Wednesday, February 20, 2013

The Creative class won't save us

I have always like some of Richard Florida's ideas as far as showing the trends where the better jobs would be, I just thought that he pushed the idea of a creative class renaissance way to far.  While having a booming artsy class in your city is obviously going to help the municipal tax base, it is much more difficult to see  why exactly the prosperity is going to rub off on everyone else.

Fallacy of the creative class: Why Richard Florida’s ‘urban renaissance’ won’t save U.S. cities
Susan Cagle, Grist,11 February 2013 (no ht)
It was an urbanist’s nightmare. On Feb. 1, a teenager was shot dead in the middle of a popular art gallery walk and street fair in Oakland, Calif. — a town that highlights exactly what a city wins and loses when it attracts a huge influx of the vaunted “creative class.”...
By the urbanist creative-class metric, Oakland is winning. It’s a top city for urban farmers, local organic gourmet food snobs (love you, food snobs!), cyclists, and art-lovers. It’s home to a growing number of imported young makers, tech start-ups, and rising artists, in large part because of its close proximity to San Francisco and Silicon Valley. At the same time, about 13 percent of Oakland residents are unemployed, and the city still has one of the highest murder rates in the nation, especially for teens.
So are the new urban homesteaders lifting all boats along with them.

More Losers Than Winners in America's New Economic Geography
Richard Florida, Atlantic Cities, 30 January 2013 (hat tip: Susan Gagle's Grist article above)
Highly skilled knowledge, professional, and creative workers continue to benefit. They have more than enough left over in the more expensive metros. The positive correlation between their wages left over and housing costs (.58) indicates this, and the line on the scatter-graph points upward.
But the opposite is true for the other two classes of workers. The correlations between left-over wages and housing costs are negative and significant for each of them (-.36 for service workers and -.20 for blue-collar workers), and the lines on the scatter-graphs slope down.
The trickle-down effect disappears once the higher housing costs borne by less skilled workers are taken into account. The benefits of highly skilled regions accrue mainly to knowledge, professional, and creative workers. While less-skilled blue-collar and service workers also earn more in these places, more expensive housing costs eat away those gains. There is a rising tide of sorts, but it only lifts about the most advantaged third of the workforce, leaving the other 66 percent much further behind.
So if the workers stay near their job, they get higher pay, put the rent and food costs eat up all the difference.
This reality is almost the norm in America.  The help, whether it is the police, firemen, or the McDonald's employees, cannot afford to live in most areas of Urban Middle America where they work.  Although there is a lot of talk about the 1% taking all the money, the 10 to 20% in America can still do reasonably well for themselves.  They just can't afford to let too much of their money trickle down to the servants.With automation, and immigration, and to some degree, even the Walmart throw-away culture,  helping to eliminate or reduce the pay of many of the working class jobs, the workers fight over the remnants.  That keeps the pay low. 

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