Andrew Sullivan points to Ed Glaeser’s Economix post on the geography of unemployment and finds a common thread: “Edward Glaeser compares city to city unemployment numbers and affirms Richard Florida’s thesis.” Glaeser writes:
While the disparity in unemployment rates is enormous, it isn’t random. Some areas aren’t just miraculously better able to handle the downturn. Long-standing features of the urban landscape can explain the bulk of the variation in today’s unemployment rates.
Given the enormous gap in unemployment between skilled and unskilled workers, it isn’t surprising that skills best explain today’s metropolitan unemployment rates. The share of adults with college degrees in 2000 can, on its own, explain about one-half of the variation in the unemployment rate.Somewhat remarkably, the educational level of the metropolitan area before World War II can do almost as well.
Here’s his scatter-plot.
Source: Edward L. Glaeser, via Economix
Glaeser also finds that regional unemployment is “strongly linked to manufacturing.” Here’s his plot of the correlation between current unemployment and manufacturing’s share of the labor force in manufacturing in 1970.
Source: Edward L. Glaeser via Economix
Regional unemployment is also related to density, finding that “unemployment is lowest in those areas that are most centralized.” Sprawling places appear less resilient economically.
Source: Edward L. Glaeser via Economix
His conclusions: invest in skills and human capital; “beware industrial policies aimed at keeping America tied to heavy industry;” stop trying to breathe life back into declining regions; and encourage mobility.
While the regional diversity within the United States might prompt politicians to pursue policies that target aid to distressed regions, that seems likely to be counterproductive. America has always dealt with regional economic disparities through migration. … Today’s recession will also prompt mobility, probably toward more skilled, more centralized cities with less historical commitment to manufacturing.”
I could not agree more. Our urban policy, such that it is, is decidedly backward looking. It’s high time urban policy focus on leveraging the three key things – mobility, density, and human capital accumulation – that are real engines of prosperity.
March 25th, 2009 at 12:03 pm
What I find interesting is that the city Richard singled out in his Atlantic piece to be hit the hardest – Phoenix – is actually outperforming some of the “Creative” economies like Seattle, at least in terms of unemployment. Any response?
March 26th, 2009 at 10:53 am
Curt,
It’s a good question, but I think it’s way to early to issue a verdict on Richard’s predictions.
The collapse of manufacturing places has been decades in the making. The second graph seems to suggest that places like Flint, Hickory, Detroit, and Grand Rapids got “locked in” to manufacturing in the 1970’s, and haven’t gotten off of their previous trajectories yet. If we are to see a collapse of the “growth without growth cities” : Phoenix, Fullerton, Las Vegas- than surely it wouldn’t happen in a few years.
Also. unemployment is only one measure for decline. Phoenix’s growth has already started to reverse- and i would guess that alot of the people who left were highly mobile construction workers who went back to their place of origin. Housing prices are, of course, way down and I don’t think they will ever rebound to their previous highs. Water is still scarce. The border region is increasingly unstable.
I don’t think Phoenix is fated for decline. It can still bolster its connections to other places, boost densities, invest in human capital etc. But at this point, why would you bet on phoenix?