New Geography

Author: Richey Piiparinen

  • Your City Is Not the Next Silicon Valley

    “No man needs sympathy because he has to work, because he has a burden to carry,” began Theodore Roosevelt, the U.S. president from 1901 to 1910. “Far and away the best prize that life offers is the chance to work hard at work worth doing.”

    No doubt, during Roosevelt’s time there was much work to do. In 1910, for example, nearly 40% of the country was still employed in agriculture. The percent of workers in industry—or manufacturing, construction, and mining—was at 30% and rising, driven by the revving of the Industrial Revolution.

    So, 70% of the country’s workforce made a living through labor. They made food to eat and the steel, railroads, cars, bridges, and buildings that modernized America.

    Cleveland was a prime benefactor. The manufacturing sector alone employed nearly 307,000 Clevelanders by 1967.

    But things changed. Labor-intensive industries matured, which ultimately means taking less people to produce more output. The percentage of the American labor force employed in agriculture stands at 2%, down from nearly 70% in 1840. This doesn’t mean we eat less food, but that technological advances have made the food sector ultra-efficient.

    Industry has been experiencing the same forces. Twenty percent of Americans are employed in manufacturing, mining, and construction. In the manufacturing sector, the national percentage is 8%, with Cleveland at 12%—down from 21% in 1990. Again, this doesn’t mean we don’t manufacture things— manufacturing output is at an all-time high nationally—it’s just that we need fewer people to produce more goods.

    Okay, so where do people work? The simple answer is services, or those sectors that make up the economy outside of agriculture and industry. Think legal, marketing, business, technology, education, healthcare, and hospitality. For instance, 20% of the nation worked in services in 1840. By 1960 that number was over 50%, before reaching nearly 80% by 2010.

    These numbers illustrate a shift in the U.S. economy over time, or from goods producing to service providing. To a large extent, these services are based on the production of ideas.

    Writing in the Harvard Business Review, the University of Toronto’s Roger Martin dubs this change the “rise of the talent economy”. Martin notes that in the 1960s, 72% of the top 50 U.S. companies owed their wealth to “the control and exploitation of natural resources.” Today, however, only 10% of the nation’s top companies are industry-based. Instead, over 50% of America’s companies are talent-based, such as Google, Apple, and Microsoft.

    “Over the past 50 years the U.S. economy has shifted decisively from financing the exploitation of natural resources to making the most of human talent,” writes Martin.

    Enter Silicon Valley. As Pittsburgh was to steel and Detroit to cars, Silicon Valley has been to the talent economy, particularly technology. It was there that the top minds clustered to design new-age circuits and microprocessors in the 1950s and 60s. It was also there that the best software engineers went to birth the internet, search engine, and social media in the 1990s and 2000s.

    On the backs of this talent came the wealth, not only the venture capital that has continually acted to “water” the region’s innovation, but also the rising wages of the workers. In fact, in Santa Clara, C.A., the county seat of Silicon Valley, the average salaried employee makes over $103,000 annually, approximately double that of Cuyahoga County employees and the U.S. workforce as a whole.

    The successes of Silicon Valley have led many regions to devise their own strategy to be a technology hub. Simply, there existed an “old” economy, so how does a region transition into the “new” economy, primarily one embodied by the high-end services and start-up culture of Northern California?

    Often, the tactics are rudimentary, like branding a part of your region as “Silicon X” so as to attract the components of a tech cluster. For instance, Philadelphia has “Philicon Valley” and New York has “Silicon Alley”, whereas New Orleans has “Silicon Bayou” and Portland has “Silicon Forest”. There’s “Silicon Swamp” in Gainesville, “Silicon Slopes” in Utah, “Silicon Harbor” in Charleston, and a variant of “Silicon Prairie” in Dallas, Chicago, Omaha, and Jackson Hole, Wyoming.

    Then, once you brand a part of your region “Silicon X”, the next step is to get the story out. A recent piece in Charleston Magazine entitled “The Rise of Silicon Harbor” is illustrative on this front. The author opens the piece by explaining that in Charleston there are “three local tech companies, all within three miles of each other”. The author then quotes a media outlet that states Charleston’s “Silicon Harbor is on its way to becoming the East Coast counterpart to California’s Silicon Valley”.

    This idea that your region can become the “next Silicon Valley”, well, its clickbait for online journalism—if only because folks wantto believe their hometown is the place of the future.

    For example, a recent Huffington Post piece hints “You Might Be Living in the Next Silicon Valley”. “Could Detroit become the next Silicon Valley?” echoes the industry magazine CIO. Meanwhile, a NewYorker piece is titled “How Utah Became the Next Silicon Valley”, while an Oklahoma story is headlined “Vision proposal aims at Tulsa being the next Silicon Valley”.

    Still, if everywhere is the next Silicon Valley, then nowhere is the next Silicon Valley. That’s the reality, and it’s important for cities to grasp it so they can plan their economic futures properly.

    “When it comes to tech, nobody can simply create the next Silicon Valley,” explains Aaron Renn, a Senior Fellow at the Manhattan Institute.

    “Just because a place has a number of startups doesn’t mean it’s destined to be a Silicon Valley,” Renn continued. “By all means celebrate a growing tech industry, but don’t get carried away.”

    But the bigger issue for regions looking for their economic future in Silicon Valley’s past is whether or not that’s even a sound strategy in the first place. Specifically, the tech economy is also a maturing, prone to the same job contractions, offshoring, and wage declines that hallmarked deindustrialization.

    According to data compiled by the Institute for Strategy and Competitiveness, four out of the top five tech clusters in the United States lost jobs from 1998 to 2013. San Jose, CA, the metropolitan area comprising Silicon Valley, led the way in contraction, going from nearly 160,000 tech jobs in 1998 to fewer than 74,000 in 2013—a decline of 54%. Telling, automotive employment in Detroit declined by less over the same time period, at 32%.

    These figures are in line with a new study out of Oxford University that found that while technology start- ups often create a lot of wealth, they are not good at creating many jobs. The study found that only 0.5% of the American workforce in 2010 were employed in industries that did not exist in 2000.

    “What I think the Oxford study is saying is that you’re not getting the kind of job growth from these kind of high-tech, high-growth, high-profitability startups that you had in the past,” said economist Jim Pethokoukis in the industry magazine Re/code.

    Why? A primary culprit is that tech jobs are becoming automated, just like farm and factory jobs before it. Specifically, tech companies over the last 15 years don’t need to hire as many people as they did in the 90’s because the software — loosely described as machines — is doing the work.

    For Jim Russell, the economic development blogger at Pacific Standard, the aging of the tech industry— Russell uses the term “tech convergence”—has echoes in the decline of industry. Russell discusses his life growing up on the run from macroeconomics, going from Erie, PA, to Schenectady, NY, to Vermont as his father, a General Electric engineer, tried to keep ahead of the wave of contractions.

    “He had an uncanny knack for moving our family just before the layoffs hit,” said Russell. “We were always racing to stay ahead of the economic restructuring.”

    Russell, whose wife is in tech sales, is experiencing the same game of cat and mouse today.

    “The tech industry enjoyed divergence until the end of the 1990s,” he’d note, explaining there were “fatter” times in emerging tech hubs like Boulder—where they’d lived.

    “But then the bubble burst,” Russell explained, “resulting in massive layoffs. Good friends were out of work.”

    Today, his family lives in Northern Virginia. That’s because it makes no economic sense for firms to house tech sales in Silicon Valley. This is partly due to the exorbitant cost of living in Northern California. But it is also due to the emergence of cloud computing, which has pushed tech everywhere— meaning tech hubs are increasingly nowhere.

    This maturation of tech has Russell wondering “whether Silicon Valley is the next Detroit”.

    Does this mean technology is no longer integral in regional economic growth? No. It just means the tech industry is changing. Detailing this change can both sharpen, if not make more realistic, a regional innovation strategy.

    According to the Manhattan Institute’s Aaron Renn, the issues boils down to this: “Do you have proprietary industry to marry to tech?”

    What Renn is getting at is the fact that tech in itself is a tool. It is by and large circuitry that allows access to information. But information is not knowledge. To give an example, information is the medical textbook, while knowledge is the application of information to become a heart surgeon. In other words, in what fields of applied knowledge can technology be tied to so as to further a given regional industry?

    Most recently, tech has been tied to the entertainment or leisure industry. “Silicon Valley started with tech for the sake of tech: making computers, search engines, and software,” says Cleveland technologist Eamon Johnson. “Now it’s 20-something dudes making solutions to replace what their mom did for them at home…laundry, food, rides around town, and recommendations on where to eat.”

    According to Johnson, the coming evolution of innovation is to use the next generation of computing power to go beyond tech’s capacity to distract or consume.

    “But techies need industry experts to give them problems so solutions can be worked on,” he says.

    This exactly what is happening in Cleveland with healthcare. Cleveland observes, treats, and innovates within the field human health like few other regions worldwide. As a result, the field of medical technology, or medtech, is gaining some traction in the region.

    This is evidenced by IBM’s recent acquisition of the Cleveland Clinic-spinoff Explorys, which is a “big data” health analytics firm. The company, based in Cleveland’s University Circle, is expanding its Cleveland office, perfecting its processes of how the region’s elite health “know-how” can be further mined through technology—thus creating more knowledge, and then more health innovation.

    These kind of developments are important. Medtech is still a frontier industry, and it fits in well with Cleveland’s area of specialization. So there’s plenty of room for a first mover advantage if the region can gets its medtech playbook right.

    Now, is medtech cool? Well that depends on your definition of “cool”. "You can work for a cool tech company with a texting app," said Explorys’ Charlie Lougheed to the Plain Dealer recently. "Or you can work for a company that improves health for millions of people."

    Returning to Teddy Roosevelt: that is a lot of work, and a lot of work worth doing.

    Richey Piiparinen is a Senior Research Associate who leads the Center for Population Dynamics at the Levin College of Urban Affairs at Cleveland State University. His work focuses on regional economic development and urban revitalization.

  • Cleveland Renaissance Fair

    So much talk of the Cleveland comeback with our downtown building boom and Republican National Convention-fueled makeover makes it difficult not to think about our mid-1990s civic renaissance. In 1995, The New York Times headline proclaimed ” ‘Mistake by the Lake’ Wakes Up, Roaring” as downtown’s stadiums and lakefront development created a “new face and new style of a city that for a long time had little panache.”

    But it wasn’t just the media who became enchanted with our freshly minted charms — even the scholars were feeling it. The academics, however, had a Lake Erie-sized caveat. There was a divide in the region’s comeback, noted the authors of the 1997 study “The Rise and Fall and Rise of Cleveland,” with areas separated by characteristics of “capital investment and disinvestment, industrialization and deindustrialization, suburbanization and ghettoization, white flight and a black underclass, the growth of services, and a [high-skill and low-skill] dual economy.”

    Prophetic then, those words serve as a warning now. The paradox of Cleveland’s comeback, if not an urban American comeback, is that the more a city returns, the greater the number who get left behind.

    Rob English splits his time between Baltimore and Cleveland. He has been doing so for nearly three years.

    A former Army infantryman, he serves as supervising organizer for the Greater Cleveland Congregations, a network of local faith and community-based organizations working for social justice. His experience in Baltimore since 1997 gives him a different perspective on his work in Cleveland today. “You have to meet people where they’re at, listen to them, and find ways to act in their mutual interest,” he says.

    English marched with the Cleveland group in late May after the Michael Brelo trial verdict to demand comprehensive criminal justice reform. As the demonstrators from about 40 religious congregations walked arm-in-arm along downtown streets to City Hall and the Justice Center, it was peaceful — unlike what happened in Baltimore a month earlier. There, the death of 25-year-old Freddie Gray in police custody prompted violent social unrest.

    “Baltimore is about seven to 10 years ahead of Cleveland,” says English.

    Odd as it sounds, what English means is that Baltimore’s economic resurgence has been longer in the making — and that may be a good thing for Cleveland.

    Baltimore’s signature project, the cleanup and rehabilitation of Baltimore’s Inner Harbor with its world-class aquarium and science center, began in the 1980s. Oriole Park at Camden Yards, an architectural model for Progressive Field, opened in 1992.

    With the beautification came a change in the city’s demographics. Today, nearly 27 percent of Baltimore residents have college degrees, compared to 16 percent in Cleveland. Baltimore’s median income ($41,385) is $15,000 higher than here. Cleveland’s poverty rate sits at 35 percent, 12 percentage points more than Baltimore.

    But the benefits in Charm City are not evenly distributed. White city residents earn nearly double that of black city residents. Baltimore also had the ninth worst wage disparity between high- and low-income workers in the nation, according to the Martin Prosperity Institute. So, while the physical redevelopment is apparent in the eyes of all Baltimoreans, the effect is uneven in their temperaments.

    English, 46, recalls a talk he had with an African-American woman from East Baltimore several years back. She could see the Inner Harbor off in the distance from her neighborhood.

    “Let me tell you about my anger,” she told him. “Every morning when I wake up and take the kids to the bus stop, every morning I look down and see the harbor, and every morning I get angrier.”

    Her experience is more than an isolated one, says English. In Baltimore, people saw aspects of the city improve year after year. Yet so many weren’t a part of it. Eventually tensions built, and the Freddie Gray incident ignited it.

    “Now, Cleveland is beginning a renaissance,” English says. “But there is room to come together so you’re not two cities.”

    ——–

    Thomas P.M. Barnett’s book The Pentagon’s New Map is more than a decade old. But its message is no less relevant.

    “Disconnectedness defines danger,” he argues.

    For the expert geostrategist, the world is split between two types of geographies: the Core, where “globalization is thick with network connectivity, financial transactions, liberal media flows, and collective security,” and the Gap, or areas disconnected from globalization and defined by poverty, low education rates and “the chronic conflicts that incubate the next generation” of instability.

    “We ignore the Gap’s existence at our own peril,” concludes Barnett.

    It is a useful model in understanding what’s occurring in Northeast Ohio.

    Consider that, according to a Brookings Institution study, Cleveland and Seattle led the nation with the biggest percentage increases in high-income households from 2012 to 2013. Yet, research from Rutgers University revealed Cleveland also has one of the largest increases in neighborhoods with concentrated poverty since 2000.

    This division is further evident when mapping the concentration of Northeast Ohio residents with college degrees. Higher educated areas are centered in downtown, Ohio City, Tremont, Detroit Shoreway and AsiaTown, which have each seen double-digit percentage increases in residents with college degrees since 2000, as well as along the lakeshore, near University Circle and in various suburban and exurban clusters. Meanwhile less educated areas are grouped in the city of Cleveland outside the urban core and in the rural exurbs.

    Simply, areas of Cleveland that are revitalizing are part of the globalizing Core. The isolate neighborhoods, or those experiencing higher levels of violence and poverty, comprise the Gap.

    In fact, for a number of quality of life indicators, outcomes in various East Side neighborhoods are below that of developing nations. A recent PolitiFact article showed that infant mortality rates were worse in select East Cleveland neighborhoods than in North Korea, Uzbekistan, Zimbabwe and the Gaza Strip.

    According to data by Case Western Reserve University, homicide rates for sections of the city are similarly comparable. In 2010, homicide rates in Ward 1, comprising parts of the southeast side, and Ward 9, which entails Glenville, are similar to Guatemala and El Salvador.

    What’s happening here is not unlike cities such as Chicago, Baltimore, Miami and Brooklyn, New York, where the spatial patterns of having and not having mean poverty gets pushed together, not alleviated. When cities evolve as separate and unequal, they create a deepening sense of alienation and marginalization.

    “The economic and social frustration could be expressed in more recourse to violence,” says Mark Joseph, director of the National Initiative on Mixed-Income Communities at Case Western Reserve University.

    Revitalizing neighborhoods have more “eyes on the street,” says Joseph, who examined the effect in the Second City while at the University of Chicago. And more vigilant policing can “push gangs into more constrained areas of the city and into more conflict with each other.”

    In the first nine months of 2015, for example, there was a 40 percent increase in gun homicides compared to 2014.

    “As we are seeing in our city, innocent bystanders suffer the consequences as well as those directly targeted,” Joseph says.

    In a span of a month, a 5-year-old, a 3-year-old and a 5-month-old were all victims of drive by shootings from gang violence that has boiled over in various East Side neighborhoods.

    After the youngest, Aavielle Wakefield, was killed, Cleveland police chief Calvin Williams stood at the crime scene on East 143rd Street in Cleveland’s Mount Pleasant neighborhood. It was night. The street was lit by the television crews. With Mayor Frank Jackson by his side, the chief demurred about the senseless tit for tat, the need to catch the perpetrators.

    Suddenly, his face went from firm to fragile. “To the family … it’s tough … it’s tough,” he said in tears. “This should not be happening to our city. And we got to do something about it.”

    ——–

    “I have looked into the eyes of children soldiers overseas,” says English, who served a platoon leader stationed in Somalia. “I see the same look in Cleveland and Baltimore. That is what decades of disinvestment has created in our urban areas. It’s got to stop.”

    Click to Enlarge

    English was in Baltimore in April when the riots erupted about 20 miles away from the harbor. The city was on needles. English and a few co-workers received alerts about young people near Mondawmin Mall turning violent.

    The message was to go where the rioting was occurring, with the intent to stem the unrest.

    When English arrived, a CVS was being looted and burned. As a community organizer, English attempted to do what organizers do: connect to the disconnected. But he wasn’t succeeding.

    “I looked at the young people in the eyes,” he recalls. “I lost my soul. I couldn’t connect with them.”

    Anthony Body, a 29-year-old Glenville resident and member of the Cleveland Community Police Commission, sees similarities here.

    “There is a sense of hopelessness,” he says.

    Isolation fuels the cycle of disenfranchisement. Without exposure to positive outcomes, there can only be so much progress. Body says due to the lack of role models in his neighborhood people were influenced by the lifestyle of rappers, drug dealers and the garbage man.

    “There is nothing wrong with being a garbage man,” he says. “But in order to choose Option B, you had to be exposed to Option B.”

    The realities of his neighborhood have taken a personal toll. Body has lost at least one family member or friend to violence every year since 2006.

    “All the trauma. The trauma of no job, the trauma of violence — the lack of family or social support — the schools,” he says, “it all drags on you when you try to better your life, so that when difficulty hits, you just go back to what you know.”

    No doubt, the persistence of violence is not just a Cleveland problem, but a national one. Homicides are up sharply in Washington, D.C., Milwaukee, St. Louis and Baltimore.

    On a mid-October trip to Ohio, FBI director James B. Comey wondered aloud: After years of declining violent crime in cities, why the uptick? “I’m not here announcing any big initiative or program,” Comey said, “but we have a lot of smart people who we brought on board after 9/11 who may be able to help look at the issue differently.”

    Cheap heroin from Mexico and the turf battles to supply what has become a nationwide heroin epidemic was one likely scenario, he offered.

    “What we’re in the midst of is a drug war,” says Hough resident and writer Mansfield Frazier, who likens today’s violence to the St. Valentine’s Day Massacre that left seven men dead in Prohibition-era Chicago.

    For Khrystalynn Shefton, a housing development manager at the Famicos Foundation — a community development corporation in Glenville and Hough — this drug war is not just an urban problem, but an everyone problem. It’s limiting the potential for struggling neighborhoods to appreciate.

    Shefton tells the story of a friend who lives off Rockefeller Park in a beautifully renovated home in Glenville. On a recent Sunday, she was enjoying tea in her sunroom. “A guy pulls up, straps up and does heroin in front of her house,” Shefton says. When he was done, the man left down Martin Luther King Jr. Boulevard to head toward Interstate 90 and back to the suburbs.

    “The pain for me in this renaissance is that as a city we have not figured out that ‘I am my brother’s keeper,’ ” she says. “It’s all connected — the ills in the suburbs and the city.”

    The roots of urban violence run deeper than the existence of a drug war. In September, the Cincinnati Enquirer investigated the Queen City’s rise in gun violence. What Cincinnati was witnessing ran counter to conventional wisdom that crime goes up in bad economic times and down in good times, offered Mayor John Cranley.

    “This is the best economy we’ve had since the Great Recession and yet crime is up,” Cranley explained. “So it’s more likely to be linked to social and cultural than economic reasons.”

    Of course, one could argue that the violence is linked to social and cultural issues stemming from economic reasons. Simply, the economy has changed rapidly since so many worked in the plants. Good economic times have been divorced from so many people, if not a generation of so many people.

    The Georgetown Public Policy Institute found that four out of the five jobs lost since the Great Recession required a high school degree or less. “The shift in the workforce from less-educated to more-educated has been a slow and steady process,” notes the authors.

    In the early 20th century, Cleveland was a magnet for European immigrants, Puerto Ricans and African-Americans because industry needed labor to produce economic growth. Manufacturing built our middle class. It enabled people to move up.

    In 1990, for example, more than 50 percent of Cuyahoga County’s African-American residents lived in heavily segregated East Side city neighborhoods, while today that number is down to 30 percent.

    That said, large-scale launchpad industries for formerly blue-collar communities are now nonexistent. Cleveland lost its old magnetism. But the children and grandchildren of the city’s factory-floored forefathers remain.

    And they are idle. Thirty-eight percent of Cleveland’s males are not in the labor force. In black majority neighborhoods such as Union Miles, Central and Glenville, those numbers approach 50 percent.

    When English first began canvassing Rust Belt cities, the Texas native was amazed at the number of black men standing on the corners. In Baltimore, he got to know many of them.

    “We have always been on the corners,” English recalls one of them telling him. “The difference then is that we had lunch pails, and we were waiting for a ride to the steel mills.”

    While English has been making that point for years, corporate and civic leadership in Baltimore are just now coming around to it, he says. “The unrest in Baltimore and the day-to-day violence in Cleveland — it’s a jobs issue.”

    Body, a good neighbor ambassador supervisor with the Northeast Ohio Sewer District, echoes the sentiment. “People where I live just want opportunity,” he says. “They want to work. Every generation up to recently had [opportunities to work] handed down, somewhere in between it stopped being handed down.”

    Body, who earned a business degree from Malone University while on a football scholarship, considers himself blessed. His parents and higher education taught him critical-thinking skills. He became better prepared for today’s economy. He found his place — and Glenville is a part of it.

    “I’m still playing the dozens and breaking bread with my community,” he says. “I’m trying to express to folks there is another way.”

    But too many of them can’t see it, he says. “The feeling in most folks is disappointment for not being able to join with it.”

    ——–

    There is an understanding in geopolitics that everything local is global. What you see happening on the corner is tied together, whether that’s a vacant house and a skeletal factory or a condo development and state-of-the-art medical research facility.

    It is correlated to Cleveland’s relationship with and relevance in the world. One set of aesthetics are birthed by severing from our economic past, and the other birthed from ties to our economic future.

    In between these aesthetics are people.

    Yes, a younger, more educated generation has found aspiration in Cleveland’s core. Yet to think Cleveland can come back by deepening the pattern of isolation versus prosperity is to ignore a basic tenant of modernization: With evolution comes progress — not just economically, but humanly.

    Cleveland’s rebirth is in its infancy. The city is still alive in the shadows of all it has lost, making it possible for a consciousness to be reborn right.

    Part of this entails learning from the lessons of Baltimore. There, like in Cleveland, the city’s economic transformation is largely spearheaded by the education and medical sectors centered around Johns Hopkins University and Johns Hopkins Hospital in East Baltimore.

    Recently, in the face of Baltimore’s social unrest, the two institutions joined in an initiative called HopkinsLocal. The point is simple: Tackle social and health issues in Baltimore by engaging the city’s poorest residents and preparing the unprepared. By 2018, they plan to fill 40 percent of targeted positions by hiring from within the city’s most distressed communities. In all, it is one of the more robust buy local anchor institution policies in the nation.

    Locally, programs to do something similar with anchor institutions have been developed, particularly the Evergreen Cooperatives. The worker-owned co-ops based in Cleveland’s East Side are contracted out to sell local goods and services to global institutions such as the Cleveland Clinic. While innovative, the efforts need scaling. Discussions are happening in Cleveland to do just that.

    For English, the urgency couldn’t have come too soon.

    “It’s a generational moment,” he says. “In the future, people will look back to now and ask, ‘How did we respond?’ “

    This piece first appeared in Cleveland Magazine.

    Richey Piiparinen is a Senior Research Associate who leads the Center for Population Dynamics at the Levin College of Urban Affairs at Cleveland State University. His work focuses on regional economic development and urban revitalization.

  • Brain Drain Hysteria Breeds Bad Policy

    Desperate times call for desperate measures. The Rust Belt, a region familiar to the air of anxiety, knows this all too well, particularly the “desperate measures” part.

    A case in point: During the 1990’s, Pittsburgh, like many of its Rust Belt peers, was in the midst of a fit of brain drain hysteria. Strategic policy was needed. So the powers that be thought of a marketing campaign meant to saturate the minds of the educated “young and the restless” who were thinking about exiting the Steel City. Pittsburgh demographer and economist Chris Briem, in a 2000 op-ed in the Post-Gazette, picks it up from here:

    “The focus on retaining vs. attracting workers is pervasive in local policies. One marketing character thought of by the Pittsburgh Regional Alliance, whose mission is to promote Pittsburgh, was the genial "Border Guard Bob." The image was of an older, uniformed sentinel on Pittsburgh’s borders keeping our citizens, in particular the younger workers, from leaving the region. This is the same logic that inspired the East Germans to build a wall around Berlin and is likely to have as much success in the long-run.”

    Luckily for Pittsburgh, Border Guard Bob never materialized. Policy-wise, building walls is terrible form in the age of information. Still, the aura of desperation remained in the region, despite its illogicality. For instance, in his 2002 piece called “Young people are not leaving Pittsburgh”, Briem crunched the numbers to find the region’s brain drain wasn’t. Yet he found it hard “to convince Pittsburghers that the outmigration of youth is not the problem it once was,” blaming “a persistence of memory” stemming from the regional exodus in the 1980’s.  

    As a demographer and economic thinker in Cleveland, I can sympathize with Briem. Cleveland, too, is prone to bouts of brain drain hysteria. A recent report highlighted in the New York Times called “The Young and Restless and the Nation’s Cities” was enough set off a flare-up. The report found that between 2000 and 2012, Greater Cleveland added less than 800 25- to 34-year-olds with a college degree—an increase of 1%. The metro ranked second last out of 51 metros, behind only Detroit.

    Obviously, those numbers are not good. That said, from a methodological standpoint, the study has its limitations. Specifically, the analysis cuts through four economic eras: 2000, the end of a prolonged expansionary period; 2005 to 2007, the middle of a jobless economic recovery; 2008 to 2010, the throes of a deep global recession; and 2011 to 2012, a period of economic recovery.

    Why does this matter? Migration patterns are affected by quite different economic circumstances nationally. This is especially true for the 25- to 34-year-old cohort, who are the most mobile, if not fickle, group.

    For example, Greater Cleveland’s lack of a young adult brain gain from 2000 to 2012 resulted from a substantial decrease of nearly 16,000 25- to 34-year-olds with a 4-year college degree from 2000 to 2006. The 2001 recession and subsequent jobless recovery hit Cleveland hard. However, my research at the Center for Population Dynamics at Cleveland State University showed that Greater Cleveland recouped the losses from earlier in the decade, gaining approximately 17,000 25- to 34-year-olds with a 4-year degree from 2006 to 2012—an increase of 23%.

    Moreover, the Census recently released data for 2013, which allows a comparison of the nation’s top big-city metros for 2011 to 2013: the current era of economic recovery. Put simply, what large metros have the momentum? Has there been a shift in where the “young and the restless” are attempting to settle down?

    The results are surprising. Cleveland ranks 3rd in the nation, with a 19.85% increase in the number of young adults with a college degree, behind the Sun Belt metros Nashville and Orlando. And no, this percentage “pop” for the region is not simply due to the fact that Cleveland had a really small base of young college graduates. In fact, the region’s 3-year gain of 15,557 ranks Cleveland 15th in total gains, despite being the 29th largest metro in the nation. To put this in perspective, Greater Cleveland had a larger total growth than Chicago, and nearly seven times the gain of Portland: the nation’s poster child for where the “young and restless” go to “live, work, play”.

    Table 1: 25-to-34-year-olds with at least a Bachelor’s degree, Change, 2011 to 2013
    Metro Area 2011 2013 % Change 2011 to 2013 Total Change 2011 to 2013
    Nashville-Davidson–Murfreesboro–Franklin, TN 82,588 103,239 25.01% 20,652
    Orlando-Kissimmee-Sanford, FL 83,706 101,066 20.74% 17,361
    Cleveland-Elyria, OH 78,392 93,949 19.85% 15,557
    Riverside-San Bernardino-Ontario, CA 97,804 116,767 19.39% 18,963
    Jacksonville, FL 47,792 56,256 17.71% 8,464
    Austin-Round Rock, TX 119,482 138,240 15.70% 18,758
    Seattle-Tacoma-Bellevue, WA 208,647 240,267 15.15% 31,620
    Sacramento–Roseville–Arden-Arcade, CA 77,075 87,435 13.44% 10,360
    Salt Lake City, UT 55,036 62,124 12.88% 7,088
    Pittsburgh, PA 117,402 131,770 12.24% 14,368
    Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 306,271 341,220 11.41% 34,948
    Columbus, OH 106,144 118,224 11.38% 12,080
    Houston-The Woodlands-Sugar Land, TX 266,289 295,230 10.87% 28,941
    Buffalo-Cheektowaga-Niagara Falls, NY 52,231 57,727 10.52% 5,496
    Dallas-Fort Worth-Arlington, TX 296,927 327,330 10.24% 30,403
    New Orleans-Metairie, LA 54,104 59,616 10.19% 5,512
    San Jose-Sunnyvale-Santa Clara, CA 135,306 148,978 10.10% 13,672
    Detroit-Warren-Dearborn, MI 154,542 170,122 10.08% 15,580
    San Francisco-Oakland-Hayward, CA 320,585 350,490 9.33% 29,904
    Baltimore-Columbia-Towson, MD 150,003 163,941 9.29% 13,938
    New York-Newark-Jersey City, NY-NJ-PA 1,216,127 1,327,778 9.18% 111,651
    Los Angeles-Long Beach-Anaheim, CA 631,960 688,057 8.88% 56,098
    St. Louis, MO-IL 134,267 145,978 8.72% 11,710
    Oklahoma City, OK 58,027 63,084 8.71% 5,057
    San Antonio-New Braunfels, TX 85,240 92,524 8.55% 7,284
    Hartford-West Hartford-East Hartford, CT 59,780 64,784 8.37% 5,004
    Denver-Aurora-Lakewood, CO 163,026 176,237 8.10% 13,211
    Milwaukee-Waukesha-West Allis, WI 79,404 85,793 8.05% 6,390
    Louisville/Jefferson County, KY-IN 50,790 54,849 7.99% 4,060
    Virginia Beach-Norfolk-Newport News, VA-NC 67,664 72,888 7.72% 5,224
    Tampa-St. Petersburg-Clearwater, FL 99,316 106,504 7.24% 7,187
    San Diego-Carlsbad, CA 167,735 179,850 7.22% 12,114
    Birmingham-Hoover, AL 47,340 50,675 7.04% 3,335
    Kansas City, MO-KS 102,284 109,455 7.01% 7,171
    Rochester, NY 48,844 52,212 6.90% 3,368
    Boston-Cambridge-Newton, MA-NH 348,490 371,303 6.55% 22,813
    Phoenix-Mesa-Scottsdale, AZ 163,995 174,694 6.52% 10,699
    Providence-Warwick, RI-MA 64,205 68,349 6.45% 4,144
    Raleigh, NC 76,164 80,447 5.62% 4,283
    Indianapolis-Carmel-Anderson, IN 91,083 95,827 5.21% 4,744
    Las Vegas-Henderson-Paradise, NV 59,998 63,058 5.10% 3,060
    Cincinnati, OH-KY-IN 95,084 99,225 4.36% 4,142
    Minneapolis-St. Paul-Bloomington, MN-WI 214,755 223,640 4.14% 8,885
    Washington-Arlington-Alexandria, DC-VA-MD-WV 460,693 477,706 3.69% 17,013
    Chicago-Naperville-Elgin, IL-IN-WI 558,464 572,324 2.48% 13,860
    Atlanta-Sandy Springs-Roswell, GA 272,907 279,232 2.32% 6,325
    Portland-Vancouver-Hillsboro, OR-WA 119,490 121,794 1.93% 2,304
    Miami-Fort Lauderdale-West Palm Beach, FL 221,294 224,388 1.40% 3,094
    Richmond, VA 59,907 59,289 -1.03% -618
    Memphis, TN-MS-AR 52,911 49,412 -6.61% -3,499
    Source: ACS 1-Year, 2011, 2013 Note: Charlotte was removed from the analysis due to substantial geographic changes in the MSA designation from 2011 to 2013. Created by the Center for Population Dynamics at Cleveland State Univeristy, October, 2014. 

     

    What gives?

    Part of the answer may be economic. For example, my colleagues Joel Kotkin and Aaron Renn recently analyzed the growth in per capita GDP from 2010 to 2013 for Forbes in a piece entitled “The cities that are benefiting the most from the economic recovery”. Cleveland ranked 15th in the nation, with a 6% increase. In terms of income, the metro is 5th in the nation in the total per capita income increase from 2010 to 2012, behind Houston, San Jose, Oklahoma, and San Francisco.

    In understanding Cleveland’s nascent young adult brain gain, the broader economic performance is important. Healthier economies make metros “stickier” for those here and more of a magnet for those who aren’t. And while there also is the element of “Rust Belt Chic”, or the lure of so-called “authentic” places that counter the “Brooklynization” of American cities, Cleveland as a destination, or a “consumer city”, will always take a back seat to Cleveland as a “producer city”, which is a metro of good jobs, good schools, and affordable housing. The producer city focuses on the creation of value, not simply the consumption of things. This is not to say amenities, such as a good culinary and microbrew scene, are not important, it only says that if the talent you attract has nothing to produce or nowhere to live, well, all play and no work makes Jack a dull boy.

    Talent attraction, then, is only part of the formula in Cleveland’s ongoing and difficult economic restructuring. Talent production is also needed, for both natives and newcomers, regardless of the age group. But emphasizing the latter entails knowing the score on the former. Brain drain hysteria breeds desperation.

    And desperate times call for desperate measures—and bad policy.

    This piece first appeared at Crains Cleveland.

    Richey Piiparinen is a Clevelander, writer, and Senior Research Associate heading the Center for Population Dynamics at Cleveland State University.

  • Cleveland, LeBron, and the Evolution of Collective Shame

    “Shame is fear of humiliation at one’s inferior status in the estimation of others.”—Lao Tzu.

    Sitting with fellow Clevelanders at a since-demolished bar, July 7th, 2010, LeBron James, local boy, uttered the words that hurt: “I am taking my talents to South Beach”. It was a shot heard around the world, but felt sharply inside the Rust Belt city’s heart.

    “He had before invoked all the connotations of home, only to leave it,” wrote Cleveland sports columnist Bill Livingston the next day, in a piece entitled “By rejecting his hometown team, LeBron James earns his slot on the [Art] Modell list of shame”. Livingston upbraided LeBron for scheduling a cable event to “exploit this city’s suffering”. His words were intent on shaming LeBron for leaving, yet in doing so reared Cleveland’s collective shame for having again been left.

    Collective shame is an underappreciated subject. But it, like other collective emotions—think fear and pride—run our societies as noted by the great sociologist Emile Durkheim.

    For decades, Cleveland has been held together by a solidarity in loss, especially the collective shame that came with it. Unlike guilt, which is about what one did, shame is an affront on the self, or what one is.
    And what was blue-collar Cleveland without a wealth of blue-collar jobs? It was a city of losses—be it of income, population, and a way of life.

    Walk down many Cleveland streets and you can see how this loss has played out in disinvestment. Often, the effect on the viewer is the same: status was here, but no longer. The constant reminders of loss give shame currency. Cleveland is not alone here. Cities the world over are afflicted with the hangovers of history. From the “Geography of Melancholy” in the American Reader, the author writes:

    Nearly every historic city has its brand of melancholy indelibly associated with it—each variety linked to the scars the city bears. Lisbon has its saudade: a feeling of aimless loss tied to the city’s legacy of vanishing seafarers, explorers shipwrecked in search of Western horizons. Istanbul has huzun: a religiously-tinged brand of melancholy rooted in the city’s nostalgia for its glorious past.

    Instead of seafarers, Cleveland had steelworkers, and others who’ve had their working-class status stripped. Yet while the loss was personal, it was the result of macro forces, leaving many feeling powerless and alone. This aloneness was tied up in the feeling of shared suffering. “The very fact that shame is an isolating experience,” notes the author of “Shame and the Social Bond”, “also means that if one can find ways of sharing and communicating it this communication can bring about particular closeness with other persons.”

    There are many ways collective emotions are shared. Much of the vessels are informal. Think oral tradition and rumors. Fashion is another channel, like a city’s t-shirts. In fact perhaps nothing says implicit understanding between natives like city mottos emblazoned chest level. Cleveland’s most famous t-shirt said simply: “Cleveland—you’ve got to be tough”. It was made in 1977, in the heyday of the city’s decline. You had to be tough in the face of a post-industrial headwind. Today, iterations remain on this “the world is against us” mentality. “Defend Cleveland” and “Cleveland VS Everybody” t-shirts are worn liberally. Another favorite that tips more toward shame than to a defensiveness against judgment says: “Cleveland Low Life”—a play on “Miller High Life”.

    Is all this productive? No doubt, collective shame, according to scholars, can strengthen the bonds between members of a group which, in turn, can lead to a process of self-exploration and restoration of a social identity. Or it can be chronic. Cleveland is well-known for its self-flagellation. It’s especially obvious to folks who aren’t native Clevelanders.

    “I have, in fact, never lived in a place whose proud residents so consistently and gleefully disrespect their hometown as Cleveland,’ notes legendary Jeopardy champ Arthur Cho in his recent Daily Beast piece “Cleveland Comes Crawling Back to LeBron: The Masochism of Rust Belt Chic”. Cho, a Cleveland newcomer, goes on to write that though he hates to “engage in victim-blaming”, the reason “everyone dogs on Cleveland is that we ask for it”. Why? Cho concludes: “If we weren’t suffering, we wouldn’t be Cleveland anymore.”

    But this Cleveland mindset does little for opening the region up to new ideas. Just as the messages become defensive, so do the policies and politics. Nativist culture reigns. Nepotism and patronage become the grease that runs the status quo. And so the communal shrouding effectively disables the possibility of possibility. Hence, the region’s struggles in its economic restructuring in the era of global connectivity.

    In that sense, Cleveland’s collective shame can be a source of bad policies which ensure the collective shame. But why would a city want to do that, albeit implicitly, subconsciously?

    “Economic struggle can be a cultural unifier in a community that people tacitly want to hold onto in order to preserve civic cohesion,” writes urban theorist Aaron Renn in Governing. Beyond that, those with power can lose it with community change. Continues Renn:

    …[I]t isn’t hard to figure out that even in cities and states with serious problems, many people inside the system are benefiting from the status quo.

    They have political power, an inside track on government contracts, a nice gig at a civic organization or nonprofit, and so on. All of these people, who are disproportionately in the power broker class of most places, potentially stand to lose if economic decline is reversed. That’s not to say they are evil, but they all have an interest to protect.

    Does this mean Cleveland is doomed? Hardly. The region is experiencing a brain gain. It has incredible assets—namely, its educational, hospital, and cultural institutions—that have been dragging it along toward a point of turning the page. But more is needed. Specifically, more perspective—a perspective that the city’s inferiority complex isn’t about what others think of Cleveland, but about what Clevelanders are compelled to think about themselves.

    Which brings us back to LeBron. Soon after his announcement that he was leaving, The Onion wrote a satirical piece called “Despite Repeated Attempts To Tear It Down, Massive LeBron James Mural Keeps Reappearing”. In it, the iconic “We are All Witnesses” banner keeps hauntingly resurfacing. At one point in the piece, city workers removed it panel by panel, “only to find an identical mural hanging directly behind it”. The article ends, “As of press time, nobody outside the Cleveland area had seen the mural once since it was originally taken down…”

    The takeaway, then: When suffering has become your identity, you have clearly suffered long enough.

    Cleveland’s path to progress means letting go of that which has stubbornly remained. There’s hope that the change is coming, largely due to the presence of the new generation. 

    In many ways LeBron is an embodiment of the next generation of Cleveland and the Rust Belt. His return epitomizes possibility. No, I am not talking about championships here, nor the collective Prozac-effects that a parade down E. 9th St. would have on the region’s psyche. Instead it is about perspective.

    The day LeBron announced his decision he was leaving Cleveland, he was in Akron. According to an ESPN piece, he knew the decision would hurt people, and that nothing would ever be the same for him. “Somehow he got through the final day of his annual basketball camp in Akron without confessing,” the authors write. “By the time [former teammate] Damon Jones drove him to the airport, where he would fly to Connecticut and reveal his infamous decision to the world, there was a lump in his throat.”

    LeBron, like all sons and daughters of the Rust Belt, is a product of collective shame, and so his self-battle with leaving is no surprise. But sometimes leaving is the answer. No person should ever self-sacrifice out of a loyalty to place. And sometimes coming home is the next answer. If only because intermittent personal aspiration will often take a backseat to that evolutionary and endearingly human need to belong.

    The secret sauce, here, is the perspective gained in the journey. And then bringing it back to a community that could use more than its fair share.

    Richey Piiparinen is a Clevelander, writer, and Senior Research Associate heading the Center for Population Dynamics at Cleveland State University.

    Lead photo courtesy of Michael Lapidakis.

  • The Ugly City Beautiful: A Policy Analysis

    When it comes to the future, Detroit and San Francisco act as poles in the continuum of American consciousness. Detroit is dead and will continue dying. San Francisco is the region sipping heartily from the fountain of youth. Such trajectories, according to experts, will go on indefinitely.

    Harvard economist Ed Glaeser has a grim outlook for the Rust Belt. “[P]eople and firms are leaving Buffalo for the Sunbelt because the Sunbelt is a warmer, more pleasant, and more productive area to live,” he writes in City Journal.

    Glaeser echoes this sentiment in a recent interview with International Business Times, saying “[s]mart people want to be around other smart people”, and the Rust Belt has a long slog ahead given that “post-industrial city migration is dominated by people moving to warmer climes”.

    But is this true? Is there a “brain drain” from the Rust Belt to the Sun Belt and Coasts? In a word: no. But Rust Belt leaders have bought this narrative hook line and sinker, and the subsequent hand-wringing has led to wasteful public investment.

    “Michigan’s cities must retain and attract more people, including young knowledge workers, to its cities by making them attractive, vibrant, and diverse places,” reads a 2003 memo from the National Governor’s Association about Michigan’s “Cool Cities” campaign.

    But the campaign struggled. “Government can’t mandate cool,” reflected Karen Gagnon, the former Cool Cities director. “As soon as government says something is cool, it’s not.”

    What’s worse, “cooling you city” with talent attraction expenditures can exacerbate economic disparities on the ground. Cities, like Chicago, are increasingly becoming bifurcated cities based on faulty assumptions that “trickle down urbanism” works. That said, the challenge of the day—for not only Rust Belt cities, but all cities—is not “brain drain”, but “brain waste”. Those cities who can best rebuild middle class communities tied to emerging markets will be the future of investment, like they were in the past.

    Through Rust-Colored Glasses

    When a people fall from grace, the sentiment of decline tends to stick. The Rust Belt’s demise is cemented. Meanwhile, the future is elsewhere. Like toward the sun. For instance, from 2000 to 2010, the Sun Belt metros of Houston, Dallas, Atlanta, Riverside, Las Vegas, Miami, Orlando, and Phoenix experienced the largest population growth. The biggest losers? It’s a “who’s who” of Rust Belt metros, led by Detroit, Cleveland, Pittsburgh, and Buffalo.

    America is a country governed by growth: big cars, big belt buckles, big houses, and big populations. Shrinkage is weakness. It is a sign of place failure. The problem here is that population growth is an ineffective, broad-brush measure when trying to understand regional underlying dynamics. A new study by Jessie Poon and Wei Yin in the journal Geography Compass called “Human Capital: A Comparison of Rustbelt and Sunbelt Cities” details exactly that.

    In it, the authors compare human capital levels between the Sunbelt metros in California (including San Francisco and L.A.), Nevada, New Mexico, and Arizona with Rust Belt metros in Michigan, Ohio, Indiana, Pennsylvania, and upstate New York. When it comes to share of population with a college degree, the authors find that the Rust Belt is experiencing a brain gain equal to their Sun Belt peers from 1980 to 2010. Poon and Wei also found that skill ratios of immigrants is higher in the Rust Belt than Sunbelt. The authors note that despite population decline, the Rust Belt continues “to be important sites of human capital accumulation”.

    The study coincides with recent work out of the Center for Population Dynamics that shows Greater Cleveland’s number of 25- to 34-year olds with a bachelor’s or higher increased by 23% from 2006 to 2012, as well as Pittsburgh economist Chris Briem’s work that shows the metros of Pittsburgh, Detroit, and Cleveland rank 1st,, 6th, 7th in the country respectively when it comes to the number of young adults in the labor force with a graduate or professional degree.

    Beyond human capital, the Rust Belt continues to produce and export wealth at a massive pace. The “Chi-Pitts” mega-region, which mirrors the Rust Belt boundaries with the addition of Minneapolis, generates $2.3 billion in economic output, second only to the “Bos-Wash” mega-region that makes up the Northeast Corridor.

    Also, using IRS migration data from the 2009-2010 period, a team of researchers led by Michal Migurski showed that Los Angeles County, New York County, and Cook County sent the most people and money to the rest of the United States. Detroit’s Wayne County was fourth. Cleveland’s Cuyahoga County was 9th, one spot ahead of San Francisco County. Speaking to Esquire, which published the work in a visual called “Where Does the Money Go”, Migurski explains the findings:

    "We realized that if you look at the biggest ‘losers,’ essentially what you’re looking at are the biggest cities in the U.S.," Migurski says. One of those losers: New York County, which lost $1,306,548,000 and 15,100 people. "But does that actually mean New York is a big loser?" Migurski asks. "One of our ideas was that, you’re not a loser if you’re losing money. You’re an exporter." The sort of exporter, he says, that boosts the rest of the U.S. economy. Traditional Sun Belt retirement areas comprise the gainers; areas like South Florida and Southern California in particular, create what Migurski calls "money sinks."

    Still, the notion of “loser” for Wayne and Cuyahoga County sticks, despite evidence to the contrary. But why? Why the constant “poor post-industrial people” sentiment, if not a low-grade captivation that comes with “ruin porn” rubbernecking?

    Well, if an ideal exists—you know, the experts beckon: be the “new” city, the “hot” city, the “creative” city—then a study in contrasts is necessary. The Rust Belt, with its connotations of smoke stacks and demographic decline, fits the bill.

    “[Richard] Florida suggests that Rustbelt cities’ high concentration of less creative blue-collar workers also produces unhappy residents,”Poon and Wei conclude in their Rust Belt/Sun Belt study. “We suggest that such a doom and gloom picture of urban and regional development for the uncool industrial Rustbelt needs to be tempered with a trend of brain gain that is growing across cities in the region.”

    But for this tempering to happen a clearer understanding of the importance of accumulating human capital needs to be ascertained. More exactly: Is it to put your city to work, or to “live-work-play”?

    Build it and they will…what?

    In his 1921 work Economy and Society, social scientist Max Weber details a city’s raison d’etre. Cities can be producer cities, wherein importance is derived from industries that demand national and international trade. Think Detroit and cars. Additionally, cities are consumer cities, in which growth is tied to how much is spent consuming goods and services in the local economy. Think eating, drinking, and buying houses.

    The cities that are the most economically robust have wealth generated from global production, which in turn enables local consumption. San Francisco’s tech economy drives it real estate market and artisanal toast scene. That is, if the question was “What came first, the farm-to-table chicken or the egghead?” The answer is “the egghead”, hands down.

    But this logic—i.e., in order to go to a restaurant, you need a job, and your job prospects are tied to the viability of your region’s global industries—is often turned on its head in economic development. Here, the goal is growth, no matter the rhyme or reason.

    “Like in many Sun Belt cities,” writes a Seattle Times columnist and Sun Belt expat, “Phoenix’s economic plan devolved into merely adding people, no matter the enormous long-term costs”. The columnist goes on to note that while the population has boomed, the city lags on most measures, such as per capita income (see Figure 1 below).

    Moreover, the Phoenixes of the world exist partly because of retired Baby Boomers and the disposable income that comes with it. The Sun Belt feeds off the legacy of production in the Northeast and Midwest. Other cities, like Portland, are fed by a not dissimilar dynamic. But it’s not the retired who come, rather the pre-retired.

    “The Portland metro area’s young college-educated white men are slackers when it comes to logging hours on the job,” lead’s a piece in the Oregonian about a study conducted last year, “and that’s one reason people here collectively earn $2.8 billion less a year than the national average.” Figure 1 demonstrates Portland’s sluggish income gains compared to Rust Belt peers Pittsburgh and Cleveland.

    Similarly, in a paper circulated by the Federal Reserve Bank of Atlanta, the author analyzed the top 86 “brain gain” metros in the nation to determine whether or not a region’s increase in human capital was paying off in terms of per capita income, labor force participation, poverty rate, and unemployment. The author found Portland was one of twelve metros that experienced zero economic outcomes. Pittsburgh scored 4 for 4. The authors suggest that talent attraction and retention—when untethered to production capacity—“may be largely inefficient, a kind of traditional economic development ‘buffalo hunting’”.

    Portland is perhaps America’s consummate lifestyle city. No doubt, the city has experienced a significant brain gain over the last decade. Portland is a talent attraction model. But it is not a talent producing or refining model. Rather, Portland is producing a scene that is run by the consumption of the scene’s aesthetic. Writes one young worker who left:

    “I can’t stay too long because I know if I stayed a day too long in Portland, I’d suddenly be happy to embrace the slow pace of the city and stop working… I’d end up getting sleeping real late every day, drink some coffee, maybe write some poetry on my porch (or not), and then find a part time job selling cigars like I had in college.”

    The lesson is that accumulating talent is not enough. There has to be something for the talent to do, or a context that fosters “doing”. It is also a warning for cities investing in the lifestyle game. Spending on creative class amenities ensures nothing. Creating a field of dreams won’t pay the bills. But it will run up the tab.

    The Ugly City Beautiful

    In 1998, the Chicago Sun-Times ran a piece called “Building the City Beautiful”. “The mayor of the city of Chicago, Richard M. Daley, is a big admirer of Martha Stewart,” it begins, before describing Daley’s plans to begin the "Martha Stewart-izing" of Chicago. The article goes on to quote a University of Illinois at Chicago professor who said Chicago is turning from a producer city to a consumer city. "The producer city was the industrial city — the smoke and the noise and the industrial jobs,” noted the professor. “The consumer city is the city of Starbucks, boutiques and so forth.”

    The professor was only partly right. By the 1990s, Chicago was indeed becoming brainier. But its emerging knowledge economy was an outgrowth of its “big shouldered” manufacturing base. Columbia University professor Saskia Sassen recently noted that pundits overlook this when examining the city’s transformation, with the bias being that “Chicago had to overcome its agro-industrial past, [and] that its economic history put it at a disadvantage”. Notes Sassen:

    [I]n my research I found that its past was not a disadvantage. In fact, it was one key source of its competitive advantage. The particular specialized corporate services that had to be developed to handle the needs of its agro-industrial regional economy gave Chicago a key component of its current specialized advantage in the global economy.

    Similar economic transformations from legacy cost to legacy asset are found throughout the whole of the Rust Belt. Pittsburgh, for instance, no longer provides the muscle for steel making, but it does act as the “brain center” for the world’s steel frame. How this came about is detailed in the article “Pittsburgh’s evolving steel legacy and the steel technology cluster”.

    With the arrival of the new economy also came “new economy” tastes. Sassen noted that when she arrived in to study in Chicago in the 90s she was greeted by “old lofts transformed into beautiful restaurants catering to a whole new type of high-income worker—hip, excited, alive.”

    In other words, local consumption patterns began setting up around the emergent worker demand. Going was the Italian Beef and arriving was pickled beets. This demand also impacted housing, with the attraction to urban living setting the stage for gentrification. This, in a nutshell, is the dynamic driving the transformation of urban neighborhoods nationwide: a new economy demands new workers which in turn demand a new kind of lifestyle. The problem, though, is that leaders have the causality backward, or that creating a new lifestyle will incur new worker supply and then poof: new industries. But as we see with Portland, it is not that easy. The industrial DNA and social history of your city matters more than the cosmetics atop the topography.

    Still, from a policy and strategy standpoint, it is easier just to make your city “cool”. And that’s exactly what Chicago has been doing at a significant pace. In a recent piece entitled “Well-healed in the Windy City”, author Aaron Renn details Mayor Rahm Emanuel’s policy of using tax-increment financing (TIF) to create geographic “winners” and “losers” across Chicagoland. “The true purpose of Chicago’s TIF districts—which now take in about $500 million per year,” writes Renn, “appears to be tending to high-end residents, businesses, and tourists, while insulating them from the poorer segments of the city.”

    The strategy was spelled out explicitly by Mayor Emanuel during a recent ribbon cutting for a bike path in Chicago’s Loop. Said Emanuel: “I expect not only to take all of their [Seattle and Portland’s] bikers but I also want all the jobs that come with this, all the economic growth that comes with this, all the opportunities of the future that come with this.”

    Notwithstanding the faulty logic in the strategy—e.g., if Portland lacks the jobs for its residents, how can it supply jobs for Chicagoans—the real problem is the costs associated with such bifurcated investment. In West and South Chicago, the byproducts of the City Beautiful approach are downright ugly. But they are not unexpected. They are the long-documented economic and social effects of concentrated poverty and segregation. Continues Renn:

    Safety levels in Chicago can no longer be plotted on a single bell-shaped curve for the entire city. Today, that curve is split into two—one distribution for the wealthy neighborhoods and one for the poor ones. A lack of resources is part of the problem: the police department is understaffed… While the city budget is tight, failing to increase police strength during a murder epidemic is a profound statement of civic priorities.

    Urban priorities flow from a perception of what is at stake. For long, the push for human capital accumulation has pitted city versus city amidst the backdrop of an urban popularity contest in which the “winner” is assured nothing outside of popularity. But victory in the vanity game is fleeting. The young and the restless are exactly that, and many people who come to New York or San Francisco, or for that matter Portland, leave as they get older and seek out affordable places to raise a family. What remains on the ground is the reality of brain waste. Without the prioritization of equitable, integrated middle-class neighborhoods a city’s progress will be always be disparate, if not illusory. Talent attraction is but part of a redevelopment process. So is talent refinement for those arriving and talent production for those in place. After all, neighborhoods are factories of human capital. Building people, not places, is what a successful city is all about.

    But to know this is to “know thyself”. The Rust Belt has been dying for some time now, so say the experts. The region has absorbed the projections, and given that desperate times call for desperate measures investment has been wasted. “[Creative class theory] is bad because it distracts from what’s important,” says Sean Stafford, author of Why the Garden Club Couldn’t Save Youngstown.

    Regaining focus entails removing the rust-colored glasses. Rust Belt leaders will see there are assets to work with, not to mention feel the freedom that comes with no longer being a study in contrast for those touting a future that really isn’t.

    Richey Piiparinen is Senior Research Associate at the Center for Population Dynamics at the Maxine Goodman Levin College of Urban Affairs at Cleveland State University. The Center for Population Dynamics at Cleveland State University’s Maxine Goodman Levin College of Urban Affairs aims to help partner organizations competitively position the region for economic and community development. It will do so through the lens of migration, applied demography, and culture.

    Lead photo courtesy of bctz Cleveland

  • Population Growth as the Cure for the Incredible Shrinking City?

    The 1957 sci-fi classic The Incredible Shrinking Man reads like a Rust Belt city script. In it, the lead actor is afflicted with the anti-natural: shrinkage in a world of growth. The rest becomes existential. From the movie review blog “Twenty Four Frames”:

    He hates being a scientific experiment and a spectacle for the media. He is no longer the everyday 1950′s image of the middle class, white picket fenced American man. Instead, he now fights for survival in his own house where everyday objects are now the enemy to his existence. Finally, he must face the biggest question of all. If he continues to shrink, will he eventually even exist?

    Such is the mood behind revitalization efforts in shrinking city America, particularly the Rust Belt. There, population decline has been occurring for decades. It still occurs. The Cleveland metro lost nearly 83,000 people from 2000 to 2012. The Pittsburgh metro lost over 67,000. This is in contrast to the region’s “greenfield economies”—defined as “the set of conditions that flow from building on new territory or exploiting new markets vs. the redevelopment of old places”. For example, the geographically-expanding Columbus metro added 260,000 people from 2000 to 2012. The top feeder region into Columbus was Greater Cleveland.

    The dynamics behind these demographic patterns are fairly intuitive. Population gains and losses are a factor of a region’s employment picture. Cleveland Fed economist Joel Elvery explains:

    Urban economists like to divide a regional economy into two sectors: tradable and nontradable. The tradable sector produces goods and services that are sold outside of the region; the nontradable sector produces goods and services for use in the region…If the industries that make up the tradable sector are growing nationally, then the region will most likely grow. If the tradable sector is struggling, eventually the region will also struggle.

    In the case of Cleveland, one of the region’s main tradable sectors is manufacturing. That said, technological advances in manufacturing means it takes less people to make a product. In the 1950s an auto worker made on average seven cars per year. A worker can make 28 today. The effect of the increased productivity is a loss of jobs. The effect of job loss is a declining population.

    Put a fork in the Rust Belt, right?

    Not exactly. Figure 1 shows the metro per capita income for Cleveland, Pittsburgh, and Columbus. The metros’ incomes were even around 2003, but then Pittsburgh and Cleveland began diverging from Columbus around 2005. Of importance here is that Pittsburgh and Cleveland have had higher per capita income growth than Columbus despite their declining population. This goes against the grain of traditional urban development thinking in which growth is god.

    Figure 1: Source, US Bureau of Economic Analysis via Telestrian

    Looking at real per capita income at purchasing power parity (PPP), or income adjusted for inflation and how far a dollar goes in a given metro, the trends hold. The map below shows the real per capita income (PPP) for all metros for the United States. Notice Greater Cleveland and Greater Pittsburgh stand out, with values at or above $42,000 a year. In fact, in ranking the nation’s largest metros (over 1 million people), the highest real per capita metros were Hartford, Boston, and San Francisco, followed by Pittsburgh 6th and Cleveland 11th. Not bad for “dying” metros. Columbus clocked in at 28th, while peer Rust Belt metro Detroit was 44th out of 51.

    Map: Map of real per capita personal income adjusted for inflation (in 2005 chained dollars) and regional purchasing power. In thousands of dollars (2011). Source, U.S. Bureau of Economic Analysis via Telestrian.

    Why is greater per capita income growth happening in the Rust Belt compared to Columbus? We have to keep in mind that a rising per capita income is not necessarily associated with a robust economy, particularly for regions that have flat or declining populations. Specifically, a metro, such as Cleveland, can gain in per capita income simply due to a significant out-migration of low- and middle-income workers. Such a scenario could prove problematic if the area’s total personal income is decreasing across time, because then the overall economy is contracting.

    But this is not the case. Figure 2 shows the total personal income for the three metros from 2000 to 2012. Both Cleveland’s and Pittsburgh’s total personal income levels increase despite declining populations. This effect has been called “growth without growth” by the Brookings Institution, and it occurs when a workforce is becoming more educated and productive at the same time overall population declines.

    Figure 2: Source, US Bureau of Economic Analysis

    This is what is happening in the Cleveland metro. Data from a new study I co-authored with Jim Russell out of the Center for Population Dynamics at Cleveland State University showed that from 2000 to 2012, Greater Cleveland gained over 63,000 educated residents, while simultaneously losing nearly 74,000 residents without a college degree. Over two-thirds of this brain gain occurred between 2006 and 2012. The fastest growing cohort was for college-educated Greater Clevelanders 65 and plus—a 30% increase. The number of Greater Clevelanders with a college degree aged 25 to 34 increased by 23%. Conversely, the vast majority of the out-migration was made by people aged 35 to 44 without a 4-year degree.

    This population dynamic is partly the result of Cleveland’s restructuring from a labor- into a knowledge-based economy. Specifically, growing tradable industries, like STEM and health care employment—which have driven job growth in Cleveland—are able to attract and retain skilled residents, whereas slower-growth industries are “pushing” less skilled workers elsewhere. Many of these non-degreed workers find a better return on investment in areas that are gaining in population, particularly if they are employed in the local consumer economy. Think laborers and much of the service class. This notion is supported by the fact that from 2000 to 2011, the average income of a person that moved from Greater Cleveland to Greater Columbus was $38,000 a year. Such a re-positioning of less-educated workers partly explains that while the Columbus metro is gaining on Greater Cleveland in total income, it is not the case with per capita income. Notes the Cleveland Fed: “Per capita income growth [in Columbus] is under increasing pressure to continue rising as population growth exceeds income growth”.

    So yes, Cleveland shrinks. But it is not about brain drain, but about rational choice theory. And while population loss is troubling for any city, it is in many respects a necessary demographic result as a region like Greater Cleveland transitions from brawn- to brain-intensive work.

    Think of this as a “one step at a time” approach to the existential plight that is the incredible shrinking city—meaning Cleveland’s migration needs are currently about quality, not quantity. This is because economic growth is not likely to be achieved through an increase in local consumption. Local jobs are created from emerging tradable industries, not vice versa—five service jobs are made for every new high-skill job in fact. And emerging industries are created via human capital, not consumer demand.

    “Consumer demand does not necessarily translate into increased employment,” writes John Papola in Forbes. “That’s because ‘consumers’ don’t employ people. Businesses do.”

    So where does Cleveland go from here?

    It needs to look to Pittsburgh. The sister Rust Belt city has had a human capital formation that has been nothing short of astonishing. University of Pittsburgh economist Chris Briem calculated that the metro ranked fifth in the nation when it came to the percentage of young adult workers with a bachelor’s degree, behind only Boston, San Francisco, D.C., and Austin. What’s more, Greater Pittsburgh ranked first for the highest concentration of young adult workers with a graduate or professional degree.

    “Change in the Pittsburgh economy is reflected in many ways,” writes Briem, “but probably no more profoundly than in the educational attainment of its workforce”.

    Greater Cleveland doesn’t perform too shabbily either, ranking 17th in the nation in the number of young adult workers with a bachelor’s degree, and 7th in the nation for young workers with a graduate or professional degree, ahead of knowledge hub darlings Seattle and Austin.

    In other words, Cleveland’s got something to build on: the quality of its young adult workforce. So instead of dumping money on brain drain boondoggles, or expending significant public expenditure on things like hotels and casinos that intend to drive economic growth from consumption on up, the region needs to pull out all the stops on growing a critical mass of talent. Because, as my colleague Jim Russell puts it, “talent is the new oil”.

    Eventually, once the region’s new economy sectors are revved up, then job growth for both skilled and less skilled work will increase, making the region amenable to population gain. This is the case in Pittsburgh, where population loss has recently turned into a slight gain after decades of decline (See Figure 3).

    Figure 3: Source, American Community Survey, Bureau of Economic Analysis

    But until that growth happens the Rust Belt will be stubbornly mired in its existential crisis. Shrinking, struggling, and wishing on silver bullets and outdoor chandeliers. But maybe there is room for measured hope. More exactly, we shrink therefore we are?

    "I was continuing to shrink, to become… what? The infinitesimal? What was I? Still a human being?,” wonders the incredible shrinking man in the film’s closing monologue. “Or was I the man of the future?”

    Well, considering what the cost of living is doing to the coasts, maybe the notion of Pittsburgh as the city of the future isn’t so farfetched. The Clevelands of the world would be wise to wager so, and then model accordingly.

    Richey Piiparinen is a Senior Research Associate who leads the Center for Population Dynamics at the Levin College of Urban Affairs at Cleveland State University. His work focuses on regional economic development and urban revitalization.

    Top image: Courtesy of Universal Pictures

  • The Abuse of Art in Economic Development

    City building is an imperfect process. Poverty, segregation, and income disparities persist, or worsen, despite longstanding efforts to affect change. The unsightliness of these social failures are called “blight”. Blight is commonly thought to be the antithesis to beauty.

    Urban revitalization efforts have been infatuated with idea that removing blight creates the conditions for community good. Specifically, the field of aesthetics—or that branch of philosophy that deals with the principles of beauty and artistic taste—has for long been held up as a lens through which society can be ordered, with the thinking that beautification can “rehab” the masses.

    For instance, the early 20th-century upper crust framed the conditions of poverty this way: the deprived were laggards on the evolution toward modernity, and they needed aesthetic inspiration. So arose the City Beautiful Movement, whose premise, according to Julie Rose at the University of Virginia, “was the idea that beauty could be an effective social control device”.

    Put simply, outside pretty would arouse inside pretty, inspiring civic loyalty and morality in the impoverished.

    A line in the 1904 classic “Modern Civic Art, or The City Made Beautiful” puts it frankly: “[M]odern civic art can now hope to banish the slum thus to redeem the tenement and to make its own conquests thorough.”

    Cleveland tried its hand with this approach. Back in the early 1900s the city’s elites commissioned then-starchitect Daniel Burnham to create the Group Plan. The Plan called for a City Beautiful civic center, which involved demolishing downtown housing tenements and commercial structures deemed expendable, with a series of elegant Beaux Arts-style buildings eventually being constructed around a plaza-like green space, now known as the “Mall”. It was believed such a central source of civic beauty would radiate out into the city, curing ills of all types. The beauty would be timeless, without half-life—always anchoring Cleveland’s progression, like a compass of godliness.

    Courtesy of groupplan.dhellison.com

    It didn’t work. Today, Cleveland is wayward, with a poverty rate of over 30 percent, and more vacant houses than perhaps ever before. Such failures made plain the fact that impoverishment cannot be “prettied” out of the city.

    The use of aestheticism in city building has not gone away. In fact efforts have redoubled over the last decade. The idea is no longer about flushing impoverishment out of the city system, but rather using art—particularly the romanticization of the artist and the act of creation—to spark economic growth.

    In the article “Artists, Aestheticisation and the Field of Gentrification”, scholar David Ley discusses this strategy, whereby a neighborhood moves from “from junk to art and then on to commodity”, or form poor to reinvested in. The gist of the process—one with roots in 1960s France to present-day everywhere—goes something like this:

    Artists, as members of the bohemian vanguard, historically seek affordable, gritty locations. They do this out of necessity—most of the creative class is paid pittance—but also for creativeness.

    “Hardship was the price one paid for being in the thick of it,” wrote artist David Byrne in the article “Will Work for Inspiration”.

    Where artists cluster, so does the concept of anti-conformity and “cool”. Here, according to Ley, the space of the artist and the space of middle class youth overlap, bringing an era’s hipsters into a neighborhood’s fold. Things can turn quickly after that. Developers and entrepreneurs constantly sniff out the next big thing so as to buy lower and rent higher, with the scent pegged to “what the kids like”, hence the incessant “Millennial” fixation. Eventually, as gentrification continues, the artists and hipsters give way to professionals, until a landscape of wealth and conformity fills in the “starving artist” romanticism that greased its path.

    Notwithstanding which side of the gentrification debate one falls on, the fact of the matter is that this form of city revitalization—from junk, to art, to commodity—is rampant, becoming defacto neighborhood development. In Cleveland, the arts-fueled districts of Tremont, Detroit Shoreway, Collinwood, and St. Clair-Superior speaks to the popularity of this approach.

    This isn’t to say it inevitably works. There are only so many artists and hipsters to go around, and not everywhere is Portland, Austin, or Brooklyn. And so when Anywhere, USA does the art-as-development approach, things do not always go as planned.

    In the recent piece called the “Best of All Possible Worlds”, writer Mark Lane travels to Evansville, Indiana, where a public art contest sparked “a debate over class, race, and good taste”. The story details how the town’s arts district plan devolved into land-grabbing by a quasi-governmental agency whose attempt at subsidizing housing for artist attraction often turned into the demolition of stately structures, if only because getting artists to move to small town Indiana is hard.

    Courtesy of The Believer

    Courtesy of The Believer

    Beyond the wisdom of such a strategy, the piece examines the role of art as an aesthetic discipline, noting that the use of art in city revitalization is commonly not art for art’s sake, but is rather employed as a means to “fertilize” low-income neighborhoods for the arrival of the creative class.

    “It’s not about the art,” noted an Evansville city planner to Lane. “Art is just another tool for economic sustainability.”

    Such is a far cry from Picasso’s purpose of art, which is “washing the dust of daily life off our souls”.

    Curiously, you don’t hear much from the mouthpieces of the art establishment as to the way the discipline is being used: as a means to create commercial order. Historically, the beauty and need of civic art has been about allowing the brokenness of life to enter into the artist’s realm so that the pain and suffering of humanity could be recast through the value of creation. Here, the soul is the audience, with the ovation meant to reverberate into how we “do” community.

    But civic art as “junk, to art, to commodity” achieves something else. It turns the act of creation into the act of “creative classification”. And given our current economic inequalities and the erosion of the middle class, it is fair to wonder why a field that can heal the soul is being used to patch a system that adds dust to our daily living by the day.

    Richey Piiparinen is a writer and policy researcher based in Cleveland. He is co-editor of Rust Belt Chic: The Cleveland Anthology. Read more from him at his blog and at Rust Belt Chic.

    Top photo courtesy of aaronacker.com

  • Density, Unpacked: Is Creative Class Theory a Front for Real Estate Greed?

    “The heresy of heresies was common sense”—George Orwell

    The stories we tell affect the lives we lead. I do not mean to be abstract here. I mean, literally, the stories that are told make up a kind of meta-reality that soaks in us to form a “truth”. This “truth” affects policy, which affects investment, which affects bricks and mortar, pocketbooks, and power. Eventually, the “truth” trickles down into a more real reality that defines the lives of the powerless.

    The story du jour in urban policy is one of density. The arc of the story is that cities are places where “ideas come to have sex”. The lovechild is innovation. The mood lighting is creative placemaking.

    The Kama Sutra of density reads this way: creative people cluster in cities that are good at lifestyle manufacturing. The more people that are sardined the higher likelihood there will be “serendipitous” encounters. The more serendipity in a city the better chance the next “big thing” will occur. The next “big thing” will lead to a good start-up, which will lead to an agglomeration of start-ups, termed an “Innovation District”. Detroit becomes Detroit 2.0 then.

    The story of density is a seductive story. Society-making is sobering and full of harsh realities. The story of density is seamless, velvety. It is no wonder the story gets sold, implemented, and then told and re-told, despite the validity and logic of the story being pretty awful.

    Take the recent New York Times piece entitled “What It Takes to Create a Start-up Community”. In it, the writer interviews urbanist Richard Florida. “Population density, [Florida] said, allows for the serendipitous encounters that inspire creativity, innovation and collaboration,” reads one key passage in the piece.

    The story goes on to highlight the emerging tech hub of Boulder as the exemplar of the story of density. One problem: Boulder, a city of less than 100,000, isn’t dense, with a population per square mile of 3,948. The writer moves the goal posts a bit and says the city “is an unusual case of density”, before going on to question whether a start-up community can be created in a city like Detroit that “lacks density”. Yet Detroit, despite being a land mass comprised of one-third vacant land, is denser than Boulder, at 5,144 people per square mile. In all, Aristotle would have a field day with the piece.

    Such illogic peppers the story of density, particularly as it relates to the correlation—to say nothing of the causation—between household clustering and tech growth. For instance, in a recent analysis of America’s top “high tech hot spots” by the Progressive Policy Institute, the top 25 counties experiencing the highest percentage of tech job growth reads like a “Where’s Waldo” list, if Waldo was Thoreau-like. There’s Madison County in Alabama (417 people per sq. mile). Utah County in Utah (258 people per sq. mile). Denton County in Texas (754 people per sq. mile). Fayette County in Kentucky (1,043 people per sq. mile). Snohomish County in Washington (342 people per sq. mile).

    To be fair, also on the list are San Francisco, Boston, and New York. In the case of Boston and San Fran, the tech clustering is a legacy asset—including large venture capital funds — from decades prior, not the result of the story of density. New York, under Mayor Bloomberg, has supposedly gone whole hog on the “idea-sex in the city” script, yet tech is but a speck on the universe that is New York City’s economy.

    For example, Kings County, home to Brooklyn, numbers 25 on the list of places with highest percent of tech job growth, yet Brooklyn’s Job Index—calculated as new tech/information jobs between 2007 and 2012, as a share of 2007 total private sector employment—is just 0.4, meaning the number of new tech jobs in Brooklyn represents less than half a percent of total private employment. Given the information sector as a whole is hemorrhaging jobs according to a recent Harvard Business Review, the scaling of fledgling tech towns is unlikely. This is especially true for cities like New York that—while enriched with the chattering class buzz stoking the story of density—simply lacks the engineering talent of Boston, Silicon Valley, Houston and yes, Detroit , to make the “scene” something than just that: a scene.

    But let’s play along anyway, as that’s the power of the story of density: reality doesn’t bite. So, say Brooklyn can become the next Silicon Valley. This likelihood depends on two assumptions that define the story of density: “cooling” a city will draw top tech talent, and then packing them in to luxury condo towers and mixed use districts will form creativity incubators.

    First, the idea that manufacturing cool spurs a start-up scene is spurious at best. I mean, has this ever worked? Please don’t say Austin, or any number of college towns or state capitals or places with boutique streets that depend largely on transfers from taxpayers — and parents! — to their privileged burgs. Many of these place, like Austin and Raleigh, are themselves far from dense urban nodes, but are exceptionally spread out.

    What about Boulder? In the piece “How Boulder Grew Into a Hub for Start-Ups”, the writer questions venture capitalist Brad Feld, a huge player in the Boulder tech scene, about what brings entrepreneurs to communities like Boulder. Feld throws his hands in the air:

    “People want to live where they want to live. You should figure out where you want to be and build a life around it. Different geographies attract different people.”

    Why did Feld move to Boulder?

    Actually, I moved here in 1995 because Amy said "I’m moving to Boulder – you can come with me if you want." And I did.

    There are things that do appeal to innovators, however. Affordability is an appeal, so says a recent survey of London techies who are decamping from the capital, if only because outrageous rents prevent a “start-up” of anything.

    Over in Berlin, the tech scene is struggling despite the “Berlin geek chic” culture that unfolded. The city’s tech leaders think Berlin needs to be more conventional than cool. “[T]he jury is still out on whether [Berlin’s] a great place to truly grow that company into a mature startup," notes Marc Strigel, head of SoundCloud. "Both the authorities and startups could do much more in promoting Berlin for families, for these world-class talents we definitely need."

    The second assumption relates to the idea that sardining people will ultimately lead to serendipity and innovation. I smell underpants gnomes. Specifically, in an episode of South Park, creators Trey Parker and Matt Stone expose the blind loyalty attached to the façade of “expertise”. The episode goes like this: the characters need a presentation for class. One of the boys talks about a group of gnomes that inexplicably sneak into his house to steal underpants. There’s got to be a reason, right? They confront the gnomes who, claiming to be business experts, explain their business plan as thus: Step 1: Collect Underpants. Step 2: ?. Step 3: Profit.

    The story of density has the same logic gap. Step 1: Population density. Step 2: ?. Step 3: Innovation. Density gurus will claim Step 2 relates to serendipity. But serendipity is chance. How do you plan for chance? Even if you could, creative classification is largely a process of homogenization by class, age, and profession, which, according Rita King of Science House, erodes the possibility of meaningful chance encounters. “Artists bumping into other artists or business people bumping into other business people or Mormons bumping into other Mormons, etc., isn’t real serendipity,” notes King. San Francisco in many ways is more a monoculture than the highly diverse suburbs that surround it.

    Okay, so if the story of density really isn’t about innovation then what is it about? The answer can be found in a recent article entitled “Urban Prophet” in the real estate trade mag Property Week. The piece quotes Albert Ratner, chairman of US real estate firm Forest City Enterprises, on his reading of Florida’s The Rise of the Creative Classes, the first book in the story of density. “You have given real estate developers the playbook,” notes Ratner.

    Put simply, the point of sardining is to make as much money as possible for those who already  have the most . This is the raw truth that fuels the hype, and of course pays for it as well. But it’s a tough sell to neighborhoods and cities increasingly experiencing the negative effects of real estate wealth jamming, and more broadly wealth inequality. Enter the story of density to make another “truth”.

    In reality, the story of density is a fiction and it’s high time we start rewriting the book.

    Richey Piiparinen is a writer and policy researcher based in Cleveland. He is co-editor of Rust Belt Chic: The Cleveland Anthology. Read more from him at his blog and at Rust Belt Chic.

  • The Unrise of the Creative Working Class

    Scarcity leads to creativity out of necessity. That’s the pop culture meme at least. Think “starving artist,” or the survivors in Survivor. The thinking has penetrated the business culture as well. For example, in the shadow of the 2008 recession, Google founder Sergey Brin, in a letter to his shareholders, writes: “I am optimistic about the future, because I believe scarcity breeds clarity: it focuses minds, forcing people to think creatively and rise to the challenge.”

    But a recent book, Scarcity: Why Having Too Little Means So Much, by Ivy League psychologists Sendhil Mullainathan and Eldar Shafir, states otherwise. Through years of investigative research, the authors found that people operating from a bandwidth of scarcity don’t have the luxury of preemptive thought. Rather, being in survivor mode saps a person’s cognitive reserve.

    “Think about being hungry,” says Shafir in a piece in Pacific Standard. “If you’re hungry, that’s what you think about. You don’t have to strain for years—the minute you’re hungry, that’s where your mind goes.” The mental preoccupation extends to unpaid utility bills, debt, or, more generally, anything that’s life-pressing, he adds. The effect drains resources from a person’s “proactive memory”.

    Think of the absence of scarcity, then, as the freedom to think, visualize, and create. The results of Mullainathan and Shafir’s findings have implications for cities. Specifically, it’s widely theorized that cities must innovate to survive, and it is a city’s creative reservoir—which is dependent on the size of its educated workforce—that will nurture innovation. This is how  a city of soot can evolve into a city of software, not unlike what has occurred in Pittsburgh.

    But what about  Rust Belt cities struggling with high rates of poverty? Over 36 percent of Detroit’s 700,000 plus are below the poverty line. In Cleveland, the poverty rate is 33 percent of nearly 400,000. The national poverty rate is 14 percent.  This is a ridiculous amount of brain capacity consumed by unforgiving reality.  No wonder Detroit inches to get a leg up. The feral dogs, abandoned houses, and creditors looking for money have eaten up the capability to envision. Hence, the collective exasperation, and the bankruptcy death spiral.

    What will save the Clevelands and Detroits? The most prescribed cure is to find a way to attract more educated people. This has led cities across the country to compete for the vaunted “creative class” professional demographic. To urban theorist Richard Florida, to get creative types a city must have “[an] indigenous street-level culture – a teeming blend of cafes, sidewalk musicians, and small galleries and bistros, where it is hard to draw the line between participant and observer or between creativity and its creators.”

    According to Florida, a city needs to know it is on stage,and compete for the attention of a select demographic. In theatre parlance, this is called “capturing the audience experience.”  In urban place-making parlance it is called  “principles of persuasion” that emphasize novelty, contrast, surprise, color, etc.

    Robin_Williams_779552

    In other words, cities must become the collective embodiment of Robin Williams.

    Then, once you get your audience, you just watch them go,  says Florida, as creativity is “a social process.”  Creativity is bred by “the presence of other creative people.”  The scarcity of creativity in a poor city hypothetically gets filled up by the big-bang spontaneity of two creative types talking, neurologically egged on, no doubt, by a festival performer on stilts in a clown suit sauntering before them.

    If this strategy sounds like an overly simplified way to change what ails Detroit and Cleveland, it’s because it is. In fact Florida himself acknowledged this, stating in Atlantic Cities that, “On close inspection, talent clustering provides little in the way of trickle-down benefits [to the poor].”  In fact, because housing costs rise, it  makes the lives of lower- and middle-income people worse.

    But cities keep revitalizing this way because it is a feel-good prescription that is politically palatable. Who hates art, carnivals, drinking, and eating?  Displays of abundance provide the incentive to look the other way. Writes Thomas Sewell, “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics”.

    Where does that leave the millions operating on the wrong side of scarcity? Florida’s answer is for cities to somehow convince corporate America to pay their service workers more. While admirable, I doubt Daniel Schwartz, CEO of Burger King, is listening.

    Another option would be refocusing the lens through which modern urban revitalization is viewed. The default setting is to compete for scarcity of the educated elite. Instead, we should alleviate the scarcity from the struggling.  But flipping this script requires cities to give up on the idea that there is some audience that will save them. It is a city’s people who ultimately ruin or save themselves.

    In the meantime, the urban play continues. Cleveland is directing $4 million dollars of its casino windfall profits into the creation of an outdoor chandelier  that will hang at an intersection outside of Playhouse Square, the city’s theater district. The design, evoked by chandeliers inside the Playhouse itself, is intended to blur the line between drama and reality, and will “add glittery outdoor glamour to a district that tends at times to look gray and lifeless,”  according to architecture critic Steven Litt–all the while making the intersection “feel like a giant theater lobby”.

    But the script on Cleveland’s streets is one of hardship, not glittery glamour. Here’s hoping the outdoor chandelier illuminates that scarcity to those walking beneath it.

    This piece was originally published in Belt Magazine.

    Richey Piiparinen is a writer and policy researcher based in Cleveland. He is co-editor of Rust Belt Chic: The Cleveland Anthology. Read more from him at his blog and at Rust Belt Chic.

    Lead photo by David Shvartsman.

  • What Detroit Has Really Taught America

    Nothing. Seriously. Not a damn thing.

    Oh, the occasion is being used to opine on our state of affairs, but nothing is structurally taking shape in America to prevent the next Detroit from occurring. In fact, Detroit is occurring every day inside most of us. We are all getting bankrupt in so many little ways.

    America is in a precarious position. Our economy is based on consumption. Our consumption is based on our livelihood. Our livelihood is based on our employment, and in our jobless “recovery”, there just aren’t many decent jobs. With technological advances, it is likely to get worse. Writes columnist Bill McClellan in the St. Louis Dispatch:

    [T]he day is coming when trucks will drive themselves. People in the trucking industry say it is inevitable. Within a decade or so, truck drivers will be obsolete. There are currently 5.7 million truck drivers.

    McLellan continues, discussing an email he received from a reader:

    Pat B. is a conservative businessman. He wrote, “Regarding the truck drivers, I think the bigger issue is how society is going to deal with nonproductive people vs. productive people. Automation will allow ‘productive’ people to be much, much more productive than the ‘nonproductive’ people. Theoretically, a very small segment of the population could produce almost everything. How will we deal with this?”

    Good question. Currently, Detroit is ground zero of it. So much busted there, so many poor, so many with blue- and white-collar skills in the new no-collar economy. Do we let the city die on the vine? Au revoir Rust Belt?

    Well, a consensus is becoming clear. We need to “First World” Detroit. Get it and other post-industrial cities on the right path.

    Enter New York.

    Courtesy of Smithsonian

    In the late 1970′s, New York City was in trouble: the threat of bankruptcy, and the Bronx was on fire, literally, with broadcaster Howard Cosell famously being attributed to saying “There it is ladies and gentleman, The Bronx is burning” as cameras panned to a fire in an abandoned elementary school during Game 2 of the 1977 World Series. Put simply, the 1970’s NYC was not unlike the modern day Detroit—insolvent fiscally, aesthetically, and, in many respects, sociologically. “Broken youth stumbling into the home of broken age,” wrote Frank Rose in the Village Voice.

    But with crisis comes opportunity, particularly for those who can afford to be opportunistic. Specifically, in the book by Paul Harvey entitled The Brief History of Neoliberalism, the crossroads of NYC’s late-70’s fiscal crisis gets center stage. Here, the groundwork for the city’s co-optation had been laid for some time, with the 1960’s urban crisis increasing municipal desperation. Financial institutions smelled blood, and they saw occasion. What happened dictates urban redevelopment to this day. Writes Harvey (h/t Cleveland Frowns):

    At first financial institutions were prepared to bridge the gap, but in 1975 a powerful cabal of investment bankers (led by Walter Wriston of Citibank) refused to roll over the debt and pushed the city into technical bankruptcy. The bail-out that followed entailed the construction of new institutions that took over the management of the city budget.

    Harvey states that the new budget strategy amounted to “a coup by the financial institutions against the democratically elected government”, one that would subsequently de-emphasize social and physical infrastructure for the priority of a “good business climate”. Harvey continues:

    But the New York investment bankers did not walk away from the city. They seized the opportunity to restructure it in ways that suited their agenda…This meant using public resources to build appropriate infrastructures for business…coupled with subsidies and tax incentives for capitalist enterprises…[T]he investment bankers reconstructed the city economy around financial activities, ancillary services such as legal services and the media…and diversified consumerism (with gentrification and neighborhood ‘restoration’ playing a prominent and profitable role). City government was more and more construed as entrepreneurial rather than a social democratic or even managerial entity.

    Fast forward to now and you can see how this framework has made modern day New York. A billionaire mayor. Impressive wealth accumulation. Lower crime. Gentrifying areas that are spreading into many parts of the city. The scene in the Bronx:

    The South Bronx is on the upswing and this new project proves it,” said Kathy Zamechansky, President of KZA Realty Group. “A gleaming new building is just what this area needs to add life and vitality to a neighborhood…

    All good, right?

    Not exactly. Commoditizing public welfare has come with very personal costs. Particularly, New York City’s economic sphere epitomizes the worsening two-tier system in America, with one study finding that “three of the four most [income] segregated metropolitan areas [in the country] are in the New York City region”. In the city itself, the income disparity rates from subway stop to subway stop are at Namibian levels. “Get off at Chambers St., and you’re averaging $205,192,” writes Fishbowl NY. “Hop off at Kingsbridge Rd., and you’re at $18,610”.

    Income Disparity New York

    There is cost to personal freedom as well, with Mayor Bloomberg’s “stop-and-frisk” tactics ruled as a violation to the constitutional rights of minorities. The increase in police stops have been significant since Bloomberg took office, going from 160,851 in 2003 to 685,724 in 2011. In a 195-page response just released, the federal judge wrote: “No one should live in fear of being stopped whenever he leaves his home to go about the activities of daily life”.

    Heck, there’s even consternation from the city’s creative types. Specifically, New York’s legacy of nurturing the next generation of thought is being homogenized by the fact that elites talking to elites creates for shitty cultural capital. Writes Gawker’s Hamiliton Nolan on how the influx of money is turning the city into “a game of urban Candy Crush”, “Everything is an orgy of destruction! Who’s hip now? Nobody!” Echoes creative class troubadour Lena Dunham:

    It’s news to no one that the middle class and up-and-coming talent struggle in this city. As a result, New York is seeing an exodus of its creative population. As Dunham says, “If they struggle for too long, they’re leaving New York for Seattle, Chicago, Austin, and in some cases, even Tampa. We can’t have our generation’s Patti Smith moving to Tampa. That’s going to seriously f*ck our shit up.

    But the bridge had been crossed. Not simply for the reasons Dunham fingers, but because New York City is the head of a teetering set of bones. Writes eminent economic scholar Joseph Stiglitz in a recent essay entitled “The Wrong Lesson from Detroit’s Bankruptcy”:

    Rather than deal purposefully with this changing economic landscape with useful policies encouraging the growth of other industries, our government spent decades papering over the growing weaknesses by allowing the financial sector to run amok, creating “growth” based on bubbles. We didn’t just let the market run its course. We made an active choice to embrace short-term profits and large-scale inefficiency.

    America does have an urban renewal program, but it is aimed more at restoring buildings and gentrification than at maintaining and restoring communities, and even at that, it is languishing.

    Which brings us back to Detroit. Consider it America’s “Back to the Future” moment. There is municipal bankruptcy. There is fiscal management being taken away from an elected government. There are financial institutions wreaking havoc on the middle class via a collective Alfred E. Neuman-like exasperation. There is the subsidy environment going full bore in the midst of economic trauma, with the Governor of Michigan giving the okay to Detroit billionaire Mitch Ilitch on his $650 million dollar publicly-subsidized hockey arena one day after signing off on the country’s largest city bankruptcy filing. And then there’s the gentrification-as-economic-development silver bullet, with real estate developer Dan Gilbert buying up downtown properties for the price of a song and then using the spatial grease of placemaking to fill his square feet with the rise of the creative class. “Stand up and gentrify: 7 days in Detroit” reads a series running in the The Windsor Star.


    “It was a face that didn’t have a care in the world, except mischief.” Quote from Mad editor Harvey Kurtzman.

    Taken together, the framework of Detroit’s progression is to simply go forth into who we are as a country—a group of people on a collision course with the inevitable failings of economic disparity, or more generally: a nation without good jobs.

    Should Detroiters be worried?

    Maybe. Reads the New York Observer: “Bloomberg Warns the Next Mayor Could Follow Detroit Into Bankruptcy”.

    Back to the future indeed.

    Richey Piiparinen is a writer and policy researcher based in Cleveland. He is co-editor of Rust Belt Chic: The Cleveland Anthology. Read more from him at his blog and at Rust Belt Chic.

    Lead photo courtesy of Vice.