Creative Class

Here’s a map of job creation from The Gallup Organization. It’s based on approximately 100,000 Gallup Daily tracking interviews conducted throughout 2009 with employed adults in all 50 states plus the District of Columbia. It provides a clear picture of the evolving economic geography of The Great Reset.

On the losing side of job creation, Rustbelt states, especially Michigan and less so Minnesota, continue to be hard hit, along with the “housing-crash” states of Nevada, California, and Arizona. Northeastern states -  Rhode Island, Delaware, New Jersey, Connecticut, and New Hampshire – also fare poorly. In the west, Oregon and Idaho also see low rates of job creation.

The best-performing states in terms of job creation are energy economies – North Dakota, Louisiana, West Virginia, Oklahoma, Texas, Alaska, and New Mexico, as well as Nebraska; and those with economies that benefit from federal spending, Maryland, Virginia, and D.C. More here.

It’s terrific to see unemployment rate dip below the 10 percent mark. But, unemployment in the Great Reset remains quite a bit deeper than in previous ones, as the NYT’s Catherine Rampell shows. The overall U-6 measure of unemployment – which includes discouraged workers – stands at 16.5 percent.

A close look at the numbers finds some groups are doing far better than others. Men continue to fare substantially worse than women:  The unemployment rate for adult men remains 10 percent, while the rate for women is now 7.9 percent.

The effects of the economic crisis continue to be extremely uneven. Unemployment remains much higher for the less educated. The unemployment rate for workers without a high school degree, 15.2 percent, is 50 percent higher than that for workers with a high school diploma, 10.1 percent, and three times higher than for college-educated workers, 4.9 percent.

Unemployment also varies substantially by industry. The unemployment rate for blue-collar workers remains quite high. The unemployment rate for manufacturing workers stands at 13 percent while construction workers face a staggering 24.7 rate. The rate for professional services workers has grown to 11.1 percent, but financial professionals have unemployment of 6.6 percent.  The rate for educational professionals stands at  5.5 percent, and that for government employees is 4.3 percent.

The Toronto Community Foundation released the latest edition of its annual Vital Signs report. The report finds Toronto to be weathering the Great Reset in relatively good shape with relatively high levels of creativity, innovation, and wealth. But the report also finds that Toronto is becoming more segmented and unaffordable – reflecting the spiky nature of development that affects all global centers. Check out the full report here.

Richard Florida will appear on ABC’s 20/20 speaking with Dan Harris on the economic crisis and the “New Normal.” The interview will air June 19.

Below are two photos of the taping in the show’s Manhattan studio.

Tune in and tell us what you think of the interview!

The Next American City’s Josh Leon reacts to my March Atlantic essay on cities and the crisis:

[N]ot everyone can afford to move and the poorest are left behind amidst urban blight and neglect. What do we do about the immobile? What do we do with cities that are net losers of the “creative class”? For this so-called creative brand of capitalism, the uncreative are someone else’s problem …There is an inherent inhumanity in leaving people and their cities in the dust. Besides, the cost of finding ways to get so-called obsolete classes of workers gainfully employed where they live is looking preferable to the social costs of managing huge ghost cities and permanent spatial inequality.

All sentiments I share. The first step – and the main point of my essay – is to elevate the issue of growing geographic inequality and bring it into the ongoing conversation about the crisis and recovery.

But what can be done? How to create whole new industries and jobs in declining places? Protecting old industries or baling out uncompetitive firms – two preferred solutions – make little economic sense. So what’s left?

We can confer subsidies on places to improve their infrastructure, universities, and core institutions, or quality of life. But this still is unlikely to stem the tide of the talented and the mobile, at least in the short-run. We can take a longer-term approach and help them gradually shift away from declining industries and build around their remaining assets organically and over time.

At the end of the day, people – not industries or even places – should be our biggest concern. We can best help those who are hardest-hit by the crisis, by providing a generous social safety, investing in their skills, and when necessary helping them become mobile and move to where the opportunities are.

The Freakonomics blog in the New York Times has a brief article (and a spirited discussion section) considering how people’s spending patterns might adapt to changes in income. While the conjecture about which products and services might be more or less income-elastic is certainly interesting, the first two paragraphs contain two very curious words which add up to a pretty big unchallenged assumption: “presumably,” as in “a (presumably) temporary decline in income during the recession; and “the short run.”

In the short run, Daniel Hamermesh is probably right: lots of things get short shrift when income shrinks, including his list of “postponable luxuries” like plastic surgery, participation in the Austin Marathon, and pediatric visits (not my idea of a postponable luxury, but to each his own). But I am not convinced that we’re in a short run situation at all, and that we are witnessing the presumptive temporary decline in personal income.

This may not be a recession. We may be in Act I of The Great Reset. If we are in a recession, the standard economist playbook holds. If we are in uncharted waters, all bets are off.

So, what do you think? Is this a permanent or temporary setback? What are you you postponing, or planning to forego entirely?

The crash of 2008 continues to reverberate loudly nationwide—destroying jobs, bankrupting businesses, and displacing homeowners. But already, it has damaged some places much more severely than others. On the other side of the crisis, America’s economic landscape will look very different than it does today. What fate will the coming years hold for New York, Charlotte, Detroit, Las Vegas? Will the suburbs be ineffably changed? Which cities and regions can come back strong? And which will never come back at all?

That’s from my article, “How the Crisis Will Reshape America” from the just-released March issue of The Atlantic. It’s my first full-length feature for the magazine and I’m delighted that it made the cover. There are actually several different covers including one for New York, Chicago, and my new hometown of Toronto, among others.

There’s also an interview with me online here under the title, “The Great Reset,” which is the working title of the book I’m developing.

Plus a series of interactive maps based on research and data analysis by our team at the Martin Prosperity Institute.