Globalization has made our great cities incalculably richer but also increasingly divided and unequal. More than youth, ethnicity or even race, London’s riots are about class and the growing divide between the classes. This dynamic is not unique to London but is at work in many of the world’s great capitals. Instead of reducing and flattening economic distinctions, globalisation has made them sharper.”

To read more, check out Richard’s recent column in the Financial Times.

Based on new data from the United States Conference of Mayors and The Council for the New American City annual U.S. Metro Economies Report

The above map highlights some of the U.S.’s largest metropolitan areas, comparing their Gross Metropolitan Products to the nearest Gross Domestic Product equivalents of countries. If nothing else, it provides an insight into the sheer scale of the U.S. economy, even when it is in crisis.  As I noted in an earlier post, 37 of the world’s 100 largest economies are U.S. metros.

Here are the key takeaways:

• New York-Northern New Jersey-Long Island, NY-NJ-PA: $1.28 trillion, the NY metro is the equivalent of the 13^th largest nation in the world, bigger than Australia’s $1.23 trillion and South Korea’s $ 1 trillion GDP, and just under India’s ($1.6 trillion), Canada’s ($1.57), and Russia’s ($1.47).

• Los Angeles-Long Beach-Santa Ana, CA: With a GMP of $737.9 billion, the LA metro’s economy is the equivalent of the 18^th largest nation in the world—bigger than Turkey’s ($732.2) and slightly smaller than the Netherlands’ ($782.3).
• Chicago-Joliet-Naperville, IL-IN-WI: At $531 billion, Chicago’s metro is the equivalent of the 21^st largest economy in the world—larger than Switzerland’s ($523.3), Poland’s ($469.4) and Belgium’s ($466.3).

• Washington-Arlington-Alexandria, DC-VAMD-WV: With a GMP of $426 billion, the metro around the US’s capitol is also the 28^th largest economy in the world, a little smaller than Saudi Arabia’s ($434.7 billion) and Taiwan’s ($431.7 billion), bigger than Norway’s ($414.3) and Iran’s ($385.7).

• Houston-Sugar Land-Baytown, TX and Dallas-Fort Worth-Arlington, TX: With $378.9 and $376.8 billion in GMP, the Houston and Dallas metros are the world’s 31^st and 32^nd largest economies. Each is bigger than Austria’s ($375.5), Argentina’s ($368.9), and South Africa’s ($363.7).

• Philadelphia-Camden-Wilmington, PA-NJ-DE-MD and San Francisco-Oakland-Fremont, CA: With GMPs of $347.7 and $337.4 billion respectively, the U.S.’s seventh and eighth largest Metropolitan areas are the 36^th and 37^th largest economies in the world. Each of them have more output than Thailand ($318.9) and the United Arab Emirates ($317.1).
• Boston-Cambridge-Quincy, MA-NH: The city of Boston has shrunk considerably over the last five decades, but its metropolitan area is the nation’s ninth largest. With $311.3 billion in Gross Metropolitan Product, it is the 40^th largest economy in the world—bigger than Denmark’s ($310.1) and Greece’s ($303.4).

• Atlanta-Sandy Springs-Marietta, GA: The Atlanta metro’s $270.6 billion in GMP gives it a worldwide rank of 44—just a little below 43^rd –ranked Colombia, which has a GDP of $288 billion. Atlanta’s GMP surpasses Venezuela’s GDP ($241.1 billion) and Finland’s ($270.6).

The combination ofthe Great Recession, rising gas prices, and growing environmental concerns are causing may people to rethink how they commute. After housing, transportation is the biggest item American families spend money on, accounting for an average of 20 percent of a typical family’s budget. The sheer fact of car ownership can make the difference between who spends and who saves, and even which homes go into foreclosure, as I noted here.  Not to mention that being stuck in traffic ranks high on almost every list of the things that make us the most unhappy.

And yet for all that, America remains overwhelmingly a nation of drivers. Across the board, nearly nine in 10 (86 percent) of Americans commute to work by car and more than three-quarters (76.1 percent) drive to work alone, according to the most recent estimates from the American Community Survey.  Only five percent use public transit to get to work.

But does where we live make a difference in how we commute?

• It’s no surprise that 82 percent of Manhattan workers get to their places of employment via public transit, bicycle, or on foot. But more than four in ten (43 percent) of all commuters in the Greater New York metro don’t use cars either. Neither do 25 to 30 percent of workers in San Francisco, Boston, and Greater Washington, DC.

• Less than three percent (2.9) of Americans walk to work, but more than five percent of New Yorkers do. And in the college town of Ithaca, New York, 14 percent do.

• Only a little more than half of one percent (0.6) of Americans ride their bikes to work. But more than five percent do in Eugene, Oregon and Fort Collins, Colorado. In the Portland, Oregon metro more than two percent of commuters cycle to work, and in San Francisco and San Jose (Silicon Valley) roughly 1.5 percent do.

• Walking and biking to work are especially prevalent in compact college towns, including Boulder, Colorado, Ann Arbor, Michigan, Madison, Wisconsin, Iowa City, Iowa, Corvallis, Oregon, Gainesville, Florida, Burlington, Vermont, State College, Pennsylvania, and Lafayette, Indiana, among others.

What factors shape these commuting patterns?  You’d think that density would matter for one—transit is more available and it’s easier for commuters to walk or bike to work in cities and metros that have less sprawl.  Weather and climate should also play a role: Who wants to cycle or walk to work in wet, cold, and snowy places? It’s much easier and more pleasurable to use your feet to get to work when and where the weather is nice.

But “what you’d think” isn’t always what is. To get a better idea, my colleague Todd Gabe, an economics professor at the University of Maine and an MPI Affiliate, ran a series of statistical analyses to gauge the determinants of public transportation use and walking and biking in US metropolitan areas. He looked at factors like population density, rainfall, temperature levels, housing development, and the kinds of work people do. The upshot is this:

• Population density increases public transportation usage, but has no effect on walking and biking.

• Weather and climate do play a role, but not necessarily what you’d think.  People are more likely to drive to work where the weather is warm and/or wet. Public transit use as well as walking and biking are more common in drier climes but also in places with colder January temperatures.

• The longer the commute (based on the average commute time), the more likely people are to use public transit, but—not surprisingly—the less likely they are to bike or walk.

• The type of housing development matters. The share of housing units built between 2000 and 2006 is negatively associated with the percentage of people who bike, walk or take public transit to work. Rapidly growing cities of sprawl – those which built the most houses during the height of the bubble – remain much more car-dependent than other places.

• Finally, and perhaps most interesting, the way we get to work is associated with the kinds of work we do. The share of workers in the creative class – scientists, engineers, techies, innovators, and researchers, as well as artists, designers, writers, musicians and professionals in healthcare, business and finance, the legal sector, and education – is positively associated with the percentages of people who take public transit or walk or bike to work. In fact this creative class variable was the largest of all.

Reducing our dependence on the car would relieve many families of a pressing financial burden, reduce emissions and lessen our carbon footprint.  Changing where and how we live may help us get there faster.

A year ago, I published a book that argued that, for all the privations and dislocations of the economic crisis, it also provides us with the opportunity to make fundamental changes in our economy and society. I characterized these changes as a Great Reset, and I found similar moments in American history when new economic orders arose from the ashes of old ones, ushering in new eras of growth and prosperity. Since writing the book, I’ve been able to see for myself what I’ve long suspected: that Great Resets unfold not from top-down policies and programs but gradually, as millions upon millions of people respond to challenging economic times by changing the ways that they live.  The economic crisis has taught us the hard way that we need to live within our means, to forestall debt; it’s made us understand that we don’t have to define ourselves in terms of material goods, that we can achieve a more meaningful and sustainable way of life.

In my travels across the country, I’ve heard from people who are in the process of resetting their lives.  Young people just out of college tell me that they don’t want their parents’ suburban lifestyle; they’d prefer to find an affordable rental apartment in a city they love where economic opportunities are better. They don’t want to go into hock buying a big house and a big car, just so they can endure a long commute. Young parents tell me they’ve had to defer their dream of buying a bigger house with a backyard, either because they can’t afford it or don’t qualify for a mortgage. Instead, they’ve decided to stay put and renovate their city apartment or fix up their small house in an older, closer-in suburb.  Empty nesters tell me they’ve decided to sell the big house, sometimes for a lot less than they could have gotten for it a few years ago, and buy a smaller condo or house closer to their kids in the city.  These shifts, brought on by economic exigencies, are already adding up to a gradual but enduring change in the way we live – one that will prove every bit as consequential as the move towards suburban living was in the 1950s and 1960s.

Watching the Reset unfold, it’s been fascinating to see how quickly the once great divide between our cities and suburbs has been shrinking.  The most desirable neighborhoods look increasingly similar, no matter where they are. The best urban neighborhoods are safe and have good schools; they are becoming strollervilles and toddler-towns, filled with families as well as singles. The best suburban neighborhoods have great commercial districts with restaurants, movie theaters, and all manner of amenities. As many of our cities and older inner-ring suburbs are being renovated and revitalized, the great challenge of our time – far bigger than urban renewal was in decades past – is to remake our many shoddily-built, far-off exurbs into denser, more- connected, more livable communities. Some of them—the ones that were built as much to keep the building boom going as because people needed to live in them—might be fated to shrink back into small towns or disappear altogether.

Gradually, our great complexes of cities and suburbs are being knit into mega-regions – giant city-states that are home to millions upon millions of people and generate billions and in some cases trillions of dollars of economic activity. Driving this is not just our individual choices and preferences but the very logic of economic development. Geographic concentration and clustering speeds the transmission of new ideas, increases the underlying productivity of people and firms, and generates powerful economies of scale.

This new economic landscape and emerging way of life won’t come together completely on their own.  As this book points out, all of this must be underpinned and supported by new kinds of infrastructure – from more efficient living patterns to more effective, less car-dependent transportation systems that run the gamut from more bicycle paths and sidewalks to improved mass transit and high speed rail. Just as government programs and policies underpinned the rise of suburbia in the 1950s and 1960s (think of all those subsidized highways), new public policies toward rental and affordable housing, alternative transport, and more sustainable energy will help encourage this shift today. But while individual Americans have already begun resetting their lives, our political and business leaders continue to look backwards, wasting precious time and resources on futile attempts to resuscitate the same dysfunctional system of banks, sprawl, and inefficient and energy-wasting ways of life that brought about the crisis in the first place. .

According to Bureau of Labor Statistics projections, the US economy remains on track to generate 15 million new jobs over the next decade. 6.8 million of them will be high-skill, high-wage work in the knowledge, professional, and technical sectors of the economy. The other half will be much lower-paying, low-skill work in the routine service sector of the economy. More than 45 percent of the US workforce—60 million workers—already do this kind of work, and they earn just half of what factory workers make—and only a third of what professional, technical and knowledge workers are paid.

If we’re serious about creating good, family-supporting jobs, we have no choice but to upgrade those service jobs and turn them into adequate replacements for the blue-collar jobs that have been wiped out.  We did it 70 or 80 years ago when we transformed manufacturing jobs from low-paid, dangerous work into high-paid jobs; we must do it again. Henry Ford long ago said that we needed to pay factory workers better so they could buy the cars they made.  If each of us pays just a little more for services, we can ensure millions of service workers a family wage and spur the broad-based demand that will help the economy recover. Don’t the people who prepare our food, take care of our kids and aging parents, and maintain our homes deserve decent wages? ?  Can’t we spend a little more to ensure a more equitable and prosperous society? It’s not a matter of charity; motivated workers are more productive; they’re also more creative and innovative.

Easy credit, limited bailouts, and targeted stimulus have simply created the illusion of growth, without beginning to address the structural nature of the crisis.  And much of what the Tea Partiers have been calling for—slashing taxes and cutting critical public investments—will only make things worse.  Our leaders just aren’t getting it; their mental models are so determined by the old order that they can’t acknowledge that it has already passed.

We need to break with the past and engage with the future that is already upon us.  There is no stopping this ongoing Great Reset. But left to its own devices it will unfold in a stop-and-start, trial-and- error fashion over the course of the next two, maybe three decades.  My hope is that this book can help us move more quickly down the path to real recovery, minimizing the pain and suffering faced by too many, and ushering in a new era of sustainable prosperity for everyone.

The paperback edition of the Great Reset is available July 5th.  You can get a copy online here.

This is a longer, more detailed, and more statistics-laden version of an op ed piece that ran in the Financial Times on Friday. As mysterious as the downward trend in crime may be (and as vexing a challenge as it’s posed to professional explainers), it’s obviously a welcome development—and is very possibly a bellwether of even more positive changes in our society.

Almost three years into the worst economic downturn since the Great Depression, with massive unemployment and pessimism rife, America’s crime rates are falling and no one—not our pundits, policemen, or politicians, our professors or city planners—can tell us why. As I wrote about here, there were 5.5 percent fewer murders, forcible rapes, robberies and aggravated assaults reported in 2010 than in 2009, according to the most recent edition of the FBI’s Uniform Crime Report; property crimes fell by 2.8 percent over the same period and reported arsons dropped by 8.3 percent. And the drop was steepest in America’s biggest cities—which are still popularly believed to be cauldrons of criminality. “While cities and suburbs alike are much safer today than in 1990,” notes a recent report by the Brookings Institution, “central cities—the big cities that make up the hubs of the 100 largest metro areas—benefitted the most from declining crime rates. Among suburban communities, older higher-density suburbs saw crime drop at a faster pace than newer, lower-density emerging and exurban communities on the metropolitan fringe.”

An essay in The Economist featured a graphic which charts the arc of American crime rates since the 1960s. Its caption poses the question that is on everyone’s lips:

Some explanations evoke Sherlock Holmes’ “dog that didn’t bark.” When crime rates first began to fall in the 1990s, Steven Levitt and John Donohue III argued that legalized abortion was responsible, since unwanted children would have been more likely to grow up to be criminals – a finding that was not only wildly controversial but has been met with substantial challenge. Research by economist Jessica Wolpaw Reyes find attributes a significant proportion of the decline in violent crime to children’s reduced exposure to lead.

Others suggest that America’s astronomical incarceration rate—the highest in the world—is responsible, though that begs the question why countries that don’t incarcerate their citizens at anything like the same rate suffer from less crime than the US does. It’s disquieting to think that what would seem to be an unalloyed social good—less crime—might have been brought about in part by what many believe to be a social disaster: America’s draconian, unequally enforced drug laws. Still, law enforcement must be given its due; many big city police departments have developed statistically-driven methodologies for targeting crime hot-spots, with conspicuously successful results. And we as individuals have changed our behavior as well—from taking elementary precautions like locking our doors, to investing in crime-stopping technology like burglar alarms for our homes and LoJack for our cars.

Still, it is confounding that crime would decline as economic conditions worsen. My own analysis, conducted with my Martin Prosperity Institute colleague Charlotta Mellander, turns up no statistical associations between crime and either the level or the change in the level of unemployment across metros, or between crime and the level of income inequality. There does seem to be a modest relationship between the absolute poverty rate and crime. Our analysis turned up an association of .19 between crime and the percent of population below the poverty line. But it has weakened substantially over the past two or three decades, according to the Brookings study.

So too has the relationship between crime and race. From evening news headlines to crime shows on TV, popular culture underlines the propinquity between crime and race Our analysis turned up modest correlation (.37) between crime and the share of population that is black. But again, Brookings Institute report assembles powerful evidence to show that the relationship has been weakening. “The association between crime and community characteristics—like the proportion of the population that is black, Hispanic, poor, or foreign-born—diminished considerably over time,” notes the study. “The strength of the relationship between the share of black residents and property crime decreased by half between 1990 and 2008, while the association between the share of Hispanic residents and violent crime all but disappeared.”

In the popular imagination, crime is frequently associated with big, densely populated cities. Here again, we can separate fact from myth.  Primary cities and older high-density suburbs exhibited the largest decreases in crime between 1990 and 2008, according to the Brookings study. And the gap between city and suburban violent crime narrowed in two-thirds of the nation’s 100 largest metro areas. Our own analysis turns up no association whatsoever between metro size or metro density and the overall level of crime, though we do find a modest correlation (.25) between density and violent crime.

In a thoughtful essay in the Wall Street Journal, the distinguished political scientist and urban crime expert James Q. Wilson hit hard at strictly economistic explanations, suggesting that deeper changes in American culture can better account for the mystery. “The cultural argument” he writes, can help explain not only the current drop in crime, but also “the Great Depression’s fall in crime and the explosion of crime during the sixties. In the first period, on this view, people took self-control seriously; in the second, self-expression—at society’s cost—became more prevalent.” My former Carnegie Mellon University colleague, the distinguished criminologist Alfred Blumstein, proposes an “Obama effect,” in which young black males’ increased optimism about their futures makes them more likely to refrain from violence.

But the key factor, as it turns out, lies in the growing racial, ethnic, and demographic diversity of our cities and metro areas. Our analysis found that the Hispanic share of the population is negatively associated with urban crime. Crime also fell as the percentage of the population that is non-white and the percentage that is gay increased. And of all the variables in our analysis, the one that is most consistently negatively associated with crime is a place’s percentage of foreign-born residents. . Not only did we find a negative correlation (-.36) between foreign-born share and crime in general, the pattern held across all of the many, various types of crime – from murder and arson to burglary and car theft. The Brookings study also finds evidence of a substantial shift in the connection between foreign-born residents and crime. While foreign-born share was positively associated with crime in 1990 and 2000, that relationship had disappeared by 2008. The foreign-born share of population now shows no relationship to property crime, and a negative relationship to violent crime. The pattern is most pronounced for primary cities and inner-ring suburbs, the Brookings study found, but not for lower-density suburbs and ex-urbs.

It might be hard to wrap your mind around this—especially with all the demagoguery about immigration. But the numbers tell a different story than our alarmist pundits and politicians do. “Since 1990, all types of communities within the country’s largest metro areas have become more diverse,” Elizabeth Kneebone, one of the authors of the Brookings report, wrote in The New Republic. “Crime fell fastest in big cities and high-density suburbs that were poorer, more minority, and had higher crime rates to begin with. At the same time, all kinds of suburbs saw their share of poor, minority, and foreign-born residents increase. As suburbia diversified, crime rates fell.” Along with their entrepreneurial energy and their zeal to succeed, immigrants are good neighbors—cultural and economic factors that militate against criminal behavior, and not just in their own enclaves but in surrounding communities as well.

One additional factor bears on this. Our analysis also turns up a consistent negative correlation between crime and the overall level of city happiness. It makes intuitive sense that a low-crime city would be a happy city; still, it’s worth pointing out that the happiness measure (which comes from Gallup surveys) is associated not just with overall crime but with almost every type of crime across the board. This is somewhat striking in an analysis where associations between crime and key social and economic variables are hard to find. More to the point, the Gallup research identifies openness to diversity as being one of the two most important factors that shape city happiness and community satisfaction across the board.

America’s declining crime rates are cause for celebration, even if we can’t completely explain the phenomenon. The fact that diversity appears to play such a signal role in the trend—something that most Americans regard as a moral and economic good in its own right— makes it all-the-more satisfying.

With the passage of the New York Marriage Equality Act, the number of gay couples in the US who are eligible to marry has now doubled, as my post yesterday noted.  Approximately 9 million Americans are lesbian, gay, bisexual or transgender (LGBT) – slightly less than four percent of the population, according a recent study by Gary Gates of UCLA’s Williams Institute.  Approximately half of lesbians and gay men are members of same-sex couples including an estimated 160,000 who are married, according to Gates’ research. Nearly one in five same-sex couple households are raising children, compared to about 45 percent of heterosexual couples, according to figures from the American Community Survey (ACS).

The list below, drawn from Gates’ analysis of data from the ACS, show the 15 metros that have the largest percentage of same-sex couples raising children under eighteen years of age. The densest concentrations of such families are not necessarily in the places where you’d expect to find them. Especially surprising are the metros that don’t make the cut – like San Francisco and New York.

Riding a bike through a city, David Byrne wrote in his book Bicycle Diaries, “is like navigating the collective neural pathways of some vast global mind.” Biking, he adds, “facilitates a state of mind that allows some but not too much of the unconscious to bubble up. As someone who believes that much of the source of his work and creativity is to be gleaned from those bubbles, it’s a reliable place to find that connection.”

Cycling is one of my own great passions.  I like nothing more than to get on my road bike and just go. My bike is not just a great way to get around, it’s a great way to get to know cities.

It’s also a good way to stay in shape, as witnessed by this post at the Living Streets Alliance blog, which noted the uncanny overlap between the places listed in my post on America’s Fittest Cities and the cities where the greatest percentages of people who bike to work live. That got me wondering what other characteristics of metropolitan areas might be associated with higher levels of cycling.  With the help of my colleague Charlotta Mellander, I took a quick look at the numbers. We used data from the American Community Survey (ACS) on the share of people by metro area who commute to work by bike.

Nationally, less than one (0.6) percent of Americans ride their bikes to work.  But the share of bike commuters varies quite a bit across metros.

The table below lists ACS figures for the top 25 metros with the largest shares of bike commuters.  (These data cover entire metros; data for core or center cities may be higher). At the top of the list are Eugene, Oregon and Fort Collins, Colorado, where more than five percent of commuters bike to work. College towns dominate the list—Boulder, Colorado, Madison, Wisconsin, Santa Cruz, California, Iowa City, Iowa, Gainesville, Florida, State College, Pennsylvania, and Lincoln, Nebraska among others. But bigger metros like Portland, Oregon, Honolulu, Sacramento, San Francisco, and San Jose (Silicon Valley) also rank highly.

Top 25 Metros for Bike Commuters

Source: American Community Survey, Share of Commuters Who Bike to Work.

All of this begs the question: What is it about these metros and others where cycling to work is more prevalent? So Mellander and I compared these figures on bike commuting to key social and economic characteristics of metros. Though all we are looking at are associations—our analysis does not infer causality and other factors may come into play—some of the findings are rather intriguing.

First off, metros where more people cycle to work are more affluent. Metros with a greater share of bike commuters have higher average wages (with a correlation of .5).

They have higher levels of education or human capital (a correlation of .5) and more knowledge-based economies as well. Cycling to work is positively associated with the share of creative class jobs (.3) and negatively associated with working class jobs (-.4).

They’re more diverse. The share of commuters who cycle to work to work is positively associated with higher levels of immigrants (.3) and even more so with higher concentrations of gays and lesbians (.4).

Cycling to work also goes together with happiness. The percentage of cycling commuters is positively associated with levels of happiness and well-being, which we measure via Gallup surveys (with correlation of .5).

As for fitness, the hunch by the folks at the Living Streets Alliance was right.  Metros with a higher percentage of cycling commuters boast higher rates of fitness on the American College of Sports Medicine’s American Fitness Index™ (with a  correlation between the two of .5).

Biking metros are richer, better-educated, and more fit than non-biking places. They’re happier, and, as exemplified by Mr. Byrne, more creative too.

The Creative Class Group will embark on a variety of initiatives influenced by the creative group they have identified. They will perform research to help Le Méridien identify new development opportunities by applying their exclusive ‘creativity index’, using the Creative Class Group’s one-of-a-kind framework; technology + talent + tolerance and territorial assets. CCG will help to connect Le Méridien hotels to key contacts in each city from the fields of tourism, culture, art, design and cuisine. They will work to acquire influential speakers to participate in “New Perspective Events” at Le Méridien hotels across the globe. CCG  will also curate content for the ‘Hub’ libraries selected based on their research on the core attributes, values and preferences of the Creative Class. The books selected will comprise of a mix of contemporary and foundational books about creative culture in the arts, design, economy and society, as well as localized books reflecting each cities history and characteristics.

Read the full release here.

Photo © Ralph Gibson

The map below shows the price of land in the New York metropolitan area (via Matt Yglesias) from this fascinating New York Fed study. The premium for land in central Manhattan is nothing less than extraordinary. Land prices rise and fall logarithmically according to their distance from midtown, notes to the study: “A parcel located five miles from the Empire State Building commands a price that is about twice as high as the price of a parcel ten miles away.”

The map is “a reminder that, among other things, people living in expensive houses in Manhattan and the convenient parts of Brooklyn and Queens aren’t just experiencing ‘high housing costs’ or a ‘high cost of living,’” writes Yglesias, “they’re specifically purchasing a commodity — space with easy access to the core business districts of America’s largest city — that the market puts a very high price on.”

It’s a commodity that reflects two underlying price premiums. The first is an amenity premium – the price people pay to be around great restaurants, museums, theatre and culture as Harvard’s Ed Glaeser and others have shown. The second is a productivity premium, for the economic leverage that comes with such central locations.  As the University of Chicago economist Robert Lucas famously put it: “What can people be paying Manhattan or downtown Chicago rents for, if not for being near other people?”  It’s this underlying productivity effect that generates higher incomes, which in turn lead to higher prices.

The end result is a geography organized around economic spikes which, like central Manhattan, show us that even in the era of far-flung globalization, location remains economically more important than ever before.