Older workers left behind when companies move back to the city?

As some companies choose to return to the big city, are older workers left behind?

After decades of big businesses leaving the city for the suburbs, U.S. firms have begun a new era of corporate urbanism. Nearly 200 Fortune 500 companies are currently headquartered in the top 50 cities. Many others are staying put in the suburbs but opening high-profile satellite offices in nearby cities, sometimes aided by tax breaks and a recession that tempered downtown rents. And upstart companies are following suit, according to urban planners. The bottom line: companies are under pressure to establish an urban presence that projects an image of dynamism and innovation…

For longtime employees, however, corporate moves to the city mean longer commutes and disrupted schedules and family life. And the corporate quest for youth and innovation can leave some workers feeling slightly unwelcome.

“We joked about the older suburbanites being excluded from the new [business] model,” said Jon Scherf, age 42, a marketing professional who left Hillshire shortly before its December 2012 move to downtown Chicago. “They would’ve been happy to have me but they’re also happy to bring in new blood.”…

For longtime employees, it has been a more complicated switch. Melissa Napier, treasurer and senior VP of investor relations at Hillshire, bought a house in Downers Grove in 2007 and lives there with her husband and two sons. While she now attends more social and networking events downtown, her commute, once a 10-minute drive, now gets her home at 7:30, an hour later than before…

But the employers that sought them out in the city are unlikely to follow them back to the suburbs, said Mr. Phillips of the Urban Land Institute.

Now that I think about it, I don’t remember Richard Florida, known for analyzing the young creative class that wants urban amenities, discussing the possible impact on older workers. I suppose the argument could be made that attracting young workers, wherever they might work, would help raise all boats. But, as long as the perception continues that suburbs are better places for raising families due to their schools and safer spaces, this divide between younger/urban workers and older/suburban workers may continue.

Is a bohemian lifestyle still possible in New York City?

Given the high cost of living and the other changes in society, can residents live as bohemians in New York City?

Is it still possible to be a bohemian in today’s New York City, where average rents now surpass $3,000 a month? Or are the rents just too damn high? And — if they are — what does this mean for the future of artists and intellectuals of the sort who have long been as much a part of the natural order of the city as pigeons and locust trees?

These are some of the questions provoked by an article in the Spring issue of N+1 magazine on “Cultural Revolution” signed by “The Editors.” There’s far too much Trotsky in the piece for my taste, but it does raise some interesting points about the arts and the way we think about social class. The piece is the latest item in a long New York tradition of articles describing the status anxiety and actual difficulties of people with top-shelf educations who are among the minority of their college classmates to take on risky individual creative ventures that are not particularly remunerative…

I’m not saying any of this is good, only that it is hardly new. This great New York Times piece on Gabby Hoffman growing up in the Chelsea Hotel illustrates perfectly the great class disruption of life in bohemia, where high culture meets low incomes.

Of her childhood, Hoffmann says now: “We lived in a classless society. We’d spend a summer at Gore Vidal’s house in Italy, but we were on and off welfare” when she was a baby.

Or read Patti Smith’s Just Kids. God was she poor when she came to the city. “New York has closed itself off to the young and struggling,” Smith told the New York Observer in 2010. “New York City has been taken away from you … So my advice is: Find a new city.” Her recommendation then is now back in the news: Detroit.

I wonder what Richard Florida would say about this. While he pushes a sort of modern bohemia idea through his concept of the creative class, that group is not lower-class in the same ways as bohemians. They may be creative types but they are primarily white-collar workers with means who have found ways to translate their creative expression into a certain professional lifestyle.

This could be extended to a broader question: is there much room in most global cities for those with less means, whether they are bohemians or immigrants or lower-class? And then going further, if there is some room for them, how much can they really participate in city life and influence decisions that affect them and the entire city?

Silicon Valley to eventually lose out to cities?

An urbanist argues that Silicon Valley will die out because workers want to be in cities:

Why is Silicon Valley in Silicon Valley?

“You’ve got Stanford, you’ve got federal expenditures, and you’ve got an ecosystem” of start-up mentors and established institutions, said Bruce Katz, the founding director of the Brookings Metropolitan Policy Program. But Silicon Valley’s stranglehold on West Coast innovation is in danger, he said at the Aspen Ideas Festival on Friday. The main problem?

It’s no fun to live in Silicon Valley.

“What’s happening now is workers want to be in Oakland and San Francisco,” he told Walter Isaacson. Young workers want to live in a city — somewhere they can ride bikes, shop locally, walk to their favorite restaurants and bars, and live in a dense urban or urban-lite environment with nearby amenities. But Silicon Valley isn’t like a city. It’s like a suburb. “Silicon Valley is going to have to urbanize,” Katz said. “[There is a] migration out of Silicon Valley to places where people really want to live.”

This sounds like Richard Florida’s arguments about the creative class: a younger generation of educated workers want to be in thriving urban environments. However, I’m not sure Katz’s arguments are consistent – at least as presented in this article. He suggests that groups of politicians and business leaders help create certain environments. Hence, an area like Silicon Valley exists because there was a concentration of investment and infrastructure. Yet, Florida’s argument emphasizes more the individual desires of the creative class (or perhaps some sort of class consciousness). If Silicon Valley was indeed losing workers to cities (not just the Bay Area but places like Austin or Chicago or Manhattan), it could respond by creating more urban environments. This is a popular idea these days in more suburban settings: retrofit older developments like strip malls, shopping centers, office parks, and tract home developments into something denser and mixed use. Young workers may want a certain kind of environment but business leaders and politicians can help create and develop such areas, whether in Silicon Valley or somewhere else.

Another interpretation of Katz’s arguments is that corporate efforts to build all-inclusive work campuses (like with Facebook recently building a Main Street) just isn’t as appealing as the more “authentic” urban life.

Smart Midwesterners flock to Chicago?

An excerpt from a new book about the Rust Belt looks at why Chicago attracts so many educated Midwesterners:

The North Side of Chicago is such a refuge for young economic migrants from my home state that its nickname is “Michago.” In 2000, a quarter of Michigan State University graduates left the state. By 2010, half were leaving, and the city with the most recent graduates was not East Lansing or Detroit but Chicago. Michigan’s universities once educated auto executives, engineers, and governors. Now their main purpose is giving Michigan’s brightest young people the credentials they need to get the hell out of the state.

In the 2000s, Michigan dropped from 30th to 35th in percentage of college graduates. Chicago is the drain into which the brains of the Middle West disappear. Moving there is not even an aspiration for ambitious Michiganders. It’s the accepted endpoint of one’s educational progression: grade school, middle school, high school, college, Chicago. Once, in a Lansing bookstore, I heard a clerk say with a sigh, “We’re all going to end up in Chicago.” An Iowa governor once traveled to Chicago just to beg his state’s young people to come home…

As Chicago transformed itself from a city of factories to a global financial nexus, its class structure was transformed in exactly the way globalization’s enemies had predicted. “Many Chicagoans live better than ever, in safe housing in vibrant neighborhoods, surrounded by art and restaurants, with good public transport whisking them to exciting jobs in a dazzling city center that teems with visitors and workers from around the world,” wrote Richard C. Longworth in Caught in the Middle, his 2008 book on the modern Midwest. “And many Chicagoans live worse than ever.

I look forward to reading the more complete argument. This excerpt suggests the changes that have made certain Chicago locations so attractive, places like the Loop, Lincoln Park, Wicker Park, Bucktown, etc., come at a cost as other areas of Chicago have seen little improvement.

This also seems related to the ideas of Richard Florida and the creative class. Florida tends to rank all US cities on his creative scale indexes. Could there be regional creative class cities? Chicago isn’t at the top of Florida’s rankings but it might attract a sizable number of the Midwest creative class. A city doesn’t necessarily have to attract the creative class from throughout the United States to experience some of their influence.

It would be helpful to see data on this. Who exactly is moving to Chicago? For example, looking at a place like Michigan, where do college graduates and other young adults go if they leave the state? Or, looking at the Chicago area itself, do they tend to stay in the metropolitan area at similar rates to other major cities like New York City, Los Angeles, Dallas, Philadelphia, and others (and there could be very different patterns going on in each of these major cities)?

Correlations that get at why big cities lean toward Democrats

Richard Florida discusses several reasons, based on correlations, why big cities now so clearly lean toward the Democratic party:

Density played a key role in the metro vote. (To capture it we use a measure we of population-based density, which accounts for the concentration of people in metro). The average Obama metro was more than twice as dense as the average Romney metro, 412 versus 193 people per square mile. With a correlation of .50, density was an even bigger factor than population (where the correlation is .34). The reverse pattern holds for the share of Romney votes; the negative correlation for density (-.51) was significantly higher than that for population (-.33)…

The chart below plots the relationship between a metro’s share of college grads and its share of Obama votes. The line slopes steeply upward showing how the share of Obama votes increase alongside metro density. The share of college grads in a metro is positively correlated with the share of Obama votes (.42) and negatively with the share of Romney votes (-.44)…

The chart above shows the relationship between the share of the creative class and the share of Obama votes across metro areas. The line slopes steeply upward, indicating a considerable positive relationship. The share of creative class workers is positively correlated with the share of Obama votes (.40) and negatively with the share of Romney votes (-.41)…

Republicans may still be the party of the rich, but most of the country’s more-affluent metros lined up squarely in the Obama camp. The correlation between the average wages and salaries of metros and the share of Obama votes is positive (.50) and it is negative for Romney votes (-.51). This makes sense too, as larger metros have greater concentrations of knowledge-based talent and industries and are wealthier to begin with. (The associations we find are even more substantial for metros with more than one million people, with the correlations increasing to .71 for Obama and -.72 for Romney.) This follows the “Red State, Blue State, Rich State, Poor State” pattern identified by Andrew Gelman of Columbia University, who infamously found that while rich voters continue to trend Republican, rich states trend Democratic.

Florida argues this is evidence of class-based differences in American life, specifically, differences between the creative class and those in knowledge industries compared to the rest of the United States.

However, this raises a few questions:

1. The analysis here seems to be done across metropolitan areas while some of these voting patterns break down as we compare cities versus suburbs. For example, there are those who suggest it is really about cities and inner-ring suburbs that vote Democratic while more further flung suburbs and exurbs vote Republican. See earlier posts about the analysis of Joel Kotkin – here and here.

2. Making claims with correlations with tricky. Florida acknowledges this before he rolls out the analysis: “As usual, I point out that correlation points to associations between variables only, not causation.” But, then why stop the analysis at correlations here? Looking at the relationships just between two variables at a time ignores the complex relationships between factors like race, class, location, jobs, and more. Why not quickly run some regressions?

3. If this analysis is correct (and we need more in-depth analysis to check), why are Republicans so bad at appealing to the creative class?

Richard Florida argues “class decides everything”

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.

Richard Florida: homeownership not related to economic growth and development

Richard Florida looks at some data and argues that homeownership is not related to several dimensions of economic growth and development:

The economic growth and development of cities and regions is generally thought to be driven by three key factors: innovation, human capital, and productivity. Homeownership, it turns out, is not related to any of them.

Take innovation and high-tech industry. Homeownership bears little relation to either, being weakly negatively associated with the concentration of high-tech industry (-.20) and not associated at all with innovation (measured as the rate of patenting).

Or consider the percentage of college graduates or share of highly-skilled knowledge/creative jobs. Again, nothing. The arrow in fact points in the wrong direction. Homeownership is weakly negatively correlated with both the share of college grads (-.27), and with the creative class share of the labor force (-.30).

What about productivity? Once again, no connection to homeownership. Homeownership is weakly negatively associated with economic output per capita (-.19)…

It used to be that homeownership signaled and led to economic growth. But that relationship was tied to the industrial era, when building and buying more homes primed the pump of America’s great assembly-lines, increasing demand for cars, appliances, televisions, and all manner of consumer durables. Those days are gone. The United States is a now knowledge and service economy; less than ten percent of Americans work in some form of manufacturing and just 6.5 percent are engaged in actually producing things. The stuff Americans buy is largely made offshore.

I wonder how this relates to the recent campaign from the National Association of Realtors regarding how building homes would lead to more jobs. While having more construction might lead to some good short-term outcomes, Florida is arguing here that homeownership doesn’t have a large influence on the economy.

Going beyond the economic impact of homeownership and building homes, these statistics don’t quite capture the cultural influence of homeownership in American culture. At the same time, the numbers might suggest that policymakers shouldn’t go all in for promoting homeownership for its economic benefits. Selling homeownership can be done by linking it to values of individualism or the American Dream but the larger economic angle doesn’t hold up.

I wonder what the story would be utilizing data that allow analysis beyond correlations…

David Brooks, “Boo-boos in Paradise,” and American public intellectuals

I like David Brooks’ pop sociology analysis of the suburbs in Bobos in Paradise but a piece in Philadelphia suggests Brooks got some of his facts wrong:

Brooks, an agile and engaging writer, was doing what he does best, bringing sweeping social movements to life by zeroing in on what Tom Wolfe called “status detail,” those telling symbols — the Weber Grill, the open-toed sandals with advanced polymer soles — that immediately fix a person in place, time and class. Through his articles, a best-selling book, and now a twice-a-week column in what is arguably journalism’s most prized locale, the New York Times op-ed page, Brooks has become a must-read, charming us into seeing events in the news through his worldview.

There’s just one problem: Many of his generalizations are false. According to Amazon.com sales data, one of Goodwin’s strongest markets has been deep-Red McAllen, Texas. That’s probably not, however, QVC country. “I would guess our audience would skew toward Blue areas of the country,” says Doug Rose, the network’s vice president of merchandising and brand development. “Generally our audience is female suburban baby boomers, and our business skews towards affluent areas.” Rose’s standard PowerPoint presentation of the QVC brand includes a map of one zip code — Beverly Hills, 90210 — covered in little red dots that each represent one QVC customer address, to debunk “the myth that they’re all little old ladies in trailer parks eating bonbons all day.”

But this isn’t the main complaint of this arguement: rather, the main problem is that Brooks is considered a public intellectual and his words have a lot of weight:

On the publication of Bobos, New York Times critic Walter Goodman lumped Brooks with William H. Whyte Jr., author of The Organization Man, and David Riesman, who wrote The Lonely Crowd, as a practitioner of “sociological journalism.” (In the introduction to Bobos, Brooks invoked Whyte — plus Jane Jacobs and John Kenneth Galbraith — as predecessors.) In 2001, the New School for Social Research, in Manhattan, held a panel discussion in which real-life scholars pondered the bobo. When, in 2001, Richard Posner ranked the 100 highest-profile public intellectuals, Brooks came in 85th, just behind Marshall McLuhan at 82nd, and ahead of Garry Wills, Isaiah Berlin and Margaret Mead.

Ironically, Richard Florida is granted the final academic say regarding needing more serious public intellectuals:

Richard Florida, a Carnegie Mellon demographer whose 2002 book The Rise of the Creative Class earned Bobos-like mainstream cachet, nostalgizes an era when readers looked to academia for such insights:

“You had Holly Whyte, who got Jane Jacobs started, Daniel Bell, David Riesman, Galbraith. This is what we’re missing; this is a gap,” Florida says. “Now you have David Brooks as your sociologist, and Al Franken and Michael Moore as your political scientists. Where is the serious public intellectualism of a previous era? It’s the failure of social science to be relevant enough to do it.”

Here is what I take away from this: this writer is worried that Brooks (and other New Journalists) are influencing public opinion and possibly public policy more through impressionistic writing than facts and correctly interpreting data.

This could make for an interesting discussion involving things like the role of columnists and opinion-makers (facts or zeitgeists?), why social scientists and sociologists aren’t seen as public intellectuals, and who should guide public policy anyway. It is interesting to note that the American Sociological Association (ASA) gave David Brooks the Excellence in Reporting of Social Issues Award in 2011. I assume the ASA didn’t just give the award because Brooks discusses sociological research or is of the same political/social persuasion as sociologists.

By the way, having read a lot of David Brooks and Tom Wolfe, I wonder how many commentators would suggest these two are engaging in similar techniques.

Comparing the economies of US cities to countries

A little fun information: New York’s GDP is similar to Canada, Los Angeles’ GDP is similar to the Netherlands, and Chicago’s GDP is similar to Switzerland.

This is a reminder that US cities/metropolitan regions are economic powerhouses.

h/t Instapundit

The financial benefits of not living in sprawl

Richard Florida argues “The neighborhood you live in can have a huge effect on your ability to spend or save, do the kind of things you really want to, and navigate the ongoing economic crisis.” Cars are indicted here as they require large sums of money to maintain and operate.

Based on this data, Florida argues that we need to rethink what we promote:

There remain some pundits and politicians who continue to believe that we need to get housing back to its former levels. But that won’t work this time. The old Fordist housing-auto-energy economic model which helped bring on the crisis in the first place has reached its sell-by date. Our continued commitment to (and massive subsidizing of) it will only further erode the financial situation of middle-class and working families and hold back the recovery.

It’s becoming increasingly apparent that the typical tools of monetary and fiscal policy are proving insufficient to sustain the recovery. Our future prosperity requires that we to begin to shift precious resources from houses, cars and energy toward investments in new skills, technologies, and industries that can generate higher paying jobs and improve overall living standards.  And that in turn requires a new geography built around denser (more innovative and productive), more walkable, transit-oriented (more efficient) communities.

If American families and policy-makers don’t see being green or sustainable as reason enough to change the way we live, perhaps seeing the very tangible financial rewards that accrue to those who do will help them change their minds. As the poet wrote, “You must change your life.” The numbers speak for themselves.

In addition to being more green, Florida is making the pragmatic argument that denser, more walkable communities actually help improve the financial situations of residents.

This may be compelling evidence – Americans can be persuaded by financial incentives – but I still think it is an uphill climb against an American culture that prize cars, driving, and the freedom that it represents. Changing this mindset is difficult even with at least 38 years of evidence that gasoline will not always be cheap or plentiful, evidence that suggests long commutes harm relationships, and research showing people aren’t necessarily happy in the suburbs. People are willing to trade a lot for the vision of the dream of the single-family home in the suburbs.

What would help is an alternative, positive vision that would celebrate denser neighborhoods and more urban life. Rather than simply attack the suburbs, sprawl, and McMansions, how about images of more urban life that can combine the best of both city and suburban life? The narratives regarding denser lives tend to be about chaos and a lack of control – think of the recent stories of “flash mobs” and “wilding” in Chicago. This could change with younger generations as they grow up with different aspirations and values. As Florida has argued, younger people are attracted by more exciting urban areas and they have the potential to change social patterns as well as promote new types of policies. But this vision needs to include family life, not just 20-something or single life, in denser areas.