Is the ‘creative class’ saving our cities, or making them impossible to live in?

Business and Economics Correspondent
BY  
Morning commuters cross the street as the sun shines down 42nd St in New York City on March 16, 2016. REUTERS/Lucas Jackson - RTSAPNF

Morning commuters cross the street as the sun shines down 42nd St in New York City on March 16, 2016. Photo by Lucas Jackson/Reuters

Richard Florida may be the most widely read author on the subject of cities these days, and probably has been since the turn of the millennium. He first became known for cheerleading the idea that if cities attracted what he called “the creative class” — professionals in the arts, in the media, in tech — they would prosper. And so they did — with a vengeance.

But in a new book, he explains the real-world vengeance that creative class migration has wrought. “The new urban crisis,” he now calls it: the ever more yawning gap between those prospering in cities and those who serve them.

For this Thursday’s Making Sen$e broadcast story, Florida and I toured New York’s tourist sensation, the High Line, and I asked him some tough questions, which for better or worse didn’t make the final cut for our segment.

PAUL SOLMAN: As you began to realize the double-edged nature of innovative clustering, did you begin to regret having pushed it as vigorously as you did?

RICHARD FLORIDA: No, because I think we have to continue to push it. We have to continue to make our cities more innovative and knowledge-based.

“We’re not just economically unequal, our country is geographically unequal as well. And it is getting worse.”

I am worried about the backlash. On the one hand, from the right, you have this populist backlash, which is quite anti-urban — de-funding cities, cutting budgets, closing the door on immigrants. On the left, you have this kind of NIMBY, not-in-my-backyard, reaction, which is “no, no, no, we don’t want this here.”

And what scares me in this NIMBY behavior is not just that it limits housing development and pushes up prices. It actually holds back innovation by limiting clustering. For this reason, I prefer to call it the New Urban Luddism. It’s equivalent to the Luddites, who in the old factories in England smashed the machines, because they were scared their jobs would be eliminated.

We have these ballot measures now in places like San Francisco that say “we don’t want any more tech companies. We don’t want any more tech workers.” Well, that’s throwing the proverbial baby out with the bathwater.

READ MORE: How the housing markets in 5 U.S. cities may have cost you $5,000 in lost wages

If we do that, we’re not going to get the innovation and the new companies that drive our country forward. So we need tech companies, but at the same time we need to build housing and create opportunity for more people to participate.

PAUL SOLMAN: And it’s also daunting that the people who are in what were formerly middle-class neighborhoods or areas, if they’re really talented or lucky or both, come to places like San Francisco or New York as fast as they can, getting the heck out of where they were, thereby depriving those places of their skills and talents.

RICHARD FLORIDA: We’re not just economically unequal, our country is geographically unequal as well. And it is getting worse. It used to be that if you were a young person, you could get out. As a young person growing up in New Jersey, I got a scholarship. I went to Rutgers College. I went to Columbia University for graduate school. I could afford to live in New York.

The Bank of Mom and Dad

Now, though, what’s really becoming quite worrisome is that increasingly, to buy access to these locations, you can’t do it alone. Maybe you could do it as a young kid with five or six roommates. But as soon as you get a little older, you really need the Bank of Mom and Dad.

If you don’t have the Bank of Mom and Dad, it is very hard to secure one of these premier locations. It’s essentially reinforcing the class advantage that comes from growing up with affluent parents. How do you secure a location for yourself and then hopefully a family if you don’t have those advantages?

“We’re beginning to see a society in which access to premier locations really depends not only on your own talent, but on your inheritance.”

I think we’re not quite there yet, but we’re beginning to see a society in which access to premier locations really depends not only on your own talent, but on your inheritance.

PAUL SOLMAN: But you’re from a family where the father was a factory worker in Newark, New Jersey. Given the same level of talent, would you have made it to where you are today?

RICHARD FLORIDA: I don’t think I would have made it.

PAUL SOLMAN: Really?

RICHARD FLORIDA: I don’t think I would have made it. First, I don’t think I would have gotten into Rutgers College. I didn’t have great SATs, but at that time a good SAT, not a great SAT, could get you in. But going away to college, that was a life-changing experience for me.

Richard Florida or Tony Soprano?

I grew up an Italian-American tough guy kind of “Sopranos” neighborhood, to be quite frank. I went to Catholic school, but you had to hide the fact that you were smart.

But going to Rutgers at 17 lifted me out of that environment and put me in an environment where I could explore my interests. My geography professor gave us an assignment: “Take the train to New York. Go look at the Flatiron Building. Go look at Lower Manhattan. Go look at the Meatpacking district.” That’s piqued my interest in cities, it hooked me. I continued in college and went to graduate school for urban planning and made it my passion and my career. I don’t think I would have gotten into as good of a college today, and certainly I don’t think I would have been able to become a professor in today’s environment; it’s much harder for someone with my background today.

I certainly don’t find a lot of other people like me with my kind of background now. I find kids who grew up in much more middle-class or advantaged households. So I think it’s very, very hard, and especially in areas where education matters, it’s harder.

READ MORE: The housing shortage and homelessness in San Francisco. Is there a solution?

PAUL SOLMAN: It reminds me of the theme of inevitability. What’s happening is not only clustering in cities, but the spin-off effect that young people meet in those clusters and the smart people hook up with the smart people and they have smart kids to whom they are giving every advantage. And the process becomes self-perpetuating.

Can anyone stop the inequality merry-go-round?

RICHARD FLORIDA: I wrote about this back in 2002 in “Rise of the Creative Class,” this effect that is actually making our society more divided. Back then I wrote about it because talented and creative people are meeting and marrying one another and perpetuating advantage. The most stable marriages, the most long-running marriages, are marriages among highly educated and more affluent people. So marriage is in effect becoming the province of affluent people. Here is another way the advantages of class and location combined with coupling perpetuate themselves.

There’s great research now which shows the advantage of being a family in one of these high performing superstar metros and neighborhoods. It’s not only your income and that of your parents, but being in that location and having access to great museums, good schools — charter schools, public schools and private schools — all of the services and amenities that come with that. All of the advantages of meeting people, getting exposed to different networks — they compound this advantage above and beyond class and income.

PAUL SOLMAN: But if the cities, by attracting great talent from the countryside in the United States and mainly from abroad, are creating all these inequalities within them and between them and the rest of the country, then Donald Trump’s solution would seem to be a good one; that is, let’s even the playing field here. Cities shouldn’t get all the advantages; the rest of the country should.

“The United States has one of the most geographically distributed systems of cities on the planet. The five largest metros in the United States produce roughly 25 percent of our GDP.”

RICHARD FLORIDA: That’s the problem. You can’t even the playing field. In fact, America’s playing field is one of the most even in the world. The United States has one of the most geographically distributed systems of cities on the planet. The five largest metros in the United States produce roughly 25 percent of our GDP.

The five largest metros in Canada produce 50 percent of its GDP. And one metro, Seoul, produces more than 50 percent of South Korea’s GDP. The concentration in clustering of advantage in cities is happening not simply because people are “choosing” it, but because it’s where economic growth comes from.

The world isn’t flat, it’s spiky

I wrote a long time ago: The world isn’t flat; the world is spiky and it’s getting spikier and spikier. So we have to both invest in the spikes and keep them strong, but make sure other places are connected and participate in those advantages. If we flatten the spikes, we’re going to undermine our own economy.

PAUL SOLMAN: But we’ll be more egalitarian. We’ll not have the jaggedness of a polarized or economically polarized America to the extent we do now, and to the extent it’s [becoming] more and more [polarized].

RICHARD FLORIDA: We’ll be a less innovative, less productive economy, and we’ll have fewer jobs, have fewer good jobs. You know, we’re in the greatest city in the world right now [New York], this great hub of innovation and finance and talent. But I live in Toronto. The Torontos and Vancouvers and Amsterdams and Sydneys and Melbournes —  they’re in a different place than they were 20 years ago. They have fantastic universities, they’re attracting people, they’re grown-up, wonderful cities now with all the amenities. So if this goes on for eight years or so, it could be that some of that talent reorients itself and moves to great cities outside the United States. That would have a significant negative effect on the innovativeness of the U.S. economy, and its ability to produce new high-tech startups. Maybe the next Apples or Googles will really happen somewhere else.

Is the brain drain over?

PAUL SOLMAN: For years, I’ve taught students from abroad who longed to stay in the U.S. They are now talking about Australia, Europe and Asia and do not talk the way they did just a year or two ago about coming to and staying in the United States.

RICHARD FLORIDA: You are absolutely right: they don’t. I see it in my students in Toronto at the business school, the Rotman School at the University of Toronto, where I teach. They come from all over the world, including the U.S., and 90-plus percent of them want to stay in Toronto. According to the statistics, a third to a half of high-tech, high-growth startups have an immigrant on the founding team.

Boy, oh boy. If that gets redirected, the United States loses that innovation impulse, loses that entrepreneurial impulse, will it be Melbourne, will it be Sydney, will it be Toronto, will it be Vancouver, will it be a place that we don’t even think about today that’s growing? You start to see these knowledge clusters emerge outside the United States, and that’s worrying from a national point of view. Advantages that we have taken for granted could be cut off.

READ MORE: A quarter of all renters spend half of income on housing

PAUL SOLMAN: But it’s such a double-edged sword, isn’t it? On the one hand, we need these clusters that you’ve been promoting for 15, 20 years. On the other hand, these clusters cause the crisis that your whole book is about.

RICHARD FLORIDA: This is the central contradiction of capitalism. It’s not just “New Urban Crisis,” but the central crisis of capitalism today. The very force that propels our economy divides us and pulls us apart and this is the national conversation we need to have. By the way, I don’t have all the answers. This is a conversation that we need to have as a country.

PAUL SOLMAN: I’ve watched this process my entire, my entire career as a business and economics reporter. It’s been 40 years. And all I’ve seen is more and more economic inequality, more and more of the clusters you’re seeing. You start the book talking about New York in the 1970s when this place was bereft, where people would want to get out of here, and then in the ‘80s with the crack epidemic. And now, you’ve got the same apartments that sold for $50,000 back in the’ 70s are $5 million apartments today, right?

RICHARD FLORIDA: Somebody asked me recently: “If you could predict the future, the next 10 years, what would you see?” It was a very good question and I said: You know what? Let me go back the last 10 or 15 years. Everybody was talking about George W Bush and the war in the Middle East and Iraq and terrorism.

The big story for me was the urban revival. Our cities came back; they were remade. Tech came back. People came in.

The hope: Think locally and act locally

Looking out to the next 10 years, I think it’s got to be local initiative. The federal government didn’t make the boom happen; it was local initiative and local people and local business and local mayors doing it.

“The federal government didn’t make the boom happen; it was local initiative and local people and local business and local mayors doing it.”

Here are a couple of reasons why I’m cautiously optimistic. One is because I spend time in cities all over the country and all over the world — not just in New York and San Francisco. I go to the places that are second- and third-tier places trying to rebuild. I lived in Pittsburgh for 17 years, and what you see there is local initiative to rebuild those economies.

Does it work all the time? No, but those economies are stronger than they were. So I really do think that mayors and local city builders and local people and their neighborhoods are building and can rebuild even in tough times when the deck is stacked against them like today

The other reason I’m optimistic is I don’t see the kind of extreme political polarization we have at the national level in Washington, D.C., at the local level. When I visit communities all across the country, I cannot tell if the mayor or local elected officials are Democrat or Republican. There’s no Democratic and Republican way to run a city. You just build a better city for people. That’s why I’m optimistic — because when it comes to building a local economy, people have done it and can do it. If we give them the tools, the narrative, the conversation about inclusion — they can make it happen.

SHARE VIA TEXT