
A “nationwide gentrification effect” is segregating us by education - dctoedt
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/07/11/college-graduates-are-sorting-themselves-into-cities-increasingly-out-of-reach-of-everyone-else/
======
civilian
Okay. I'm reading this: "Diamond also found that as cities increased their
share of college graduates between 1980 and 2000, they also increased their
bars, restaurants, dry cleaners, museums and art galleries per capita. And
they experienced larger decreases in pollution and property crime, suggesting
that cities that attract college grads benefit from both the kind of amenities
that consumers pay for and those that are more intangible."

And my reaction is: yes, there is inequality, but what we're seeing here is
that college graduates are improving their cities. Awesome!

And I really dislike this 30,000-foot view of humanity:

""" "When you have more college grads, all of these amenities seem to improve
in your city," Diamond says. "But that may be at the expense of kicking out
lower skilled workers to other cities."

It also comes at the expense of other cities that may lose their college
grads. What happens to Toledo and Baton Rouge without them? """

I'm not subservient to helping cities-- I'm going to cities because of my own
interests, and I absolutely reject any guilt to bringing down those cities. I
dislike this attitude that sees people as pawns that we should move around for
political goals rather than as people who are just living their lives.

~~~
RodericDay
_" I'm not subservient to helping cities-- I'm going to cities because of my
own interests, and I absolutely reject any guilt to bringing down those
cities."_

This dogma has penetrated very, very deep amongst techies. The invisible hand
seems to be a drop-in replacement for any reflexion about morality for some.

~~~
firstOrder
Dogma has penetrated very deep. If you read Adam Smith's "Wealth of Nations",
the invisible hand is something that _intervenes_ in markets to prevent free
trade among merchants from different nations.

Nowadays, 99% of the time people use his term the exact opposite way. They say
it is a hand that gently guides merchants from different nations to trade with
one another within a free market, and that such thing. They have twisted his
term to mean the exact opposite of how Smith intended it.

~~~
djokkataja
No, Smith used the term "invisible hand" more generically to describe how the
actions of individuals when optimizing for themselves can produce outcomes
that may be optimal for greater purposes. In The Wealth of Nations, he uses it
to refer to the way in which the actions of domestic businessmen support
domestic industry in the best possible way (as though orchestrated by an
invisible hand).[1]

In The Theory of Moral Sentiments, Smith says that the actions of the wealthy
produce beneficial effects for all of society, as though guided by an
invisible hand. This idea is commonly referred to as the "trickle-down effect"
today.[2]

In modern economics the term is mostly used to refer to the way in which
markets tend to self-regulate,[3] and it's known as THE invisible hand, which
is a bit unfortunate since it's such a vague metaphor that it can easily be
used to refer to almost any gestalt concept.

[1]
[https://en.wikipedia.org/wiki/The_Wealth_of_Nations#Book_IV:...](https://en.wikipedia.org/wiki/The_Wealth_of_Nations#Book_IV:_Of_Systems_of_political_Economy)
"As every individual, therefore, endeavours as much as he can both to employ
his capital in the support of domestic industry, and so to direct that
industry that its produce may be of the greatest value; every individual
necessarily labours to render the annual revenue of the society as great as he
can. He generally, indeed, neither intends to promote the public interest, nor
knows how much he is promoting it. By preferring the support of domestic to
that of foreign industry, he intends only his own security; and by directing
that industry in such a manner as its produce may be of the greatest value, he
intends only his own gain, and he is in this, as in many other cases, led by
an invisible hand to promote an end which was no part of his intention. Nor is
it always the worse for the society that it was no part of it. By pursuing his
own interest he frequently promotes that of the society more effectually than
when he really intends to promote it." (Book 4, Chapter 2)
[2][https://en.wikipedia.org/wiki/Invisible_hand#Other_uses_of_t...](https://en.wikipedia.org/wiki/Invisible_hand#Other_uses_of_the_phrase_by_Smith)
"The rich … consume little more than the poor, and in spite of their natural
selfishness and rapacity, though they mean only their own conveniency, though
the sole end which they propose from the labours of all the thousands whom
they employ, be the gratification of their own vain and insatiable desires,
they divide with the poor the produce of all their improvements. They are led
by an invisible hand to make nearly the same distribution of the necessaries
of life, which would have been made, had the earth been divided into equal
portions among all its inhabitants, and thus without intending it, without
knowing it, advance the interest of the society, and afford means to the
multiplication of the species."
[3][https://en.wikipedia.org/wiki/Invisible_hand](https://en.wikipedia.org/wiki/Invisible_hand)

~~~
judk
Interestingly, the supporting claim about rich people consuming not much more
than poor people, is massively less true now than it was centuries ago.

~~~
barry-cotter
Could you expand on that? Technological progress has been less about
increasing the gross amount of stuff the rich consume than the type. And for
most things the poor get that stuff too, just later. iPhones, better, safer,
more fuel efficient cars, flat screen TVs, , healthcare innovations etc.

Rich people do have nicer stuff but to a surprising extent they just have
different stuff. An awful lot of that is zero sum social status signalling,
like living in a richer area, or drinking wine, not beer, or gritting your
teeth and congratulating your colleague on their kid getting into Princeton,
when yours got into Duke.

I'd actually be really surprised if consumption inequality hasn't gone down
since the fifties for most physical goods and services.

------
7Figures2Commas
> They're gaining access to high-cost cities like New York or San Francisco
> that offer so much more than good jobs: more restaurants, better schools,
> less crime, even cleaner air.

Yes, and a lot of these folks are spending the vast majority of their
disposable income on housing and discretionary income on the so-called
"amenities" mentioned in the article.

Don't get me wrong: it's great to be able to live in a desirable area with
high employment, but at the end of the day, it's not what you make, it's what
you keep. There are a lot of folks like this guy[1] who confuse cashflow from
employment with financial security.

The paltry savings rates in this country aren't just a product of the less
educated, lower-wage workers. If you look at national averages, it's pretty
obvious that most college graduates aren't doing a great job of converting
their higher wages into savings and assets.

[1]
[https://news.ycombinator.com/item?id=5505622](https://news.ycombinator.com/item?id=5505622)

~~~
autokad
i dont think that is fair. just because they are not taking advantage of their
improved situation doesnt mean they dont have a situational advantage.

What im trying to say is, they do have a huge net benefit, but they may not be
financially behaved to actually save it. My former roomate quite a bit of
money and spent a great deal of it on alcohol. you could increase his wage,
he'd just find a way to spend more. you could decrease his wage, and his
spending on those non-accounted things would drop.

------
dmritard96
"Census data suggests that in 1980 a college graduate could expect to earn
about 38 percent more than a worker with only a high-school diploma. Since
then, the difference in their wages has only widened as our economy has
shifted to bestow greater and greater rewards on the well-educated. By 2000,
that number was about 57 percent. By 2011: 73 percent."

Regardless of how I feel about this, I wonder a bit what these numbers would
look like if you took the one percent out of the equation. The distribution of
wealth right now is totally nuts and concentrated at the very very top. If we
were to remove them my suspicion is that it still would be trending up but
maybe somewhat less severely.

~~~
autokad
This article doesnt state what census figure explicitly it was pulling from;
however, its the norm to use median household income (or some other median
value) as to not be skewed by outliers. In that case, removing the top 1%
wouldnt make a difference.

~~~
vannevar
Yes, if it was from here:

[https://www.census.gov/hhes/www/income/data/earnings/call1us...](https://www.census.gov/hhes/www/income/data/earnings/call1usboth.html)

then the median figure was used.

------
placeybordeaux
What degree of this is just how many college students is a city able to
attract?

Georgia has worked very hard to make Georgia a good state for choosing to go
to a local college, and I find it extremely unlikely that a large number of
people are being pushed out of Atlanta due to cost of living, its extremely
affordable to live in Atlanta, even more so if you consider the greater metro
area.

~~~
dkural
This is a very good point. There are cities like Atlanta and Chicago that
offer good jobs, good amenities and don't suffer in the same way - a large
reason is ease of developing housing in areas there are demand. Boston, SF,
NYC come with many unnecessary restrictions so supply is not able to shoot up
with demand. Ed Glaser's book "Triumph of the City" discussed many of these
issues.

------
micro_cam
This being hacker news I would ask if this is an inefficiency ready to be
taken advantage of or a system ready to be disrupted?

I would argue that payment companies/services like Square are successful in
part because they are doing just that. They lower the bar to someone with or
without a collage degree starting a small business like a food cart or truck
that can thrive in a collage grad heavy city.

Similarly sites that offer reviews make it easier for a business to prosper on
merit and reduce the tendency of people to just go to a chain because they
know what they will get.

I don't think this is an uphill battle. Surly a neighborhood feels more
vibrant alive and inspiring when all the workers (tech and otherwise) are out
on the street choosing from many unique options then when they all line up the
mcdonald's drive through, starbuck's or the company cafeteria to get the same
thing they got yesterday.

So what is the next great start up that helps make this happen?

~~~
bsder
Choice is good, until the food truck explodes ...

[http://articles.philly.com/2014-07-03/news/51033519_1_lunch-...](http://articles.philly.com/2014-07-03/news/51033519_1_lunch-
truck-3rd-street-14-year-old-boy)

The consequence of the food truck growth is that there are now many more
mobile, explosive installations of gas in existence as opposed to restaurants
which have a contained, inspected, fixed installations of gas.

At what point did we have the conversation as to whether this is a good thing?
We didn't.

Disruption isn't automatically a benefit.

~~~
micro_cam
Interesting point but I think the recent gas main explosion in new york and
the fervor over our aging, difficult to inspect and dangerous gas mains (the
one in question was 127 years old) needs to weighed if your going to argue
safety. [1] Reputable propane fillers will only fill gas tanks that have been
recently inspected and even the largest mobil tank only holds a limited amount
of gas compared to what can be released when something connected to a main
leaks.

However, my point more then being pro food truck or any one business model is
that major socio-economic trends like groups of people needing to move away
from some cities is indicative of something that might be target by a startup.
Who knows, maybe the next big trend is custom manufacturing with same day
delivery via 3d printers, skilled laborers and bike messengers leveraging both
the concentrated capitol of the educated workers and creating jobs for people
who would otherwise have to leave.

[1]: [http://www.cnn.com/2014/03/15/us/aging-gas-
infrastructure/](http://www.cnn.com/2014/03/15/us/aging-gas-infrastructure/)

------
mattdeboard
There's another article on the front page right now,
[http://www.venturedlife.com/episode-
three](http://www.venturedlife.com/episode-three) that suggests Detroit could
be the next Silicon Valley. I'd like to see an analysis of THAT article in the
context of the findings reported on in THIS article.

~~~
maxerickson
Oakland and Washtenaw counties (adjacent to the county Detroit is in) have
college graduates at rates far higher than the national average.

Washtenaw is about on par with San Francisco (but also only ~1/3 the
population).

I think it's relevant because you don't need all those services to exist in
the core of Detroit or a huge migration to get access to lots of educated
people.

------
asdkl234890
I am not sure how that could be prevented without reducing inequality. And I
don't see how to raise the income of lower educated people in a world which is
ever more automated.

~~~
pistle
Progressive taxation on wealth (not income). Then, mess with the curve of
progressiveness.

Generating income becomes the unbridled thing. Sitting on mountains of wealth
becomes futile. No dynasties. What have you done for me lately? You can live a
king's life by generating obscene earned income, but your kids will only be
assured easy street. Their kids only assured middle class. This gives grandpa
and grandma a reason to improve the lot of the middle and lower classes.

If you let the lower groups fall too far into despondence, they will
eventually come for your heads. You can build prisons to a point. You can
create mental prisons to an extent. You can pacify the masses for a long
while. Eventually, there's nothing left in the tank. Nothing to lose. Then,
you lose stability and your choices are few.

The more your society reflects fiefdoms of the middle ages, the more you'll
start seeing royalty thrown from windows and put on stakes.

We have the very wealthy (royalty). We have their military class ready to step
in: Gun-coveting believers in the system that _amazingly_ keeps increasing
inequality. Then we have a growing base of servants who can't own land or
tools of production (education). This looks increasingly familiar.

Or maybe I just have some Dystopia Myopia.

~~~
aianus
> If you let the lower groups fall too far into despondence, they will
> eventually come for your heads. You can build prisons to a point. You can
> create mental prisons to an extent. You can pacify the masses for a long
> while. Eventually, there's nothing left in the tank. Nothing to lose. Then,
> you lose stability and your choices are few.

I don't think that's true. People will resort to violence and risk their lives
when they're hungry and cold, not because the elite are driving Lamborghinis
and they have to make do with Fords. As long as the lower classes have some
minimum standard of living, greater and greater wealth inequality is
sustainable.

~~~
pistle
I was unclear. I agree with this and was trying to say essentially this. Rich
and powerful can try to contain those at the bottom through various means, but
eventually those means won't be able to contain them.

------
gautambay
Interesting to note that

(1) The cost of attending college has grown faster than inflation over the
past few decades.

(2) Yet, it seems that the ROI on college is high (for those you graduate), as
evidenced in this article.

(3) There's another statistic that gets bandied in education reform circles:
43% of college grads in 2013 were underemployed (working jobs that don't need
a college degree).

I wonder how #3 reconciles with #1 and #2. Perhaps this is a case of averages
lying, and the ROI data for top colleges might look very different from bottom
colleges (to the point where there may even be no income disparity between
attending a bad college vs. not attending college).

Has anyone seen a better / deeper analysis of this?

~~~
cko
Perhaps it's not the "going to college" that puts one at an advantage, but the
"being able to go to college." In other words, the people who are able to make
the choice to go and afford it were already at an advantageous position.

~~~
seanflyon
That makes sense, but I don't think it is as big of a factor as the actual
value of education. Our economy is increasingly shifting to skilled labor. If
you have the right skill set, opportunities abound.

~~~
dllthomas
To some degree that's still begging the question of whether "education" in the
traditional sense is the best way to acquire those skills. In the case of (a
good school, a typical person) I think the answer is _yes_ for an important
chunk of those skills (while other important chunks are not learned well in
that setting). As you move further from that case, more questions are raised,
and of course partisans in the pro/anti ("traditional") education camps tend
to ignore one or the other of the chunks I mentioned.

~~~
seanflyon
I think that surrounding yourself with other smart people with a common
interest in learning and where you are expected to learn is the best way to
acquire those skills. I think that is harder to find outside of formal
educational programs.

~~~
dllthomas
I mostly agree.

~~~
seanflyon
Yeah, I didn't mean to imply I disagreed with you. When I think about what
makes traditional education so valuable I don't think its the traditional
education part of it. When one thinks about what makes a college a college,
you think about the quality of the professors and curriculum and while I think
that's valuable, I don't that's the key part.

------
ars
Pittsburgh is quite an outlier on those charts. Anyone know why?

~~~
trackofalljades
Pittsburgh is a pretty amazing place right now, because it's a recovering rust
belt city that's managed to transition from manufacturing (steel) to services
(health care, banking, higher education, technology firms) pretty well but
because their initial crash was SO hard they still have very affordable cost-
of-living comparitively. So you have all the public transit and nice museums
and great libraries and all that but a bartender and a waitress can buy a
house and raise kids together too. It's someplace where "hipsters" are not
secretly living off their parents' money to front as making it.

------
keithpeter
_" A higher share of college graduates also yielded higher wages for workers
without college degrees, likely because employers have to pay them more to
keep them in higher-cost cities:"_

I'm wondering if the increase in average wage of non-college degree holders
outweighed the higher cost of living in the cities with high concentrations of
college degree holders.

If so, not so bad, all boats lifted higher by the tide &c. I suspect that the
rise does _not_ outweigh the increased cost of living, especially
rents/housing costs. The result is a long commute added onto the day for the
people who do not hold college degrees and who work in the chi-chi economy.
That process has limits.

Perhaps it needs a generation or two to reach steady-state?

------
forrestthewoods
"They're gaining access to high-cost cities like New York or San Francisco
that offer so much more than good jobs: more restaurants, better schools, less
crime, even cleaner air."

lol what? The whole article reads like someone who has a giant boner for SF.
Lots of assumptions that it's an objectively better place to live and
_obviously_ everyone wishes they could live there.

Tech job hubs are few and far between. There are only a handful of cities you
have to choose from. Toledo and Baton Rouge aren't on the table for tech
workers just like SF and NYC aren't on the table for a high school drop out.

------
webmaven
Interesting article and data, it is basically a deep and narrow dive into one
of the issues tacked by the 2008 book 'The Big Sort':
[http://www.thebigsort.com/](http://www.thebigsort.com/)

------
vinceguidry
This just in: Rich people have better lives and are happier than poor people!
Film at 11.

If they want people to start taking inequality seriously, the first thing
journalists might want to do is to figure out what the hell they're trying to
accomplish.

~~~
cauterized
What if what the journalists are trying to accomplish is to make information
available to people and prompt dialogue about the issues -- whatever the
outcome of that dialogue?

