Tuesday, April 8, 2008

Book to Own: Who's Your City?

A few weeks back, I posted a note on Richard Florida's new book, Who's Your City?, on how the creative economy is making where to live the most important decision of your life. Well, thanks to a Ms. B, I got a hold of a copy. Here are some brief comments from the Amazon reviews before getting to the ideas I found interesting.

The Good and the Bad:

  • The spirit of Jane Jacobs lives on.
  • The book's tone wanders from broad, Friedmanesque discussion of the world economy to home-buying advice as well as statistic-and-theory-heavy text as though unsure of its intended audience. Yet the author opens up a complex, underexamined subject along the way.
Florida wants to help. He wants to explain America's economic divide abd the composition of cities, while also helping you pick out the perfect location for you at each life stage. The book could have used better editing/organization, and lacked a strong concluding chapter to bring it all together, but still packed a great deal of insight in a very readable text.

Florida breaks his ideas down into four parts: why place matters, the wealth of place, the geography of happiness, and where we live now. The first two, which comprise 127 pages, contain the meat of Florida's analysis.

Spatial Sorting and its Consequences

Florida begins by deftly dismissing Thomas Friedman's claim that The World is Flat. as he argues for a "spiky world." An important nuisance is that while place matters, it is possible for port cities like NYC and London to integrate considerably; in fact, Florida refers to the pair as NyLon.

He proceeds to explore theories of economic growth before concluding that mega-regions (The Rise of the Mega-Region PDF) are the true economic unit and that they will only continue to grow as creative people and their firms continue to cluster together.

This clustering powers economic growth, but it also has potentially negative byproducts. Florida raises this issue in his discussion of how peoples of greater income and/or ability are more mobile, while those of lesser income and/or ability are more rooted. This phenomena, coupled with gentrification, is leading to a "means migration ... dividing the world into two kinds of regions with very different economic prospects (p. 99)."

He quotes Wharton economist Joseph Gyourko, "This spatial sorting will affect the nature of America as much as the rural-urban migration of the late nineteenth century did," before asking what will happen to American society when city-regions become entirely gentrified, and the poor are relegated to the fringe and beyond.

Finding the right shiny, happy place

The final two parts of the book (170 pages) look at what people look for in a city, where they find it, where specific industries concentrate, and what this means for you in choosing where to live in each of your life stages.

This section of the book is pleasant, but not incredibly thought-provoking, especially as Florida moves away from the city data and toward "make a list of what's important to you!"

Still, I enjoyed finding out about American cities that were getting it right (Fayetteville, Arkansas, really???), and every once in a while Florida would sneak in some insightful commentary that made me glad I didn't skip any chapters.

How Education leads to Sorting...

On p. 247, Florida returns to the idea of spatial sorting. The rich and the creative are clustering in certain mega-regions, and they are also being sorted into mega-regions that specialize in certain industries (finance in NY, music in Nashville, entertainment in LA, biotech in Boston, etc.) The creative power in each of these regions is being amplified by the concentration of talent, but at the expense of diversity (not just racial, but economic, industry, intellectual, etc.)

On the next page, Florida turns to Publius favorite Tyler Cowen to explain society's growing economic divide. The culprit isn't "outsourcing, immigration, or even wage gaps ... the real culprit is the divide in human capital and education."

Cowen: "The return for a college education, in percentage terms, is now about what it was in America's Gilded Age in the late nineteenth century. This drives the current scramble to get into top colleges and universities. In contrast, from 1914 to 1950, the relative return for education fell, mostly because more new college graduates competed for a relatively few top jobs, and that kept top wages from rising too high."

The return on education has "skyrocketed" since 1980, and part of that return is the mobility low-income individuals (like Florida himself) needed to engage the economic opportunities that are not in one's backyard.

Florida jumps back to the subject of education a bit later, as he argues that current schooling was designed for the "old mass-production economy, which no longer reflects the realities of our creative age." Schooling is designed to transmit discipline, not knowledge, and while Florida is careful not to blame the teachers, he argues that schools are squeezing the creativity out of kids.

How Mating leads to Sorting...

People usually marry someone like them in economic/social class. This isn't new, but what is new is the earning power of the women in these relations. As you may have noticed, women are thriving in the workplace like never before.

So, not only is the return on education greatly increased, but now college-educated households are enjoying two times the economic benefits.

All this spells even greater economic inequality. Click here for a wiki chart showing how different percentiles have seen their income rise since 1967. Before I wrap up this beast of a post, I'll add a disclaimer that while Florida has some great insights on economic inequality, it's an incomplete analysis of the American economy and I don't think policy decisions should be based on penalizing top earners for experiencing more income growth than lower percentiles.

A clear lesson from Florida's book, however, is the role of education and its significance in empowering individuals to succeed.


Pete said...

ok so education is important and the world isnt flat. What is novel about this book? Most of the things you mentioned in your post already seemed like common sense assertions. Does he take them out of the realm of common sense and into the realm of statistically supported? Is that the strength of this book. Would you recommend reading it? GIVE ME MORE!

Publius said...

Basically, I think it provides one of the more compelling narratives of the geographic and economic shift happening in the US over past 40 years. The terms "spatial sorting" and "means migration" are powerful, and go beyond the overused catchphrases of gentrification, American dream, etc., and he provides the data to back his claims.

For instance, while writing about the growth of these mega-regions, he takes a few page to detail the evidence supporting the idea that material infrastructure (e.g., highways) is sublinear with population, while the coorelation between population growth and innovation/patent activity/etc. is GREATER than one.

"In other words, the doubling of population resulted in more than two times the creative and economic output."

Cities are the products of this "superlinear" scaling, which explains why Florida sees these mega-regions expanding toward 100 million people, rather than leveling off.

Why else should you read it?

Factoids like: "By UN predictions, by the year 2030, more than 2/3 of the world's population (4.4 billion people) will be urbanites."

You are right, Pete, in that few of Florida's ideas are novel, but his narrative as a whole provides a unique perspective, and his statistical insights are interesting and worthwhile. It's certainly worth reading, but it will leave you to write your own conclusion.

Here's Richard Florida speaking at Google: http://youtube.com/watch?v=khQ9BaXZAjM

StacySBrown said...

The real question is - where should I live?
Florida via publius says:

San Jose
San Diego
San Francisco
Santa Barbara
Kansas City

Publius said...

DC looks like the place to be in '09...