Economic inequality has been mounting in the United States, hitting levels not seen since the Gilded Age. There are numerous explanations for this phenomenon, ranging from the decline of unions and high-paid manufacturing jobs to the rise of globalization, of new technology, and knowledge-based work (what economists call “skill-based technical change”) and the bifurcation of the labor market into high-skill and low-skill jobs.
But do our cities and changing economic landscape play a role as well? There are good reasons to suspect that they do. For one, the past decade or so has seen a sorting of population by skill, occupation and human capital, (see my 2006 article “Where the Brains Are”). For another, it is well known that both highly skilled and talented people and productive firms and high-tech industries tend to cluster and agglomerate together to create powerful economic advantages.