Creative Class

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.

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Ever since Hannah Rosin’s Atlantic essay “The End of Men” there has been great speculation about the effects of the ongoing economic crisis – as well as the broader, longer running economic transformation that the recession is part and parcel of – on the relative economic positions of men and women. Some have even gone so far as to dub the current crisis the “mancession,” though male employment appears to have turned up sharply over the past year..

Alex Tabarrok’s insightful post at Marginal Revolution bears on this issue. Take look at the two charts below from his analysis. The first compares the rate of growth in real economic output (GDP) per capita to median male income for the period 1947 to 2010.  The second does the same for women.

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Investment in single family homes has done some serious cliff diving.

(Image via Calculated Risk).

With GDP falling at a “hefty” 6.1 percent annual clip, Harvard’s Jeff Frankel parses the data:

The previous record-holders were the recessions of 1973-75 and 1981-82, each of them four quarters in length according to the official NBER chronology. In the current downturn, the NBER’s Business Cycle Data Committee determined that the economy peaked in the 4th quarter of 2007…  The NBER also keeps a more precise monthly chronology. The postwar record is 16 months, again shared by the 1973-75 and 1981-82 recessions. To match this monthly benchmark, the current downturn would have to have continued into April. Our best single indicator as to whether it did so will be the employment number to be released by the Bureau of Labor Statistics next Friday, May 8. It almost certainly will show that there were further job losses in April. If so, it will further confirm the dismal conclusion: one would have to go back 80 years, to the disaster of 1929-1933, to find a longer recession.

Last week, we looked at what makes for happy states. One thing that stood out was that states with larger concentrations of the working class had lower levels of well-being.

So, we decided to take a closer look at the relationship between the working class and several key indicators of state wealth and well-being.

What we found is striking  – and frankly troubling. States with large concentrations of working class jobs had lower levels of income, GDP per capita, and well-being – pretty much everything across the board.

There were significant negative correlations between states with a large share of working class jobs and three of the five component indices in the Gallup well-being index: healthy behavior ( -.65), physical health (-.42), and life evaluation (-.31), as well as for the well-being index overall (-.51).

The pattern was similar, even worse, when we looked at the relationships between the working class and GDP per capita (-.51), income (-.69), human capital levels (-.71), and housing prices (-.62).

So maybe it’s time to think twice when we hear how important it is to save “good” working class jobs.  Individually, that may well be the case. Some of these jobs pay very well, and lots of people who lose them may find it difficult, perhaps impossible, to find similar work at their pay levels

But from the point of view of society and economic development broadly, it’s important to recognize that states with large concentrations of working class jobs do very poorly in terms of wealth and well-being.

These findings distress me personally. Looking them over and over, I found myself thinking back to advice  my father – who spent more then 50 years as a worker in a Newark eyeglass factory – gave my brother and I long ago. “Boys,” he said, ”I do this so you won’t have to. That’s why you have to stay in school, study hard, and go to college.” I understand much better now what he was driving at.