Chicago good at attracting the creative class, not good at keeping them

Recent data suggests Chicago attracts a good number of the creative class – young, college graduates – but they don’t stay in the city long-term:

And still the 20-somethings swarmed to the city. If you drew a circle with a 2-mile radius around Chicago’s City Hall, as the Census Bureau did, you’d find the population in that ring had grown by 48,288 residents — 36 percent — between 2000 and 2010, even as the overall population fell. Census researchers measured the growth within similar rings in other metro areas. Chicago outpaced them all…

Chicago demographer Rob Paral points out that the 25- to 34-year-olds counted from 2007 to 2011 are even better educated than those in 2000. The Census Bureau’s American Community Survey found 46 percent of the residents in that age bracket had a bachelor’s degree or higher, compared with 36 percent in 2000. Among America’s top 10 cities, Chicago recorded the highest percentage of young college grads and the largest increase since 2000…

Then what? This is a demographic with choices. If the city looks less appealing once the babies come along, many of them will leave. Big-city crime is sometimes the explanation, but in truth most of these young adults live in neighborhoods largely insulated from the violence of the South and West sides.

More often, the deal breaker is the public schools. Staying in Chicago can mean spending thousands on private tuition, or working the system to get the kids into one of the city’s selective-enrollment high schools. Suddenly it’s easy to see the attraction of smaller suburban districts, their tax collections enriched by higher property values…

How can the city hold on to those families? One way, it turns out, is to suffer a massive recession. Census data show that from July 2010 to July 2012, Chicago’s population inched up again — by about 19,000 residents — as out-migration slowed to a trickle. Meanwhile, two decades of double-digit exurban growth lurched to a near standstill.

Since having a recession isn’t a good long-term growth strategy, the city will have to try something else. Most American big cities would love to have more young college-educated adults, particularly those involved in industries like the technology sector or those willing to move into and improve less well-off neighborhoods. Yet, this article highlights a second issue: how exactly do all these cities then retain these adults as they age? One irony not noted in this article is that many American urban neighborhoods offer the ability to own a home, even a single-family home with a yard. But, getting over this idea that cities are not good for children is more difficult. Whether it is an issue of schools (and Chicago has some of the highest-performing schools in Illinois) or safety and crime or a perceived need to interact with kids like them, these will be tough to overcome. Additionally, fighting these perceptions might include creating and maintaining kid-friendly pockets in the city, but this leads to other issues such as very different experiences of urban residents (for example, compare the life chances of kids from Lincoln Park in Chicago versus those from Englewood) and this is still different than fleeing to an exclusive suburban community where the wealthier and more-educated don’t have to interact with anyone other than them.

I don’t remember Richard Florida, the main proponent of the creative class, talking much about this issue…

The of effects tech company shuttle buses from San Francisco to Silicon Valley

A number of Silicon Valley workers live in San Francisco and a number of the biggest tech companies offer private shuttle buses for employees. This has led to changes in a number of San Francisco neighborhoods:

Take the public transportation provided by corporate shuttle buses from the likes of Apple, Google, Facebook, and others. It’s not news that these shuttles, and the big digital tech companies that run them, are changing the fabric of San Francisco as we’ve known it. What feels new is that it’s not enough to say that change is coming soon. It’s already, very much here

On one hand, some have called the shuttles “a vivid emblem of the tech boom’s stratifying effect in the Bay Area” because they allow the “techy progeny” of Silicon Valley to be “launched into SF proper.” That the shuttles are “alienating everyone who isn’t in technology” — or that there’s simply too much tech for one city to take.

Others are of the mind that it’s simply time to get over it and recognize a new reality; cities change, neighborhoods rise and fall. That in fact a paradox of Silicon Valley is in its “distributing meaningful equity” to ordinary people who wouldn’t otherwise access such wealth. (And then there’s the logic that wonders whether public transportation is yet another bit of infrastructure that should be upended by the Valley’s “meritocratic“ spirit.)…

What we’re talking about isn’t simply the replacement of presumably authentic recent immigrants by their presumably younger, whiter, or better educated new neighbors. What we’re talking about is the replacement of an entire system of urban inter-relationships, built up over generations and stratified in ways that make sense within an urban context — now short-circuited by the inexorable demands of the (suburban) digital technology landscape.

This is a reminder of a few things:

1. The arrival of “the creative class” is not just a positive occurrence. This is a group many big cities would love to have for their wealth (think of the tax money!) as well as their innovative and creative spirits. Yet, as the term gentrification describes, this group can at the least change the character of places and more problematically push out existing residents.

2. This hints at the interdependence within metropolitan regions. Tech workers may like their jobs in Silicon Valley but San Francisco offers a more exciting, urban, and cultured place to live. And, San Francisco benefits from its business connections to Silicon Valley. It would also be interesting to consider the role of San Jose which offers a bigger city closer to Silicon Valley but one that has less of a reputation for social life.

With these changes, it puts officials in San Francisco in an interesting position. Existing urban residents tend to resist major changes to their neighborhoods. But, as noted above, cities have a hard time turning down new money.

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)?

How will American culture change since Millennials want to buy the newest smartphones rather than cars and houses?

Here is part of a fascinating article about what Millennials want to purchase and how this differs from the consumption of previous generations:

Needless to say, the Great Recession is responsible for some of the decline. But it’s highly possible that a perfect storm of economic and demographic factors—from high gas prices, to re-­urbanization, to stagnating wages, to new technologies enabling a different kind of consumption—has fundamentally changed the game for Millennials. The largest generation in American history might never spend as lavishly as its parents did—nor on the same things. Since the end of World War II, new cars and suburban houses have powered the world’s largest economy and propelled our most impressive recoveries. Millennials may have lost interest in both…Subaru’s publicist Doug O’Reilly told us, “The Millennial wants to tell people not just ‘I’ve made it,’ but also ‘I’m a tech person.’?” Smartphones compete against cars for young people’s big-ticket dollars, since the cost of a good phone and data plan can exceed $1,000 a year. But they also provide some of the same psychic benefits—opening new vistas and carrying us far from the physical space in which we reside. “You no longer need to feel connected to your friends with a car when you have this technology that’s so ubiquitous, it transcends time and space,” Connelly said.

In other words, mobile technology has empowered more than just car-sharing. It has empowered friendships that can be maintained from a distance. The upshot could be a continuing shift from automobiles to mobile technology, and a big reduction in spending…

In some respects, Millennials’ residential aspirations appear to be changing just as significantly as their driving habits—indeed, the two may be related. The old cul-de-sacs of Revolutionary Road and Desperate Housewives have fallen out of favor with Generation Y. Rising instead are both city centers and what some developers call “urban light”—denser suburbs that revolve around a walkable town center. “People are very eager to create a life that blends the best features of the American suburb—schools still being the primary, although not the only, draw—and urbanity,” says Adam Ducker, a managing director at the real-estate consultancy RCLCO. These are places like Culver City, California, and Evanston, Illinois, where residents can stroll among shops and restaurants or hop on public transportation. Such small cities and town centers lend themselves to tighter, smaller housing developments, whether apartments in the middle of town, or small houses a five-minute drive away. An RCLCO survey from 2007 found that 43 percent of Gen?Yers would prefer to live in a close-in suburb, where both the houses and the need for a car are smaller.

This article is primarily about the economic impacts of these shifting patterns but I think there is another important side to this: how does this affect American culture? A few ideas…

1. What makes up the American Dream will likely shift. We have gone almost 100 years with this combination: a house of one’s own and a car (or multiple cars in recent decades). The content of this dream will change and the pace to which people pursue it. Newest additions to the Dream: can I get a smartphone with an unthrottled data plan? How about a living arrangement that is exciting in terms of having nearby cultural and social opportunities but doesn’t tie one down financially?

2. As fewer teenagers see getting a driver’s license as the same sort of initiation into adulthood and freedom as previous generations, perhaps we have a new marker of adulthood: getting the first smartphone (with at least texting capabilities and perhaps also data).

3. As I’ve discussed before, the possible new kinds of suburbia we might see in the coming decades would be a remarkable shift away from completely auto-dependent developments. This will lead to some interesting consequences for housing. New Urbanism may just explode in popularity (as long as such developments are reasonably priced).

4. The car is no longer an important status symbol but rather more like a tool that is used to get from Point A to Point B. Tools may have some fun features but the number one concern is that that they function consistently. In contrast, the phone (and what one can do with it) becomes a status symbol.

5. As we’ve seen in recent years, announcements of new technologies and smartphones will garner increasing levels of attention. Just look at what happens when we get close to an Apple announcement for the newer iPhone (or iPad). Cars and houses will have to fight even harder for your attention. How this changes the ratio and content of commercials will be interesting to watch.

6. When are we going to see television shows and movies that truly reflect plugged in and online worlds? We have plenty of examples where characters use these devices but precious few that show what it is like to consistently operate in the online and offline worlds. The movie Catfish comes to mind. While most online users won’t go to the lengths the characters do in this movie, at least it depicts people living out real relationships in the online sphere.

7. A growing push for cheaper, faster, perhaps even free Internet access everywhere. To be disconnected will be viewed as more and more undesirable.

8. Revamping existing housing stock will require some imagination and creativity in marketing, construction, and financing.

9. Building off Richard Florida’s ideas about the creative class, what happens when this group becomes too big and unwieldy and is no longer “select,” there are not enough places that meet their requirements (not everywhere can be Austin), and not enough jobs for people with their education and interests? Obviously, shifts can take place but these won’t necessarily be easy.

Richard Florida argues cities increase levels of inequality

Richard Florida, dubber of the Creative Class, argues that data shows that cities exacerbate levels of inequality:

“Something fundamental has changed in our economy, and it’s happening at the metropolitan level,” explains Baum-Snow. “If we want to understand what’s causing the wage gap, we now know we need to look at the unique economies of our larger cities,” adds Pavan.

Both the U.S. and the world have grown increasingly spiky, with our socio-economic divide increasingly overlaid with a growing economic geography of class.  Big cities like New York and LA have attracted wealthy people not just from America but from around the world.  This trend reflects the growing advantages of geographic clustering or agglomeration.  The larger and more populous a city or region, the more likely it is to have the human capital and economic ecosystems required to support the most advanced — and hence the highest-paying — technologies and industries.  Bigger cities attract more innovators, more entrepreneurs, and more highly skilled and ambitious people in general, and provide a fluid environment where these individuals can combine and recombine their skills. Big cities also generate powerful economies of scale and scope, resulting in higher rates of innovation, new firm formation, and productivity.  They attract better-educated, better-trained, more-experienced workers, driving up wages.

At other side of the spectrum, manufacturing, which once clustered in and around large cities and metros, has shifted to less expensive suburban, exurban, and off-shore locations. And large cities have become home to a large and growing contingent of lower-skill, lower pay service jobs — from childcare and food preparation to retail sales and personal services.  Taken together these factors have in effect divided or bifurcated the labor market in big cities into highly paid “creators” and much lower-paid “servers.”

On the other side, Florida also shows a (very modest) correlation that city size is related to higher wages. But overall, Florida argues that cities draw both the uber-wealthy and those who “serve” the city.

Florida doesn’t present much data here so we would need more analysis in order to figure out what is going on. Does this argument present a  counterpoint to these two articles about the future of cities and suburbs in Foreign Policy last fall? It is hard to tell – Florida also says that cities are centers of innovation and entrepreneurship. And even if cities do have extreme levels of inequality, do they benefit larger society enough to offset the inequality within their borders?

(Interestingly, both Florida’s data and the study he cites use metropolitan areas to mean cities. This makes a lot of sense: central cities and suburbs should be viewed more often as single, interdependent units. Would the inequality be even more pronounced if the analysis was limited to central city borders?)

Looking for the “great reset” button in Asheville

Earlier this year, Richard Florida released a book titled The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity. This book about economic development is apparently on the minds of some leaders in Asheville, North Carolina:

In other words, there’s a “new normal’’ emerging, with people saving more of their hard-earned money, and civic leaders having to ask what’s going to be the best investment of tax money in our sidewalks, bridges, and highways as well as what can encourage small businesses to take root here and nurture new jobs.

Florida is no stranger to Asheville, which served almost as a poster child for his 2002 bestseller “The Rise of the Creative Class.” The sociologist showed interesting research that the diversity and tolerance for different lifestyles that attract creative individuals may mean as much to the economic health of a community as industrial parks and factories that economic developers have traditionally touted.

I suspect there a lot of communities asking similar questions: how do we forge a viable and sustainable economy based on the realities of today’s economic landscape? Neal suggests Asheville leaders think they have the ability to capitalize on some of Florida’s ideas including attracting young human capital (“the creative class”) and being part of the megaregion of “Charlanta.”