both rates kept falling. The rate of young people getting their first mortgage between 2009 and 2011 was chopped in half from just 10 years ago, according to a recent study from the Federal Reserve.

The reasons Thompson gives for this decline: rising student debt, lower (delayed?) rates of marriage, limited wages, and housing prices have increased.

Two things that I like about this:

1. Generational talk and “common sense” about the differences is indeed “weak science.” Many people provide anecdotal evidence (my children or students do this, etc.) tied to individual traits (they don’t have the same work ethic, etc.).

2. Because of this “weak science,” we do need to examine how structural forces affect generational behavior. Thompson suggests that broad factors in economics and society have pushed this generation of younger Americans into different actions.

One thing I think is missing here: there seems to be an assumption here that if the economics and social factors were right or similar to the past, this younger generation would buy houses at similar rates. What about the cultural component, the idea that a younger generation of American doesn’t buy into the traditional American Dream in the same way as previous generations? Of course, these structural factors can influence this rejection or adoption of the American Dream: if it is simply more difficult to buy a home at a younger age today, then people might pursue a different vision.

But I think there is growing evidence (see here and here as examples) that this younger generation genuinely values different goals than previous generations and owning a house is just not the same priority. Perhaps they have different values like wanting to be in culturally exciting areas (the creative class thesis). Attaining this and owning a home are not mutually exclusive but most suburbs would not fit this bill. Perhaps they do not desire long-term debt (the common 30 year mortgage) in a rapidly changing world or they want more freedom to be able to move and respond to changes in job markets and cultural and relational shifts. Perhaps they don’t want to have to maintain a home and would rather spend their time elsewhere. Perhaps they explicitly reject the materialistic or consumeristic approach they see in previous generations and instead prize friendships and fulfilling careers. If they do want homes, they want different kinds than in the past (see here and here) and perhaps don’t think many homes reflect their desires.

This is worth paying attention to: will the idea of the American Dream and the need to own a home change dramatically in the years to come because of both structural and cultural shifts?

Argument: land restrictions lead to the American cities with the “most and least affordable housing”

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A new survey names the “most and least affordable housing” markets in the United States. Not too many surprises here. The top ten most affordable markets: Detroit, Atlanta, Phoenix, Cincinnati, Cleveland, Las Vegas, Rochester, Columbus, Kansas City, and Minneapolis-St. Paul. The top ten least affordable markets: San Jose, San Francisco-Oakland, New York, San Diego, Los Angeles, Boston, Seattle, Richmond, Providence, and Portland.

What is particularly interesting is the reason given to explain the differences in affordability:

The authors specifically call out new construction that is significantly controlled by comprehensive plans or through more restrictive land use regulations “referred to as ‘compact development,’ ‘urban consolidation,’ ‘growth management’ and ‘smart growth.’” The thesis is that these places create housing that is unaffordable. And conversely, the places ranked as affordable – Phoenix, Atlanta, Las Vegas – tend to be areas associated with sprawl development.

These two authors are known for their market-based preferences for land use and housing development, so their argument is no surprise. And though there is certainly a case to be made that restrictive land use policies can limit supply and drive up costs, these aren’t the only factors in play. That New York City is less affordable than its upstate neighbor Rochester has more to do with the fact that it is a much more vibrant and attractive city, and that people are willing to pay more to live that lifestyle than people who prefer Rochester living. Taking this and other factors into account would expand the understanding of why some places are less affordable than others. And while the picture painted by Cox and Pavletich is not wrong, per se, its limited scope offers a less-than-comprehensive analysis that could benefit from more context.

This sounds like an argument from the urban ecology school that argued sprawl could be explained by a search for cheaper land. If governments or other agencies restrict the amount of land available for development, then prices will have to go up.

This explanation also seems to suggest that the affordability sprawl allows should be a primary goal. Of course, sprawl comes with other problems including increased costs, longer commutes, more environmental concerns, and a loss of space that could have been used for other purposes or left open. If the affordability of a home was the only thing that mattered for public policy, policies would be quite different. But when doing urban and regional planning, there are a number of other concerns that must be taken into consideration.

Also: I’ve always wondered why lists of affordable or unaffordable places don’t try to overlay other data on the prices. At a quick glance, it looks like the more affordable places tend to be in the Rust Belt, the South, and foreclosure centers while the more expensive places are on the coasts. Some other factors that may matter: perhaps “creative class” cities more expensive on the whole, even controlling for other factors; demographics; the particular industries and companies located in each place; where cultural centers are located; the historical context.

Shifting resources away from the “fringe suburb[s]”

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In an op-ed in the New York Times, an academic argues that “fringe suburb[s]” are dying and we should shift resources to communities that need reinvestment:

Simply put, there has been a profound structural shift — a reversal of what took place in the 1950s, when drivable suburbs boomed and flourished as center cities emptied and withered.

The shift is durable and lasting because of a major demographic event: the convergence of the two largest generations in American history, the baby boomers (born between 1946 and 1964) and the millennials (born between 1979 and 1996), which today represent half of the total population…

Over all, only 12 percent of future homebuyers want the drivable suburban-fringe houses that are in such oversupply, according to the Realtors survey. This lack of demand all but guarantees continued price declines. Boomers selling their fringe housing will only add to the glut. Nothing the federal government can do will reverse this…

For too long, we over-invested in the wrong places. Those retail centers and subdivisions will never be worth what they cost to build. We have to stop throwing good money after bad. It is time to instead build what the market wants: mixed-income, walkable cities and suburbs that will support the knowledge economy, promote environmental sustainability and create jobs.

This is not an unusual argument. Based on survey data, a number of commentators have suggested that the demand for the sprawling suburbs will shrink and builders and governments should get ahead of this shift. The suburban critiques delivered by academics and others since the post-World War II suburban boom may have finally gained some traction as the young and old seek out community over a big, cheap house. How much of this shift will be “durable and lasting” remains to be seen but it would certainly be helped if “the market” goes in this direction.

Two claims in the final sentence of this op-ed are intriguing. The argument that density = greener neighborhoods is common but the arguments about benefits for the knowledge economy and creating jobs is less common. A little more about each of these:

1. I assume the knowledge economy bit is tied to ideas like “the creative class” from Richard Florida. Younger adults, in particular, want to live in places with some culture and neighborhood life, not on the metropolitan fringe in bland neighborhoods. These places become centers of innovation and culture, attracting more residents and businesses.

2. The jobs claim is a bit less clear to me. If money was spent redeveloping older neighborhoods, this could create jobs – but so could building new balloon-frame homes in new subdivisions. Perhaps the creative cities will create so much innovation that this leads to job growth? Does Richard Florida have data that shows a link between the creative class and job expansion overall?

Overall, this is another voice calling for a new urban strategy where the government and businesses stop subsidizing sprawl and start providing money to promote denser, more New Urbanist type developments that some Americans desire.