The New York Times and its Upshot series is back at it again, this time with a piece about how cities are no longer places for low-skilled people to seek opportunity.
There is much discussion about those left behind as cities continue to become more affluent and cosmopolitan. And it’s absolutely true that the cost of living is so high in San Francisco, New York, Washington, Boston, and a few other places that it’s simply not possible to live decently, let alone raise a family, on a middle class salary. The middle and working classes are getting priced out of more and more neighborhoods. There are myriad reasons for the continued price increases, and byzantine local politics and regulatory red tape are certainly at least partially responsible for that increase, as more libertarian-leaning pundits are quick to point out about these liberal, overwhelmingly Democratic cities.
But the fact remains that these cities continue to suck up a hugely disproportionate share of our nation’s elite, ruling class. As the Wall Street Journal showed last spring with this astonishing interactive map, graduates of America’s most elite, competitive universities are tending to settle only in Boston, New York, Washington, the San Francisco Bay Area, and Los Angeles, with some sprinkles in Seattle, Austin, and a few other “honorable mentions.” While we’re lucky as a nation to have multiple global talent magnets; however the concentration of the elite in such few places has been terrible for America.
First, this concentrated affluence creates a self-referential bubble that is ignorant of, or even contemptuous of, the rest of the country. It’s become a cliche for liberals to argue that other liberals don’t know anything about “The Heartland” or Trump voters. But there is more than a grain of truth to this. Evangelical Christianity, country music, rural and small-town living, and stock car racing are just a few of the cultural hallmarks of a huge swath of America whose way is regarded as, at best, merely provincial. But when economic globalization combined with ever-increasing wealth inequality and elite concentration combines with the uniquely American ability of a large, mostly non-urban plurality of the population to control national politics and policy, you get a toxic brew, and voila, Trump.
Next, the industries that have come to dominate these regions are not the ones that helped build and sustain a broad and prosperous middle class. The elites have little to offer the rest of the country relative to economic prosperity. Government and the military industrial complex notwithstanding, academia, banking and finance, fashion, media, high technology and the arts and entertainment are not the sorts of job engines that put millions of Americans to work and help them afford decent housing. And the most elite graduates of our nation’s universities – the ones who used to go and start or manage companies that made things and employed people – are now going into the far more lucrative world of finance and venture capital and startups. The elite metros are rapidly destroying their middle class, and what remains is a bifurcated haves/have-nots that is anathema to broad-based prosperity. Low skill employment is increasingly only available in low-wage service jobs, from cleaning hotel rooms to making poke bowls for marketing managers and tech bros.
To some the answer is to raise the minimum wage to $15 or even higher. But one has to acknowledge that increasing the minimum wage may be a Pyrrhic victory for progressives as it will accelerate the automation of many, if not all of the service jobs. Others like entrepreneur and presidential candidate Andrew Yang have called for a Universal Basic Income whereby the government just gives everyone some cash. My vast oversimplification of the UBI concept is twofold – that the disappearance of middle and low-wage service jobs to automation is inevitable, and that a simple disbursement of money rather than indirect spending through social programs, vouchers, and other initiatives is more effective in helping people afford the basics like housing. To me the UBI concept may be a valid one, and their points about its effectiveness could very well be true. But the UBI also represents a failure of imagination and inventiveness. To me it represents Ned Flanders’ beatnik parents delcaring “…we’ve tried NOTHING, and we’re all out of options.”
Some have called for providing incentives for the low-skilled, low-income population in places like Flint or Youngstown to “move to opportunity,” and maybe there could be opportunities for folks to flock to places like Houston, Oklahoma City, and other cities with lots of middle-class jobs and affordable housing. Providing the right financial incentives, whether direct or indirect subsidies, may be needed in some geographies that have truly lost their economic reason for being, particularly mining and factory towns from Appalachia to the Ohio Valley and Great Lakes regions. Middle class prosperity and economic opportunity are most viable in metropolitan areas – not necessarily huge ones, but urbanized areas with generally more than 250,000 to 500,000 people. From nursing to specialized manufacturing, metro regions from San Antonio to Pittsburgh, and from Jacksonville to Madison, have the most to offer in terms of decent jobs and affordable middle-class lifestyles.
Or, at least they do for now. The problem is that their share of the national wealth pie keeps shrinking as the Global Talent Magnets keep getting richer. And let’s be clear – the very qualities that have created and perpetuated the wealth and power concentration in places like New York and San Francisco make it physically impossible to attract and house more middle- and working-class people from elsewhere in the country. There are no living-wage jobs waiting for the masses of people without bachelors degrees in the Apples and Googles of Silicon Valley, or the Booz Allens and Lockheed Martins in Tysons Corner, or the J.P. Morgans and Goldman Sachs’ in Manhattan, let alone the Harvards and Brigham and Womens’ in Boston. Nor is there an oversupply of three-bedroom apartments (let alone single houses) in nice neighborhoods within reasonable commuting distance of said non-existent middle-class job suitable for raising children free of financial hardship. In other words, there can be no mass migration to those metro areas that have achieved a critical mass of global talent.
The problem is that, as the global metros keep hoovering up wealth and talent, the secondary and tertiary metros continue to lose their economic relevance. And, to poorly paraphrase J.D. Vance, it’s much easier to get a family from Jackson, Kentucky to move to Middletown, Ohio (near Cincinnati) than to San Francisco. But Cincinnati and its ilk don’t stand a chance to perpetually create sufficient wealth and prosperity if the best and brightest have little interest in sticking around, let alone moving there from elsewhere.