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

“Our research examines the role of post-industrial structures and values on happiness across the nations of the world. We argue that these structures and values shape happiness in ways that go beyond the previously examined effects of income. Our analysis explores whether income has different effects on countries at different stages of economic development. Our results indicate that post-industrial structures and values have a stronger effect on happiness in higher income countries, where the standard of living has surpassed a certain level. Income, on the other hand, has a stronger impact on happiness in low-income countries.”

Read the full article here

Source: Map via Gallup.

Mississippi is the first state with more than 50% conservative identification, with Idaho, Alabama, Wyoming, and Utah approaching that level, and Arkansas, South Carolina, North Dakota, Louisiana, and South Dakota (the rest of the top ten conservative states) 45% or higher. Conservatives outnumber liberals in even the most liberal-leaning states (excluding the District of Columbia): Vermont, (30.7% conservative to 30.5% liberal), Rhode Island (29.9% to 29.3%), and Massachusetts (29.9% to 28.0%).

Political commentators have long pointed to underlying social and economic sorting that underpins this growing conservative/ liberal divide.  But what factors account for the growing conservatism of Americans and American states?

With the help of my colleague Charlotta Mellander I decided to take a look. We ran a simple correlation analysis on the Gallup poll numbers, comparing conservative identification to a variety of key economic, demographic and cultural factors by state. As always, our analysis only points to associations between variables; we do not make any claims about causation and note that other factors that we have not looked at might come into play. Still, a number of intriguing findings cropped up.

Not surprisingly, states with more conservatives are considerably more religious than liberal-leaning states.  The correlation between conservative political affiliation and religion (the share of state population for which religion is an important part of daily life) is .63.

Conservative states are also less well-educated than liberal ones.  The correlation between conservative affiliation and human capital (that is, the percent of adults who have graduated college) is -.53.

States with more conservatives are less diverse.  Conservative political affiliation is highly negatively correlated with the percent of the population that are immigrants (-.59) or gay and lesbian (-.66).

Conservative states are more blue-collar.  Conservative political affiliation is strongly positively correlated with the percentage of the workforce in blue-collar occupations (.73) and highly negatively correlated with the proportion of the workforce engaged in knowledge based, professional and creative work (-.61).

States with more conservatives are considerably poorer than those with more liberals.  Conservative political affiliation is highly negatively correlated with income ( -.65) and even more so with hourly earnings (-.79). Columbia University’s Andrew Gelman’s influential book Red State, Blue State, Rich State, Poor State sheds light on this phenomenon. While rich voters trend Republican, Gelman and his colleagues found, rich states trend Democratic.

Conservatism, at least at the state level, appears to be growing stronger. Ironically, this trend is most pronounced in America’s least well-off, least educated, most blue collar, most economically hard-hit states. Conservativism, more and more, is the ideology of the economically left behind.  The current economic crisis only appears to have deepened conservatism’s hold on America’s states. This trend stands in sharp contrast to the Great Depression, when America embraced FDR and the New Deal.

Liberalism, which is stronger in richer, better-educated, more-diverse, and, especially, more prosperous places, is shrinking across the board and has fallen behind conservatism even in its biggest strongholds. This obviously poses big challenges for liberals, the Obama admiration and the Democratic Party moving forward.

But, the much bigger long-term danger is economic rather than political. This ideological state of affairs advantages the policy preferences of poorer, less innovative states over wealthier, more innovative, open and productive ones. American politics is increasingly disconnected from its economic engine.  And this deepening political divide has become perhaps the biggest bottleneck on the road to long-run prosperity.

“The bitter political standoff in Wisconsin over Governor Scott Walker’s bid to sharply curtail collective bargaining for public-sector workers ended abruptly Wednesday night as Republican colleagues in the State Senate successfully maneuvered to adopt a bill doing just that,” The New York Times reports this morning. “Democrats….condemned the move as an attack on working families, a violation of open meetings requirements….and a virtual firebomb in state that already found itself politically polarized and consumed with recall efforts, large scale protests and fury from public workers.” Rallies and demonstrations continue in the state.

As heated as it’s been, the rhetoric over unions is fast-approaching the boiling point; Wisconsin is just the beginning. The right accuses unions, especially public sector unions, of stifling economic competitiveness and putting state economies in the red. “The bottom line is we are trying to balance our budget and there really is no room to negotiate on that because we’re broke,” Scott Walker told George Stephanopoulos on Good Morning America. Or as Harvard economist Robert Barro wrote in the The Wall Street Journal: “Labor unions like to portray collective bargaining as a basic civil liberty, akin to the freedoms of speech, press, assembly and religion .…[but] collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty.”

On the left, unions are seen as a bulwark against falling wages and the decline of the middle class. “Collective bargaining didn’t cause the economic meltdown, and crushing unions won’t solve it,” Paul Toner, the president of the Massachusetts Teachers Association, protested in The Boston Globe. In a passionate defense of unions on the op ed page of The Washington Post, Yale’s Jacob S. Hacker and Berkeley’s Paul Pierson pointed out that unions “have resisted the rampant deregulation of financial markets and the soaring growth of executive pay. They have been one of the few organized voices that has consistently pressed back against the string of tax-cut bills for the rich that began in the late 1970s.”  

For all the sound and fury, neither side has adduced much hard data to support their positions. While there have been many studies of the effects of unions on corporate profits and productivity, surprisingly few assess their effects on state economies.  (One exception is a careful 1988 study by Harvard labor economist Richard Freeman, “Union Density and Economic Performance,” which finds that union density improves earnings and income, but exacerbates unemployment and hurts growth.) But that was over twenty years ago. And so, with my colleagues at the Martin Prosperity Institute, I decided to take a close look at current data and trends for unions across the 50 states.

For starters, there’s huge variation in unionization levels across the U.S. states (see map above).  Nationally, nearly 12 percent (11.9%) of workers are union members. New York touts the highest level of unionization in the nation, more than double the national rate at 24.2% percent. More than one in five workers are union members in Alaska (22.9%) and Hawaii (21.8%).  Unionization tops 15 percent in an additional ten states, and it’s above 10 percent in 14 more. Wisconsin ranks 17^th in union membership, less than 15 percent (14.2%) of its workforce are union members.

On the other side of the ledger, just 3.2 percent of North Carolina’s workforce is unionized.  Union members make up less than one in 20 workers in Georgia (4%), Arkansas (4%), Louisiana (4.3%), Mississippi (4.5%), Virginia and South Carolina (4.6%) and Tennessee (4.7%). While the conventional wisdom is that large numbers of workers are unionized in the Rustbelt states, that’s more of a myth than reality. Less than one in five workers in Michigan (16.75%) belong to unions. The rate is 15.5% in Illinois, 14.7% in Pennsylvania, and 13.7% in Ohio.

Unionization has fallen off massively in the past fifty years or so. Part of this is doubtless due to the transformation of the American economy from one that was primarily industrial to one that is more knowledge and service based.  Still the numbers are staggering (see the graph above).

Nationally, the percentage of union members declined by almost 20 percentage points (17.4) from 1964 to 2010. This drop has been much more pronounced in certain states, especially the older industrial states (see the map below).  Union membership fell by more than 30 percentage points in Indiana, from 40.8% to 10.9%; from 39.9% to 7.3% in New Jersey and from 36.5% to 4.6% in West Virginia. Ten additional states posted declines of 20 percent or more. Wisconsin saw its rate of union membership fall from 34 to 14 percent. And 25 others saw declines of more than ten percentage points.

All the posturing and sound byte-ready rhetoric aside, how do unions line up against key measures of state economic health?  Are more unionized states less competitive, as right wing critics would have us believe? Conversely, do unions provide a bulwark against unemployment and other adverse economic outcomes?

Relying on the steady statistical hand of my collaborator Charlotta Mellander, we examined the relationships between state unionization levels and key measures of state economies. As always, we remind our readers that correlation is not causation—we are simply looking at associations. Nonetheless, they tell a very different story than the ones you’re most likely to hear.

Unionized states are better-off economically than non-unionized states.  While it’s probably not surprising that unionization levels are correlated with higher hourly wages (.48), they are also correlated with higher incomes across the board—and the correlation between union membership and median income is substantial (.45). To put it baldly, unions are associated with the country’s economic winners, not its losers.   And it’s not that unionized states work more—unionization is negatively correlated with hours worked (-.36). States with higher levels of union membership work less hours per week but make more money—higher levels of union memberships are positively correlated with wage per hour (.48).

That said, unionization does not appear to mitigate the effects of inequality or to protect against unemployment, according to our analysis. There is no correlation whatsoever between union membership and income inequality. Union membership is not correlated with unemployment, either.

Unions are usually thought to go along with blue-collar working class jobs.  But that’s not the case either, at least for state economies.  Union membership is negatively correlated with the proportion of blue-collar, working class jobs in a state (-.48). This too is a likely consequence of the ongoing transformation of the U.S. economy. As manufacturing unions have declined, service and public workers unions have grown.

To that point, unionization levels are higher in states with more highly educated workforces and knowledge based economies. Union membership is moderately correlated (.3) with both human capital levels (the percent of adults with a college degree) and the share of the workforce in knowledge, professional, and creative jobs (.35). More surprising, unionization is even more highly correlated with the percentage of the workforce in artistic and culturally creative jobs (.53). This is not to say that artistic and culturally creative workers are more likely to belong to  unions (though some, like actors and musicians, do) but rather that states with more dynamic creative economies are also more likely to be highly unionized.  It’s also worth pointing out that unionization is more likely in states with higher levels of immigrants. Union membership is closely correlated with the share of adults that are foreign born (.42).

Unions continue to be a hot button issue in American politics despite the fact that the level of unionization has fallen precipitously over the past half century.  While many continue to think of unions as the province of blue-collar working class economies, less than one in five workers in Rustbelt states – Michigan, Illinois, Pennsylvania, Ohio—belongs to a union. Union states have more knowledge-intensive economies, boast more highly educated workforces, and have higher incomes as well.

The basic fact that unions are positively associated with so many key measures of prosperity suggests that their existence has little to do with state budget problems. Unions are not the cause of the serious economic and fiscal problems that are challenging so many American states, which are result of the economic crisis, collapsed housing market and massively reduced revenues. In fact, the economic influence of unions has been dramatically curtailed as a result of the ongoing transformation of the U.S. economy. At the same time, the existence of unions does not appear to be enough to forestall growing income inequality within the U.S. states.

It’s time to get beyond the angry, ideologically motivated rhetoric about unions. We need to put our fiscal house in order and buckle down to the serious business of generating good jobs; more than that, we need to reinvent the U.S. economy for this new age.

But are the same factors at work today as they were in past revolutionary surges? Some are undoubtedly similar – throngs of disgruntled people have taken to the streets, questing for freedom and economic opportunity.  Others, like the use of social media from YouTube to Facebook and Twitter, are undoubtedly new and different.  Do the unfolding events of 2011 fit with our existing understanding of revolution or might they warrant updating?

By far the most influential and infamous account of revolution comes from Karl Marx. In The Communist Manifesto, authored with his benefactor and collaborator Frederich Engels and published in the real 1848, Marx argued that that revolutions are an inevitable and necessary outgrowth of economic development.  The rise of industry and of an emergent capitalist class upended the old feudal order while ushering in a new more dynamic but inherently unstable capitalist system. As the capitalist class rises to new heights, Marx wrote, the working class is simultaneously expanded and immiserated, sowing the seeds of the next revolutionary impulse and its own demise.

Revolution = size of working class, exploitation of working class, working class consciousness and organization  (working class papers, trade unions, labor parties).

Many alternative accounts of revolution have been proposed since Marx’s day. In nations where capitalism emerged early, the rising bourgeoisie was able to secure a power base independent of the aristocracy and usher in a process of gradual democratization, according to Barrington Moore classic, The Social Origins of Dictatorship and Democracy. Countries whose economies developed later were more likely to undergo abrupt transformations. Students played a key role in the revolutionary uprisings of 1968; the same era saw the rise of the civil rights movement in the United States and of the women’s and gay liberation, environmental, and anti-war movements in the advanced nations.  These “new social movements” came to be seen a new driving force behind political activism.

The uprisings of 2011 however owe much of their impetus to the working class and labor movements as well as young people and students, according to the Middle East expert Juan Cole. Rising unemployment rates, stagnant wages and falling living standards prompted blue-collar workers to return to the barricades.

But a new generation of techies, social media types, and digitally savvy professionals have also played a visibly important role. Wael Ghonim, the Google executive who became the public face of Egypt’s uprising, is the veritable archetype of this Creative Class, spanning science, technology and engineering professionals, management and business executives, doctors, health care professionals and lawyers, as well as arts, culture and media workers.  In an emotional interview recorded immediately after his release from detention, Ghonim pointed explicitly to the role that Facebook and YouTube music videos played in Mubarak’s ouster. “We’re the youth who loves Egypt,” he declared, “And we did this because we love Egypt.” Intellectuals and artists as well as students have long participated in revolutionary movements, but usually in subsidiary roles. This time creative class members are part of the vanguard.

In identifying the creative class role, I do not intend to diminish the role of unions and various other political, religious and social movements that have driven this and other seasons of revolution. I simply aim to call attention to this key factor that has become increasingly salient to the surge of revolutionary activity occurring today.

Using data from the International Labor Organization, the map below charts the percentage of the workforce in the creative class in the Middle East and around the world.

The highest percentages of the creative class –in the range of 40 to 45 percent – are found in wealthy, advanced nations like the Netherlands, Singapore, Australia, Scandinavia, Belgium, Germany, the United Kingdom and Canada.  Egypt’s creative class comprises roughly a third (33.1%) of its workforce, on par with the United States (34.8%). Only Israel – where the creative class makes up 40 percent of the workforce – has a higher creative class share in the Middle East.  The creative class looms larger than one might expect, numbering one in five workers in Saudi Arabia (23.2%), the United Arab Emirates (UAE) (22%), Qatar (21.8%), Syria (21.8%) and Algeria (21.4%). These levels are higher than in the rapidly growing nation of Brazil (18.4%) and roughly triple that of China (7.4%), the world’s second largest economy.

Not all countries collect and report data on their creative class and other workforce categories. These figures are lacking for Iraq, Lebanon, Tunisia, Libya, and Kuwait in the Middle East, as well as several dozen other countries in the rest of the world.  So I also use another closely related measure that is more systematically available for a larger group of nations – the level of human capital – the percentage of the young adults engaged in post-secondary or “tertiary” education. This measure is closely related to creative class workforce (with a substantial statistical correlation of .75).

The map above shows the human capital levels for the Middle East and the world. The top ranked nations on this measure – Korea, Finland, the US, Sweden, Norway, New Zealand, and, perhaps surprisingly, Greece – have more than 75 percent of their young adults enrolled in tertiary education. For advanced nations like the United Kingdom, Canada, the Netherlands, France, Italy and Japan the figure is 55 to 60 percent. Israel is the highest ranked Middle Eastern nation on this measure (57%).  But several other Middle Eastern nations are also quite high, notably Libya (53%) and Lebanon (49%). Tertiary enrollment levels are higher in the West Bank (38%) and Jordan (35%) than they are in Hong Kong (34%). And tertiary enrollment levels are above 25% in Bahrain (31%), Egypt (29%), Tunisia (28%), and Saudi Arabia (27%).  Tertiary enrollment in Iran (24%) and the UAE (23%) are roughly the same as Brazil (23%).

Typically, creative class and human capital levels are very closely associated with economic development. Nations with substantial creative class shares and levels of high human capital tend to be among the richest in the world. But for many Middle East nations, the standard of living is lower than their creative class and human capital levels would seem to warrant. This gap is a signal of unrealized economic potential. It can help account for the pent-up social stresses that stem from a country’s inability to translate the talent, creativity, and ambition of its smartest citizens into greater levels of economic development and well-being for its citizens. This frustration is pronounced not just among those who are unemployed or locked in dead-end jobs, but also among those who do have flourishing careers with leading global organizations— Ghonim being a clear case in point.

With the help of my colleague Charlotta Mellander, I developed a simple metric to gauge this.  We created simple ratios, dividing the creative class percentage of the workforce on the one hand, and human capital levels on the other, by the level of economic output (GDP) per capita.

Revolution = size of creative class, the unrealized potential of creative class (ratio of creative class to GDP), creative class consciousness and organization (internet and social media access).

These measures are not perfect. Still, the results are intriguing and shed light on an important, heretofore neglected factor in revolutionary movements.

The map above shows the first of these ratios – the creative class to GDP ratio – for the Middle East and the world. Egypt ranks 7^th overall on this measure, with 33 percent of its workforce in the creative class and a GDP of just $1,620 dollars per person.  The West Bank-Gaza Strip ranks 6^th – with 24 percent of its workforce in the creative class and just $1,056 in GDP per capita.  Compare that to, say, Hong Kong, where the creative class numbers 34% and per capita GDP is $32,250, or Austria with its 35& creative class share and its per capita GDP of $25,940. The ratio is also considerable in Syria (22%, $1271), Algeria (21%, $2134), and Iran (16%, $2023).  But the worst ratios of all are found in nations outside the Middle East:  Kyrgyzstan, Moldova, Ukraine, Mongolia, and Pakistan. China’s ratio is about the same as Croatia’s, Slovakia’s and Jamaica’s.  This measure does not capture everything.  The UAE, Qatar and Bahrain, which has been the scene of significant unrest, all register relatively small ratios.

The map below charts the second of the measures, the ratio of human capital to GDP, for the Middle East and the world.  Several Middle Eastern nations post high ratios – West Bank-Gaza Strip (39% human capital, $1,096 per capita GDP), Egypt (29%, $1,617), Jordan (35%, $2249), Tunisia (28%, $2526), and Iran (24%, $2,023).  While Iraq has a much lower level of human capital, its ratio is also quite high (15%, $681).  Lebanon, Tunisia, Algeria, Libya, and Morocco post moderate but still considerable ratios. As with creative class share, the worst ratios are found outside the Middle East, in Kyrgyzstan, Tajikistan, Moldova, Mongolia and the Ukraine.

China ranks 53^th about the same as Uganda, Colombia and Tunisia.  As with the creative class ratio, this measure has its limits.  Qatar, Kuwait, the UAE and Bahrain all register relatively low ratios.

I don’t pretend that these measures offer a comprehensive theory of revolution. Revolutions are infrequent and relatively unique events, each of them the products of many interacting social, political, economic, and cultural forces, as sizeable literatures in history, comparative sociology, and political science have documented  (Daniel Little summarizes some of this literature, notably the seminal Dynamics of Contention by Doug McAdam, Sidney Tarrow and Charles Tilly, over at his blog Understanding Society). And then there are nations like Bahrain, where revolutionary uprisings occur alongside relatively high levels of wealth: Money, after all, does not necessarily buy happiness, contentment, or freedom.

Americans may have an allergic revolution to the notion of class, but it’s time to put it back at the center of the conversation about revolution.  The working class has certainly played a much larger role in the Middle East uprisings than is commonly credited, but so too has the digital savvy, social media skills, and activism of the creative class.

Alongside the creative class and human capital, there is one more factor that plays a key role both in revolutionary unrest as well as economic development.   In my next post, I take a close look at the role played by cities, urbanisation and geographic proximity.

We all know Lady Gaga as a singer, dancer and performer.   But in the last two years, she’s climbed from just an entertainer to a monster endorser and creative visionary.

According to CCG’s very own CEO Rana Florida,

She [Lady Gaga] has changed the way endorsement deals work. She’s putting more of her influence, thought and creative energy into a line rather than just endorsing them. She has been able to successfully marry music, fashion and culture, making her a truly visual maven. She is her own movement.

Read more about Lady Gaga’s influence  at CNN International.

Is Lady Gaga the first artist to truly exemplify the qualities of the creative class?  How has she leveraged the 3-T’s: technology, talent and tolerance to build her brand  and influence?

My colleague Derek Thompson takes on Paul Krugman’s contention that the Texas miracle was a mirage in his comment “Is Texas Special?” Challenging Krugman’s notion that the state’s deficit undercuts the advantages it derives from its population and economic growth, Thompson notes that, when it comes to Texas – and you can say this for just about any kind of economy – it is structural factors rather than short-term policy fluctuations that ultimately matter. “Whether or not Texas has cultivated a uniquely successful business environment at the state level,” he notes, “it’s pretty clear that many of Texas’ largest cities are uniquely positioned to withstand the recession. As a general rule, the cities that survived the recession avoided the housing boom and clung to strong government-backed sectors, like health care, higher education, and military.” Six Texas metros number among the country’s 20 best-performing regions, according to research and rankings by the Brookings’ Metropolitan Policy Program, he adds.

Thompson has it right. Texas is a state that is defined by big strong metros. It began investing in its superb state university system a long time ago, which distinguishes it from many other Sunbelt states. It has used its natural resource endowments not as a crutch but as a mechanism for investing in technology and economic transformation. Many of its big metros have high human capital levels and high levels of the creative class. When I did the original analysis for the Rise of the Creative Class, I was struck to find three Texas metros among the country’s top 10: second place, Austin; seventh place, Houston; and 10th place, Dallas. On top of that, Texas has two giant mega-regions, Hou-Orleans and Dal-Austin, that some analysts suggest actually constitute one gargantuan mega-region – The Texas Triangle, home to more than 20 million people and producing $700 billion in economic output, making it the fifth largest in the U.S. and 10th largest in the world.

Krugman may be right that Texas’ “conservative theory of budgeting” is hurting its short-term prospects. As former Houston Mayor Bill White notes, the state very much needs to continue – even expand – its investments in research and higher education. But the state has the economic and geographic fundamentals that can counterbalance short-term policy changes and lay a solid foundation for long-run prosperity.

Wendy Waters comments on my Atlantic post on the Tucson shootings and the culture of honor.

I went to grad school in Tucson. Loved the city and region in so many ways. Gun violence perpetrated by the mentally ill was something that this Canadian found hard to get used to.

Although last week’s incident had more human victims, my sense from living there was that it wasn’t unusual to have someone suffering from a mental-illness issue wandering public places with a loaded gun.

One incident at the U of Arizona while I was there involved an individual walking into the grad student computer lab (at a time when I was usually there, but thankfully wasn’t this time), opening fire, missing all the people but destroying two computers, and then wandering down the main campus waving his gun before police grabbed him. It was never clear why he did this (hearing voices, maybe). Subsequent investigation revealed he had long been in treatment from mental illness, but that this did not prevent him from purchasing the firearm legally the previous week because mental health records cannot be used in background checks.

Yes this story is anecdotal but maybe the answer to why certain people in certain places commit these mass murders is a combination of less help for the mentally ill combined with slightly easier access to weapons.

Fiat is looking to follow Mini’s lead when it comes to customization for consumers. “The personalization is something that customers want.” The design centers inside the dealership will be a lot like the ones you’d find in a new subdivision, with lots of choices. “Those are all of the different 14 interiors, exteriors,” Soave said, “but you can mix and match, and that’s part of the deal.”  … these design centers are not strictly up-sell areas. Depending on the shopper, though, they can be.

The full story is here.