
Big Cities No Longer Deliver for Low-Skill Workers - pseudolus
https://www.bloomberg.com/opinion/articles/2019-01-22/u-s-economy-big-cities-no-longer-deliver-for-low-skill-workers
======
netcan
" _middle-class life to those without a college degree_ "

Anytime you start delving into what has changed for a subset of people, over
decades, the most important piece of the puzzle is decided ding who qualifies
for the subset.

I mean concepts like "middle class" or "without a college degree."

A lot more people get degrees, in 2018. Does the graduates/nongraduates
segment still represent a comparable group of people?

Human capital theory that recommended this explosion in tertiary education
assumes/d it does. College makes you more productive. Make everyone go, get
productive and earn more.

It turned out, college was partly a proxy for class. What college grad
earnings in the 60s was actually saying is that upper-middle class kids grow
into upper-middle class adults.

...at least partially.

I certainly agree that a lot of cities are too expensive for the average
person. But, I don't think that you can take education in 1960 and 2018 and
treat the populations as similar.

I'm also dubious about college as a proxy for skill, in the skilled labour
sense. A lot of college is very general education, with even less focus on
marketable skills than high school.

~~~
Bucephalus355
You make very good points above.

I really enjoyed college, especially my liberal arts classes.

That being said, with AWS Certs going for between $75-$300 how long do
colleges think they can survive?

If you were a 22 yr old who studied from zero-level computing knowledge for 12
months and got the AWS Solutions Architect Pro cert (somewhat possible
assuming 2 hours / day) I can already guarantee you’d receive a written offer
for 100k plus within days from my current company (in Texas so that’s quite a
bit of money).

Again don’t think colleges are going to compete well against that.

Last thing, here in Texas high schools can now issue Associate Degrees
usually. Also the whole model of high school has shifted from test-focused to
job-placement focus. Starting this year you can get an Associates in
cybersecurity out of high school...

~~~
irrational
"That being said, with AWS Certs going for between $75-$300 how long do
colleges think they can survive?"

Colleges shouldn't be in the business of training people for jobs - that is
what tech schools are for. If you just want to get a job, go to a tech school,
don't go to college. College is (or should be) about expanding your mind, your
horizons. It should be about exposing you to new ideas and thoughts you hadn't
been exposed to before. There is a reason why University and Universe have the
same root.

~~~
tzs
Letter from John Adams to Abigail Adams, 1780-05-12:

> I must study Politicks and War that my sons may have liberty to study
> Mathematicks and Philosophy. My sons ought to study Mathematicks and
> Philosophy, Geography, natural History, Naval Architecture, navigation,
> Commerce and Agriculture, in order to give their Children a right to study
> Painting, Poetry, Musick, Architecture, Statuary, Tapestry and Porcelaine.

~~~
bovermyer
What proportion of Americans now have the ability to study topics of less
directly monetary connections as compared to those of Adams' day?

I imagine the answer to that question would be interesting and nuanced.

~~~
WillPostForFood
There were only a ~dozen colleges at the time, and women couldn't attend. 90%
of colonists were farmers. I don't see where there can be much nuance.
American's today have vastly more ability to study a bunch of nonsense.

~~~
bovermyer
So narrow the lens a bit - compare only those with the ability to attend
university.

------
wonderwonder
The top 1% of American's own more wealth than the bottom 90% and this
concentration is only increasing. Soon no cities regardless of size will
deliver for low skilled workers as there will simply not be enough of the
proverbial pie to go around. As wealth is concentrated and rents and property
values rise the vast majority of this country will (does?) live paycheck to
paycheck. This is unsustainable and will either need to be addressed or we
will be living in a very real dystopia.

Add the very real prospect of social security collapsing and we have a good
setup for the streets being filled with homeless and vast portions of the
population failing simply because there was just not enough money to go
around.

~~~
alkibiades
“not enough money to go around”

Where do people get this strange idea that if someone else makes money it
somehow precludes others from doing it? Bill Gates got rich with an invention
that also generated probably a trillion dollars in economic growth for
everyone. Including most people on this sites income.

~~~
peisistratos
> if someone else makes money it somehow precludes others from doing it?

There is an easy way to see that and it is if the median inflation-adjusted
hourly wage has risen in the US since the early 1970s. Or if inflation-
adjusted weekly earnings have risen. They have not, with GDP growth, both have
_fallen_.

That this even has to be discussed shows the deep control those heirs who
expropriate surplus labor time from workers have over discourse, the media,
forums like this (run and controlled by an accelerator) etc.

Workers create wealth at a mature company. Some of that pays the electricity
bills etc., but then the rest goes to either dividends to the heirs, or to
wages. That is the "preclusion". The heirs expropriate the profits of the
surplus labor time from the workers creating the wealth. They are shorted on
their wages. Sometimes this is explicit like the cabal between Steve Jobs,
Eric Schmidt that came out in the lawsuit.

Insofar as Bill Gates and invention - it takes a hell of a lot of gullibility
to swallow the fantasy you concocted. Kemeny and Kurtz created BASIC. Gates
hacks into a military research computer at Harvard and steals computer time
from it according to Paul Allen's book (and Harvard admin found out and had
proceedings) - they port BASIC to the Altair.

Then IBM comes to Microsoft. IBM got wealthy with computers on taxpayer funded
government contracts and a monopoly which was lightly overseen. Gates's mother
is on the United Way board with IBM CEO Opel who helps makes this meeting
happen. Microsoft sells Seattle Computer Product's Qdos to IBM (Gary Kildall
said it was a complete ripoff of his Drdos). A purchased ripoff of another
product, sold thanks to family connections. So much for "invention".

At times like the current one, with real wages falling since the early 1970s
despite economic growth, that this is even discussed is a sign of how the
heirs have bought and paid for the narrative as well.

~~~
smokeyj
If someone invents a tool and sells it for a profit - who was exploited? Is it
not possible for everyone to be richer than they started and also create
wealth??

The question was really simple. Your answer is the kind that inevitably ends
with "you just have to read Das Kapital". That is _not_ an answer.

~~~
peisistratos
> If someone invents a tool and sells it for a profit - who was exploited? Is
> it not possible for everyone to be richer than they started and also create
> wealth??

As I said, when, after the electricity bill etc. is paid, created wealth is
split between dividends to heirs and wages to those who worked and created the
wealth.

If in your hypothetical situation there is no split - if the person who worked
and created wealth keeps everything - there is no expropriation.

The expropriation is the last few hours of work he does, of the wealth he
creates - none of it going to him, the one who created the wealth and did the
work. All of the profit going to the heir. But if there is no split, this
expropriation does not happen.

~~~
hoaw
I never understood why people are so casual about inequality. To put it
bluntly a lot of people will eventually, if not already, be working something
like three quarters of their lives for society, a company and a land owner.
And only one quarter for themselves.

------
motohagiography
I find the tone of articles like these to be patronizing.

Let's be clear, the hollowing out of rural economies is a direct and explicit
effect of trade policy, and not some accident of economics and markets.

The precise dynamic in this article is that where previously cities provided
capital and farms provided food, with a spectrum of services in between - with
globalization, cities no longer depend on their regional rural partners, and
can meet demand for food and goods using cheap international suppliers,
financial flows of hot money, and massive debt funded deficits.

Unskilled labour and manufacturing don't have a problem when countries enact
policies with a national interest because tariffs and anti-dumping rules
create a price preference for nationally produced goods and services.

It has almost nothing to do with the skills or qualifications of rural
workers. This is policy. The Bloomberg author's false lament for these "left
behind" workers is nothing but sanctimonious cant.

edit: tl;dr: what's more likely to prevail, a system of globalization or the
interests of rural people? I know where I will place my bet.

~~~
cwbrandsma
Trade policy? Lets start with some basics here: farms are getting larger, and
there is no longer available farm land that wasn't already converted to farm
land. That happened a long time ago, before me anyway. Farmer Jo has 4 kids
and one farm. That farm only produced enough income for one family to live on,
if they are lucky and expanded, maybe two. So Farmer Jo + One kid and family.
All the other kids have to go elsewhere. You go look in town (maybe 5000
people in a good healthy farm town), and the jobs there are bleak as well.
Cook, mechanic, hardware store, etc. Or you enter the trades: plumber
electrician. But in small towns, there is still only so much room for them.
These small towns have a form of "max capacity". So most of the kids move way.
Out of four, on average 2 kids will stick around, but not enough for the town
to "grow". Keep in mind, not every farm kids wants, or is cut out to perform
farm labor.

Again, why do the kids leave? The town economy is based on farm economics, and
is limited by the availability of land. Once the land is taken, the town will
stop growing. And farm income is not what you call "stable" either, so the
town goes thru a lot of boom and bust cycles. Infrastructure levies take a hit
if you are talking about multiple years of taxes, simply because the farmers
don't know what next year's income will look like.

Do you need to flee to the city? Depends on what you call a city. There is
probably a neighbor town with +20,000 people in it. We call them cities around
here (examples: Twin Falls Idaho and Algona Iowa.) In those vast metropolises
you can work produce factories, car dealerships (the small towns don't have
them), and other areas.

Source: I'm a farm kid with an older brother, from a small farming town in
southern Idaho, and most my friends are former farm kids as well. My dad gave
me the "talk" in high school, he knew I wouldn't make a good farmer. And those
who stuck around are often not the lucky ones. They are just trying to hold
on. (was not a fun heart-to-heart with my brother last night who thinking hard
about selling out and becoming an EMT after 30 years of farm life).

~~~
ruralqs
I don't think GP's distinction between cities providing capital and rural
areas providing food is really the line drawn by the article, or typically
when comparing regional inequality. For example, the article notes that CoL
adjusted average income is greater in Beaumont, TX and Birmingham, AL than NYC
and SF.

Automation probably is what has caused farm unemployment, but trade policy can
absolutely be blamed more for manufacturing unemployment in areas that aren't
"big cities". The Syracuse or the Altoona metro areas aren't exactly farmland,
but they definitely aren't NYC or SF, either.

------
rossdavidh
This article reads like it was written in 1990. Two points: 1) their own graph
shows manufacturing employment started going back up in about 2011, and has
continued to do so, which seems like an odd thing not to comment about given
that it is counter to the entire thesis of their article 2) it has been pretty
well demonstrated in the last couple years that college degrees became
required for a job in recent years because employers had the option of
requiring it, not because it was actually necessary, and as the labor market
has tightened the requirements have been relaxed. The supposed "skills gap"
was at least partly (perhaps largely) about HR departments using college
degree as a proxy for class, and also just a way to cut down the huge stack of
resumes to a manageable number.

I think Blooomberg's audience is nervous that the recent resurgence in
manufacturing, and the recent increase in the percentage of the population
working, are undercutting their narrative of "it's automation, there's nothing
we can do".

------
swampthinker
My tinfoil hat theory is that this is being caused by the increasing
concentration of wealth. Which is being enabled by increasing levels of
automation and efficiency.

~~~
slededit
US worker productivity growth has been extremely limited over the last 15
years. Simply put the economy isn’t that efficient relative to population
growth.

What has happened is massive growth in drug prices, housing, and other non-
productive areas of the economy. Rent seeking is rampant.

~~~
peteey
Agreed, and the increased prices are for existing drugs. We are not seeing an
increase in cost due to innovation. Price increases are caused by companies
charging more year after year for the same pill.

~~~
crankylinuxuser
These companies are granted monopoly status on a compact with the Citizens and
US government.

If they break this compact, I see no reason to protect their patent. Eminent
domain is a thing. Lets use it.

------
40acres
The bar for "low-skilled" is rising not only due to globalization but
automation. In a way, this seems correct -- in a growing economy you shouldn't
really be able to carve out a middle class lifestyle pushing a lever for 50+
years.

If the economy is growing and innovation is taking it's course the low hanging
fruit will eventually be clipped, the "gig" economy actually has the trend
right in terms of the next "middle class" job for "low skilled" workers being
involved with augmenting data driven services and services in general.

The place where the gig economy falls short is of course regarding stability
and benefits, I don't know if it's the governments place to step in here or a
new model is required from these human augmented data services, but we're only
at the beginning of the economy being fundamentally transformed by data.. and
there are still many areas where automation and AI is not good enough..
perhaps this is where the low skilled middle class earns its next income.

~~~
downrightmike
All this happened before. 1920's people were competing for fewer and fewer
temp jobs. We call them gigs, but this is just part of the crash. Hopefully it
won't be as bad and we won't need a world war to come out of it.

------
drawkbox
New business idea for transportation: HeliHelp.

HeliHelp flies in low skilled workers via helicopter, quicker than commutes
and allows you to keep paying "market wages" that don't allow employees for
retail/restaurants/etc to live anywhere near the place of upscale upperclass
community where you need your employees to be during work. Fly them in, then
fly them out, way out. HeliHelp is not only an expense, but it can be part of
your employees "real compensation" to further not give any sort of wage
increase.

"HeliHelp: Better to buy a helicopter than to pay above market wages" /s

 _On a serious note_ :

Workers share of GDP has been in constant decline since the 70s [1].

Velocity of money is at all time lows and off a cliff [2].

Household income has been normalized, sideways [3]. Middle class is not
getting richer but flat.

Those are signs that wages are not growing as fast as they could or should. A
better economy comes when more people have consumer spending supply and that
increases demand across the board. Demand brings investment.

Wage increases have essentially been efficiently worked out of the system, and
at a certain point that is a more stagnant economy than we could have which
affects lower, middle and upper classes.

Wealth does not spend enough to fuel an economy, you need the middle and lower
to be consumers that have demand, with money in their pockets before the rich
will invest.

Middle class is still getting pummeled and nothing has changed.

[1]
[https://fred.stlouisfed.org/series/W270RE1A156NBEA](https://fred.stlouisfed.org/series/W270RE1A156NBEA)

[2]
[https://fred.stlouisfed.org/series/M2V](https://fred.stlouisfed.org/series/M2V)

[3] [https://fredblog.stlouisfed.org/2016/12/the-puzzle-of-
real-m...](https://fredblog.stlouisfed.org/2016/12/the-puzzle-of-real-median-
household-income)

~~~
seizethecheese
Should middle class wages keep increasing relative to everyone else forever?
That’s clearly an absurd scenario. Middle class wages increased substantially
comprared to upper class in the 50s and 60s. “Stagnating” could also be seen
as “holding on to gains”.

~~~
drawkbox
> Should middle class wages keep increasing relative to everyone else forever?

Yes if you want to keep a middle class.

In a consumer economy that requires growth, demand has to be there for
investment. One way to achieve demand is people have more money to buy things
in a consumer economy and their earning outstepping household inflation which
is higher than macro inflation. Ultimately the middle class has been on a
downward trend if flat due to higher household inflation.

Inflation is a macro level number. Household/family inflation is more than the
macro inflation number on the whole economy i.e. housing/rent, food, gas,
tuition/education, healthcare, etc are all higher inflationary items than
other indicators which pull it down across the economy but not for many groups
[1], especially middle class that gets the weight on their backs on
healthcare, tuition and more due to no subsidies or higher pricing because
they make more.

Just because inflation on the macro economy didn't go up too much, doesn't
mean family/household/individual inflation isn't higher and too much at the
same time of wage stagnation [2][3]. Flat since 2000...

Middle class is shrinking because wages are not outstepping inflation relative
to their needs. That isn't relative to everyone but an overall downward trend
for middle class. While lower and upper classes are up they will also stagnate
if that trend continues.

Middle class wages and breaks need more help than ever right now due to
inequality and very little policy or the market helping middle class handle
the weight that the lower and upper class put on their backs. Middle class
consumers support local economies and return most of their money back to the
market/economy, wealth does not. Middle class is also mostly the longs of the
public stock markets in terms of investments and retirement accounts. The
trend of a middle class disappearing cannot continue or the system breaks and
the public markets will also probably break, that affects everyone including
the wealthy.

More people can buy your product and invest in your company if they have cash
money to do so.

[1] [https://ritholtz.com/2016/08/inflation-look-right-
places/](https://ritholtz.com/2016/08/inflation-look-right-places/)

[2]
[https://fred.stlouisfed.org/graph/?graph_id=195323#](https://fred.stlouisfed.org/graph/?graph_id=195323#)

[3]
[https://seekingalpha.com/article/4111556-august-2017-median-...](https://seekingalpha.com/article/4111556-august-2017-median-
household-income)

------
pointillistic
In fact traditional industries had many workers that were "high skilled"
craftsmen. They might not had a degree but were "high skilled". It is these
craftsmen that were systematically replaced in the market by the low skilled
labor, often immigrant labor.

------
dsfyu404ed
>an economist at the job-search company Indeed, finds that when salaries are
adjusted for local costs of living, the average worker actually makes less in
New York City or Los Angeles than in Toledo, Ohio or Birmingham, Alabama:

Particularly impressive considering that the "average" for NYC, LA, SF
includes a lot more very high salaries than Toledo and Birmingham (Google, FB,
etc are not hiring hordes of SREs making six figures in the latter).

~~~
threwawasy1228
I was just doing this calculation the other day, for a bit of background I am
in an area of the Midwest, close to Toldeo and am graduating in May.

I interned in NYC last summer and sublet there. So I was trying to decide
whether to move out that way or stay in a smaller Midwest city to start my
career in.

When you factor in cost of living, rental costs, junior level developer
salaries, taxes, and transportation costs. I found that I would need to make
around 20k more than the average junior level developer salaries for NYC
(according to the estimates I've been seeing listed on Glassdoor) to get as
much take home pay after expenses as I will make staying in the Midwest for
less pay.

I assume (and plan on calculating this) that you could easily generalize this
to most cities in the Midwest with a minimum of 500k people.

~~~
dsfyu404ed
I went from living in the city and commuting via rail, walking to the grocery
store, etc, etc to owning a house an hour out of the city, commuting via car,
etc, etc.

The mortgage payment is about the same as my rent. Even after all the
additional costs of home ownership I am able to save more money. Then there's
the quality of life improvements. I have 1500sf instead of <500\. I don't have
to plan my grocery shopping around the weather. My girlfriend can have a pet
(and I can have a happier girlfriend). Etc. etc.

~~~
matchbok
Yup, it's all about the trade off. Space, cheap rent, 2 hr commutes vs high
rent, 20 min commutes, walkability. I'd imagine it changes over time.

------
shados
I wonder how much of this (or anything related to inequality getting worse) is
also a proxy of the "new permutations" of families that were "created" over
the last couple of decades (sorry for the poor terminology. I'm not sure how
best to describe the concept).

If for a while the norm was a single low skill working parent with someone
staying at home to take care of a large families, then that's what you'll need
to live in a high demand area. If you have zero working parent, or a larger
family, then you're a few steps away from that.

However if we introduce a few more possible optimizations: \- 2 working
parents. \- No family (as in, no kids) \- College education.

And so on, and you make those things very common (common enough to affect
local economies), then the people who don't have those things are even further
from the norm. DINKs with significant educations are miles ahead from more
"traditional" families as far as economic situation go, and they're becoming
more and more common, but back then they were nearly unheard of. Fill a city
with DINKs, and everyone else is screwed.

~~~
zjaffee
I don't think it's that simple, the work force participation rate today is
about the same that it was in 1980 (abet there has been population growth
since then).

------
resalisbury
The headline is misleading on two accounts (though the content is fine).
First, it's not that big cities don't deliver, they do. It's that the marginal
improvments in wages do not make up for the cost of living increase. So a
better headline would be that zoning is pricing ppl out of big cities. Second,
some cities are still amazing at helping kids escape from poverty, even if the
parents are no better off after moving there. The article itself cites that
research. That's huge. A better headline would be "Some Cities help break
intergenerational poverty."

Article is fine, but the conclusions you might draw from the headline are dead
wrong.

------
zapita
I find the term “low-skill worker” insulting and ignorant. It’s much more
accurate to call them low-wage workers.

------
osdiab
So long as getting a decent place to live is dependent on income, it's
unsurprising to me that cities - which are established because of their
ability to produce outsized economic value - become the domain of people who
produce outsized economic value. Yes, cities are fun as a side product, but
people don't typically invest this much just for fun.

The market only cares about your quality of life if that translates to
significant profit. Nobody has any claim in such a system to live near a city,
with any level of comfort. So insanely long commutes and inhumane cage homes
should not be a surprising result.

As the value of being in a city rises, the equilibrium will be to make life
maximally miserable for those who can't afford the luxuries present in a city.
And for those who can, the equilibrium is to make things minimally comfortable
for those people to decide to continue generating economic value.

The market has no reason to provide affordable housing to people who cannot
afford the economic value of the land beneath it, so the alternatives the
article suggests - building a lot of housing (artificially distorting the
market) or providing strong social services (artificially distorting the
market), unsurprisingly, needs to artificially distort the market.

There are clearly things we care about that the market does not reflect. Money
does not capture all the things we value in society, including economic
diversity within a city, so expecting purely market-driven incentives to solve
this issue is naive.

~~~
colechristensen
How about using zoning laws to enforce the mixture of types of home AND the
amount of housing ratio to the number of jobs (commercial and industrial
zoning)?

If you have more jobs than you have homes, don't zone for more jobs.

~~~
osdiab
I'm all for policy like that, as well as generally reducing zoning
restrictions in general as far as housing capacity goes. Japanese nuisance
zoning is a pretty good system, for example.

But my main point is, it takes interventions that intentionally constrain the
way the market works, to get a fair system going. To institute a sane
proportion of housing to jobs nowadays that preserves a mix of affordable and
luxury housing, you're going to need to do a hell of a lot of subsidizing to
make that affordable housing worth it to construct in the first place. So
who's up for subsidizing it?

~~~
colechristensen
I don't really think you have to subsidize anything. Zone for density and sq.
ft ensuring there is a stable _variety_ of each, zone housing and business
only so each can be equal to the other in population (basically as many people
commuting out of your city as commuting in), and tax vacancy 10x occupied
rates. Let the market free within those confines.

If a city does not want to add much density, I am fine with that as long as
they are not allowed to keep adding jobs.

160,000 more people work in San Francisco than work there.

------
SamuelAdams
> So what’s to be done in order to help mid-skilled and non-college workers
> live decent, middle-class lives? ... build lots more housing in cities,
> driving down rents and making cities more livable for everyone.

This is a nice idea in theory, but isn't this a temporary fix? For the first
five years, housing prices will lower. But as more companies (demanding
higher-educated individuals) realize more people are available, those
companies will increase their staff or start new companies.

So five years later, we are back to where it started.

~~~
zanny
So five years later you build _more housing_.

We as a species are capable of building absurdly dense cities that are
probably per-capita the cheapest place a person can live (since you cram so
many into every skyscraper). We choose not to because "property values" and
"my view from my window" and "I don't want _those_ people living here".

~~~
Eridrus
I agree that you need to keep building housing, but I also think it's
important to not concede the point that it will have no effect on housing
prices.

The GP is flat out wrong in their assessment that prices will just return to
what they were.

Even if you build more housing, and then stop, the prices will be lower than
if you hadn't built anything at all.

~~~
gizmo686
This is only true if an increase in the housing supply does not lead to an
increase in the population. At a national level, this is probably true enough
to assume. But, at the level of individual cities, it is not nessaserrily
true. I can easily imagine scenarios where an increase in housing causes an
increase in the local population greater than the increase in housing
capacity.

~~~
Eridrus
For increase supply to have no effect on price, the demand curve has to be
highly inelastic, but this just isn't true. People very much do make decisions
about where to live based on the cost.

At the margin, people may be more likely to move if you build more housing,
but this would be because they can get a better deal on housing, not because
there is some abstract idea of more housing.

Without a reduction in price/increase in housing quality, there is no
mechanism that would cause more people to show up.

The main exception to this is if you have rent control capping prices, but
this isn't really a big part of any market where this discussion is taking
place.

~~~
gizmo686
I am thinking more in terms of lagging responses.

For instance, suppose we increased supply 10% today, and prices immidietly
fall. Seeing the lower prices, bussiness begin making plans to open in the new
city to take advantage of the lower COL workforce. In total, these plans would
increase the demand for labor by 20% and take 5 years to be implemented.

At some point in those 5 years, people will have moved into the new housing
driving the costs back up to their original levels.

In an ideal market, bussiness would stop moving in, as their original
motivation to do so is gone. However, the market is not ideal. Plans had
already been written, and the moving has already begun, so the demand for
labor will increase even further, encouraging more people to move in, driving
up the costs of housing.

~~~
Eridrus
I mean, rents won't immediately fall. We're incapable of producing that much
housing quickly. We're limited by all sorts of construction infrastructure.
It's going to take a decade to crawl out of this hole in the best case.

This also assumes that these hypothetical employers would be paying the same
amount as the employers who were there before. Which is unlikely because the
existing employers were already there paying increased wages, vs the new
employers who waited for falling CoL/salaries to move in.

Also, raising salaries is often not enough to offset CoL expenses, since not
all employees have the same CoL expenses, e.g. families, and those with higher
CoL expenses will again move away / won't come to these jobs.

Also, in practice, the amount of jobs is not the binding factor in, e.g. the
bay area. There are plenty of jobs out there, people are just a lot less
willing to move there due to the insane CoL/shitty commute.

You could have some perfect storm where the induced demand perfectly offsets
the new housing, but if you assume there is some elasticity at all points in
the system, I think the default assumption should be that increased supply
will drive down prices for everyone.

------
Stubb
“The goal [of government] is to have an economy which makes it possible for
normal, average young people to marry and have kids.”

From: [https://bloodyshovel.wordpress.com/2019/01/21/tucker-
carlson...](https://bloodyshovel.wordpress.com/2019/01/21/tucker-carlsons-war-
against-woke-capital-and-the-future-of-the-right/)

~~~
moate
That article...woof.

Also, why is that the goal of a government? Isn't that the goal of a culture?
Governments are meant to define and protect the rights of their citizens.
Economics are only a portion of what governments do (unless you want to
consider everything economics?)

------
hema_n
Moretti’s idea, which has been echoed by some urban development activist
groups, is to build lots more housing in cities, driving down rents and making
cities more livable for everyone. Another idea is to use research universities
to revitalize flagging regions by dispersing knowledge workers to less-
populated areas.- This is actual a nice idea..!!

------
Jhndb
Just to point out, this article is focused on the US only.

~~~
avenius
But we do see the same problem in several European cities. For instance
there's been some debate about how nurses can't really afford to live in Oslo
anymore due to the discrepancy between income and rent.

~~~
lordnacho
I've long thought the same about London. How does a teacher, nurse, or
policeman rent anywhere within a 60 minute commute?

Probably many delay having a family and are able to share a house, but
eventually that's going to get old for a lot of people.

~~~
zanny
Europe as a whole has a large mitigating factor in that there is really good
public infrastructure buses and trains there. Sure, an hour commute a day
isn't preferable but if you can spend it reading or watching netflix it
impacts your life a lot less negatively than having to drive a car the whole
time.

So no, the baristas, janitors, etc of London can't live in London. But at
least most of their commutes aren't as terrible as the majority of US workers
driving individual cars over great distances every day to go to work.

------
knightofmars
I can't help but think of Kurt Vonnegut's book "Player Piano" when reading
articles of this nature.

[https://en.wikipedia.org/wiki/Player_Piano_(novel)](https://en.wikipedia.org/wiki/Player_Piano_\(novel\))

------
cbm-vic-20
Have there been studies of correlations between crime rates and the
affordability of cities?

~~~
SolaceQuantum
Found these briefly:

" _Recent years have witnessed widespread public concern and increased policy
attention to issues of housing affordability. In 2015 a full one-half of U.S.
households were paying more than 30 percent of their income in rent. We
identify multiple channels by which individual or family outcomes are inferior
when rents increase faster than income. Research further suggests that rising
rent burdens may reduce the economic potential of metropolitan areas. This
paper reviews the evidence on why affordability matters._ "
[https://www.sciencedirect.com/science/article/pii/S016604621...](https://www.sciencedirect.com/science/article/pii/S0166046217303058)

" _We examine whether there is a significant effect of foreclosure on robbery
and burglary across neighborhoods, and whether this varies systematically
across cities. Specifically, we consider whether several city‐level
attributes—overall foreclosure rates, levels of socioeconomic disadvantage and
prior vacancy rates, the degree of recent new housing construction, housing
affordability, and the quantity and quality of policing—moderate the
relationship between neighborhood levels of foreclosure and crime._ "
[https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6237....](https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6237.2012.00888.x)

~~~
stilky
Can't read the first one, but the second one focuses on foreclosure rates
which seems more indicative of an economic shock rather than general low
affordability.

~~~
SolaceQuantum
Yes; it was a sub-5-minute google scholar search to potentially get someone
started on what seems to exist in the field. I'm sure if one wanted more
specialized information either someone on HN will know more than me or someone
else can take more time to search more effectively.

------
spdebbarma
Uploaded a copy of the site to Imgur as a mirror in case you are unable to
read because you've exhausted free reading credits.

[1] [https://i.imgur.com/uE1rOOs.jpg](https://i.imgur.com/uE1rOOs.jpg)

------
surge
They barely deliver for high skill workers.

The lifestyle I can afford, even on a lower salary, in a mid sized city is
significantly better than what I could afford on a generous salary in a major
city like NYC, SF, Seattle, LA, etc.

------
gammateam
With regard to the headline as someone that feels like they escaped the
suburbs via competition, intellectual acumen and luck all I can say is

"GREAT!" Now gtfo and I'll just try not to think about the public housing
lottery and super cheap rent there, and hope that helps with keep some low-
skill services available in the city.

Those exurbs can often develop into their own hubs, not for social mobility,
but to do what they need for people. "The City" shouldn't be seen as where
people need to be, but it can be a luxury!

------
vinny2020
Cities without a happy working class is either a resort or a plantation.

------
seereadhack
As other comments have noted, this isn't just a national story. China has a
large scale plan to push recent low skill migrants away from big cities toward
medium sized cities (medium sized for China anyway) in an effort to help boost
consumption. China also faces an enormous housing glut that is at least
partially powered by middle and upper class folks using real estate as way to
save and invest for retirement. Anyone under the age of 35 and/or without a
family history of home ownership in a major American city can tell you that
this sounds very familiar.

And though the economies in both the US and China are purportedly chugging
along, wealth inequality seems to be pulling at the seams everywhere, dragging
on growth and exaggerating the tensions between established urban families and
those who serve them. How the differences in scale, complexity, and political
culture will shape the political responses... well, I'd be inclined to put my
money on Xi before the Orange one.

That said, the US will get to juice those spend-happy retiring baby boomers
who will be spending their kids inheritance for the next couple of decades,
and if the grad students powering the biotech, materials, and data
improvements don't jump ship, there's a chance the west could actually keep
pace. But the dynamics of market driven social and mass media don't inspire so
much confidence of late.

The largest political challenge in both countries may be in reconciling the
demands of the moralising progressive youth and the reactionary would-be
capitalists, the entrenched liberal urban bureaucracies and the knee-jerk
conservative know-bettering from the peanut gallery. While the Chinese impulse
for social order will enjoy the advantages of increasing surveillance and
sheer scale, the west will be waiting on the decaying but stubbornly
persistent tradition of liberal education to surface some y'know, actual
leadership.

------
mcguire
How do high skilled service jobs fit into this picture?

~~~
goobynight
Probably much better, but I don't know the math myself.

The main key is having just some barrier to entry.

If you know how to repair motorcycles, you're going to be around more people
that can afford motorcycles in a city. They'll be more expensive ones on
average and people will be less likely to do the work themselves (time is
worth more or they don't have a garage to do the work)

There's a shop in Chicago that only works on mopeds. They charge $75/hr on the
workbench and that's for relatively cheap machines. Wait time without a rush
fee in summer is on the order of weeks because they are the only non-
independents in the game.

Due to the population, you can also run pretty niche services/shops. I know a
place that only does battery sales and services. Phone, automotive, household
gates, and so on.

------
Bucephalus355
And yet we see this huge push in the intelligentsia for how cities “increase
creativity” and promote value “x y and z” and how “we should be like China and
build planned mega cities”.

Cities that are very walkable and have a thriving downtown / mixed business
areas can be a ton of fun and very good, but it’s very hard to ever make that
affordable, and basically impossible to do in America which has large space
demands and associates home ownership with the American Dream.

If anything, I see the intellgientsia pushing it because they have been
captured by the global rich (see Steven Pinker) and the super rich love cities
(again we all do) and they want more of them to play in as well as a huge
domestic servant / labor force bought of with a modicum of UBI for the time
being.

~~~
zanny
You make cities affordable by unrestricting building height way beyond the
"projected" demand for residential construction in the core. Then as dense,
cheap residential fills up you will see the natural build out of more of it.
Keeping space to grow / build public transit and infrastructure is also
critical. That doesn't mean overbuild now, it means don't try to stop it when
the time comes.

