Creative Class

On Tuesday, The Daily Beast ran my new Housing-Mortgage Stress Index. While the U.S. housing market saw a sharp drop in July and millions of homeowners remain underwater, housing market troubles vary significantly by metro region.

The Housing-Mortgage Stress Index shows the U.S. metros whose housing markets — and homeowners — face the highest levels of stress and danger of foreclosure and falling prices. The index, developed with my collaborator Charlotta Mellander, is based on three variables:

• Negative equity — percent of mortgages where owners owe more than their homes are worth.
• Loan-to-value ratio — total Mortgage Debt Outstanding divided by Total Property Value — both from Core Logic.
• Monthly mortgage cost-to-income ratio from the U.S. Census American Community Survey.

The index weights all three variables equally and covers 142 U.S. metros.

The first map above, prepared by Zara Matheson of the Martin Prosperity Institute based on data from Core Logic, shows the percentages of mortgages that are underwater across U.S. metros. Las Vegas tops the list with nearly three-quarters of all mortgages underwater. More than half of all mortgages are underwater in Stockton, Modesto, Vallejo-Fairfield, Bakersfield, and Riverside, California; Port St. Lucie, Orlando, Cape Coral, and Fort Lauderdale, Florida; Phoenix, and Reno. In Miami, Tampa, and Detroit, more than 45 percent of all mortgages are underwater.

The second map shows the performance of U.S. metros on the overall Housing-Mortgage Stress Index. The most troubled metros are located primarily in California, Florida, and Nevada. Nine of the top 20 troubled metros – including all five of the top five – are located in California (Stockton, Modesto, Vallejo-Fairfield, Riverside-San Bernardino-Ontario, Bakersfield-Delano, along with Fresno, Visalia-Porterville, Sacramento, and Salinas). The six Florida metros on the list are Miami, Orlando, Port St. Lucie, Deltona-Daytona Beach-Ormond Beach, Lakeland-Winter Haven, and Palm Bay-Melbourne. Rounding out the top 20 metros are Las Vegas and Reno, Nevada; Phoenix; Provo, Utah; and Greely, Colorado.

Among large metros — those with more than 1 million people — Tampa, Detroit, Atlanta, San Diego, Jacksonville, Washington, D.C., Virginia Beach, Chicago, and L.A. show high levels of housing-mortgage stress, along with the five noted above — Riverside, Las Vegas, Orlando, Phoenix, Sacramento, and Miami.

There is still a great deal of localized stress in the U.S. housing market, and recovery is likely to take a lot longer than most people anticipate.

On Sunday, August 29, Richard Florida was interviewed on CNN’s Fareed Zakaria GPS. They discussed The Great Reset and how cities will change as Americans adapt to a world after the recession. Click the image below to watch the interview.

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Last Friday, my list of America’s Brainiest Cities ran over at The Daily Beast. Boulder topped the list, which comprised a mix of larger knowledge-intensive metros like Washington, D.C., Boston, Silicon Valley, San Francisco, Austin, and Seattle, and college towns like Ithaca, Charlottesville, Madison, Iowa City, and Durham, North Carolina, among others.

The map above, prepared by Zara Matheson of the Martin Prosperity Institute, shows the performance of all U.S. metros on our Brainiest Metros Index developed with my colleague Charlotta Mellander. The index is based on three variables:

• The share of adults 25 years of age and older with a PhD, master’s, or professional degree (from the U.S. Census American Community Survey).
• Computer scientists and mathematicians as a share of all employment.
• Scientists (physical, biological, social) as a share of total metro employment (both from Bureau of Labor Statistics).

The Index weights all three variables equally and covers 339 U.S. metro regions.

Now let’s look quickly at how U.S. metros perform on these three key factors that make up the overall index.

The first chart above maps U.S. metros on the first variable – the share of adults with a PhD, master’s, or professional degree. The blue shaded areas show regions that score highly on this variable. Washington, D.C. is the clear leader among larger metros (those with more than one million people). Greater Boston and the San Francisco Bay area also have considerable concentrations. But the highest-scoring metros are all college towns that are home to large research-intensive universities – Ithaca (Cornell), Boulder (University of Colorado), Corvallis (Oregon State), Charlottesville (University of Virginia), State College (Penn State), Iowa State (University of Iowa), Lawrence (University of Kansas), and Gainesville (University of Florida).

The second map shows U.S. metros on the second variable – computer scientists and mathematicians as a share of total metro employment. California’s Silicon Valley-San Jose rates highly, along with Durham in North Carolina’s Research Triangle, Washington, D.C., Boulder, Boston, Austin, Seattle, and several others.

The third map traces U.S. metros on the third variable – scientists as a share of all metro employment. The high-ranking metros here are almost all significant university towns.

But to what extent is metro “braininess” associated with better rates of economic performance? Human capital is a key driver of economic performance, according to a wide range of economic studies. And the Brainiest Metros Index reflects a small but high-powered subset of human capital. To get at this, we ran a series of correlation analyses and scattergraphs comparing the Brainiest Metro Index to measures of regional economic output, income, and wages; innovation and high-tech industry; housing prices; job and class structures; and even metropolitan happiness and well being. These are preliminary, exploratory analyses that simply point to associations between variables. We don’t make any claims here about the direction of causality, and we acknowledge that intervening variables may come into play.

Brainier metros have better economic outcomes, being closely associated with economic output measured as gross regional product per capita (with a correlation of. 556), regional income (.563), and regional wages (.646). Metro braininess also goes along with higher housing prices, whether measured by the Case-Shiller Index (.449 ) or by Census data on housing values (.358).

Brainier metros also have higher levels of innovation, measured as patents (.571), and have higher levels of high-tech industry (.698).

Brainier metros also reflect broader regional occupational and class structures. They are positively associated with the creative class (.77) and negatively associated with the working class (-.53).

And brainier metros tend to have happier populations. The correlation between the Brainiest Metros Index and Gallup’s measure of metropolitan happiness and well-being is.566.

This poses significant implications for economic development policy, which I pointed out at The Daily Beast:

Though luring new factories and building new stadiums lend themselves to outsize media attention and ostentatious ribbon-cutting ceremonies, the less glamorous work of building up local knowledge assets and leveraging existing university campuses yields far greater and lasting economic gains. Unlike incentive packages and new stadiums, which, despite their price tags of hundreds of millions of dollars, too often turn out to provide benefits that are scant or fleeting, knowledge assets like research universities can’t move; they are rooted in the local economy. These brainy metros not only demonstrate a better approach to stimulating state and local economic development, they are helping to rebuild the US economy as a whole.

A new report from our Martin Prosperity Institute team charts the geography of class in Toronto. The map below shows the deep underlying economic – class - divisions of the city and can also help us understand the current polarized mayor’s race.

The map shows the concentration of three broad classes of work across the city’s census tracts. The kind of work people do is the hallmark of social-economic class and the map shows a city where the dominant classes occupy, literally, two different social, economic, and geographic spaces. This segmented pattern mirrors the same trend identified by earlier research on the worsening residential segmentation of the city highlighted by my University of Toronto colleague David Hulchanski.

Higher-paying, higher-skill creative class jobs – in fields spanning science and technology; business and management; arts, culture, and entertainment; health care and education – are concentrated in a T-shape pattern radiating out of the downtown core of the city. Lower-skill, lower-wage jobs surround the creative class T and are concentrated in more outlying areas. Toronto’s geography reflects a city that has become almost completely post-industrial: There are very, very few districts left in the city where working class jobs are the dominant concentration. But where those jobs are can help us understand the mayor’s race and Toronto’s increasingly class-polarized politics.

The two leading candidates come from completely different economic and geographic worlds. The only working class concentrations in the upper left-hand quadrant of the map are in or very close to Rob Ford’s city council riding. Prior to running for mayor, George Smitherman represented the Toronto Centre Provincial riding, an area that is at the virtual apex of the creative class zone.

Toronto needs to come to grips with its growing class divide, and to develop strategies that can begin to address it if it wants to retain the tolerance, social cohesion, and commitments to social justice which have so long been its hallmarks.

In my last post, I mapped the projected growth in service jobs across America’s metro regions. Today, I look at a subset of those higher-paying, higher-skill jobs for knowledge, professional, and creative workers that make up the creative class. More than 35 million people are currently employed in creative class work in fields like science, technology, and engineering; business, finance, and management; law, health care, and education; and arts, culture, media, and entertainment. The creative class makes up roughly a third of total employment and accounts for more than half of all wages and salaries in America. Creative class employment has seen relatively low rates of unemployment during the course of the economic crisis. Creative class jobs will make up roughly half of all projected U.S. employment growth – adding 6.8 million new jobs by 2018.

The map (above) plots the projected creative class job growth across U.S. metros. The biggest gainers are, by definition, the biggest regions. Greater New York tops the list with a projected gain of 250,000+ jobs, followed by Los Angeles (184,241), Greater Washington, D.C. (143,227), Chicago (139,577), Atlanta (106,148), Boston (103,120), Dallas (98,373), Philadelphia (92,187), Minneapolis-St. Paul (89,188), and Houston (88,024).

But job growth is a function of population size; it’s expected that large regions will dominate the list of the biggest job generators. So, the next map plots the projected percentage change in creative class jobs for U.S. metros. Gainesville, FL – home to the University of Florida – is the biggest projected gainer, with a projected 17.7 percent increase in creative class jobs, followed by Richmond, VA (17.5 percent), Greater Washington, D.C. (17.4 percent), Morgantown, WV (17.01 percent), Punta Gorda, FL (16.9 percent), Sioux Falls, SD (16.7 percent), Ocala, FL (16.5 percent), Columbia, MO (16.4 percent), and Durham, NC (16.4 percent). The only large metro to make the list is Greater Washington, D.C., and college towns stand out, as well as a couple of smaller Florida communities where jobs are growing off of a small existing base.

The good news is that creative class jobs will continue to grow and provide high-wage, high-skill employment for a large and significant share of the American workforce. It’s important to recognize that not all of these jobs require college degrees. Though nearly three-quarters (72 percent) of college graduates go on to do this kind of work, four in 10 creative class workers do not hold college degrees, according to analysis by my colleagues at the University of Toronto’s Martin Prosperity Institute. The bad news is that creative class jobs will be geographically concentrated. That, combined with the decline of blue-collar jobs and the bifurcation of the workforce into high-pay, creative class jobs and much lower-pay service class jobs, will contribute to mounting economic, social, and geographic inequality. As a nation, we have to increase the number of creative class jobs, but we also need to do much, much more to improve service work as I noted in my previous post.

At bottom, a jobs strategy needs to start from a fundamental principle: That each and every human being is  creative and that we can only grow, develop, and prosper by harnessing the full creativity of each of us. For the first time in history, future economic development requires further human development. This means develop a strategy to nurture creativity across the board – on the farm, in the factory, and in offices, shops, non-profits, and a full gamut of service class work, as well as within the creative class. Our future depends on it.

The Philips Livable Cities Award is now accepting entries!

This award is a global initiative designed to encourage individuals, businesses, and community and non-governmental groups to develop practical, achievable ideas for improving the health and well-being of people living in cities – ideas which can then be translated into reality.

The award is being overseen by a supervisory panel of independent experts in three award categories: Well-Being Outdoors; Independent Living; and Healthy Lifestyle at Work and Home. The overall winning idea from any of these three categories and an idea from each of the two remaining categories will receive grants.

Submission deadline is October 28, 2010. Further information on the award criteria and categories plus an entry form can be found here.

Philips have also established a new featured group on LinkedIn – called “Creating Healthy, Livable Cities” – to facilitate an issues-driven discussion among people interested in making cities more healthy and livable places. Join the discussion here.

Arnold Kling is all over it:

Old consensus: we need Freddie and Fannie in order to make housing “affordable.”

New consensus: we need them in order to “prevent further house price declines,” in other words, to make housing less affordable …

Government interference in housing markets, which helped produce the disorder known as the financial crisis, is still producing disorder…

The effort to prop up home prices does the following:

1. Diverts capital from other uses.

2. Uses up taxpayer money that could be spent on other things.

3. Increases the wealth of people who find suckers to buy their houses at too-high prices.

4. Decreases the wealth of the suckers who buy now.

5. Decreases the liquidity and mobility of people who cannot find rational buyers for their houses because rational buyers do not buy into a rigged market.

6. Decreases the investment opportunities for rational buyers, who are unable to buy homes in an un-rigged market.

The old government-backed system had a rationale of sorts in the old industrial order, providing a “geographic Keynesianism” which spurred consumption of durable goods coming off of U.S. assembly lines – everything from cars to refrigerators, washer-dryers, air-conditioners, and TVs. But little of that is produced in the U.S. anymore – it’s now a subsidy to offshore manufacturers. And the economy is far less manufacturing-intensive and far more knowledge-driven. These newer economic structures come along with much greater labor market flexibility and mobility, and conventional housing policy is thus at odds with Kling’s point #5. It’s time to put this bad policy to bed. But, we’re faced with an Olsonian political bind where there is not enough political clout to counter the housing and related lobby. And as Olson long ago pointed out, it’s just these kinds of political constraints that put nations and regions on the road to economic decline. Are counter-forces sufficient to overcome them? That seems to be the real question.

The past week or so, I’ve been tracking where new jobs will be created in America. Today, I look at the sector of the economy that accounts for the largest share of all jobs – the service class. More than 60 million American workers do this kind of low-skill, low-wage, routine service work, making up 45 percent of the work force. These service class jobs are projected to make up more than roughly half of all projected new jobs out to 2018 – 7.1 million new jobs, including 835,000 projected new home health and personal care aides, 400,000 new customer service positions, 400,000 new food preparation workers, and 375,000 new retail sales clerks.

The map above plots the growth in service class jobs across U.S. metros. The biggest gainers are the biggest regions. Greater New York again tops the list with more than 285,000 projected new service class jobs, followed by Los Angeles (192,364), Chicago (174,704), Houston (111,727), Atlanta (106,132), Greater Washington, D.C. (96,857), Philadelphia (96,133), Phoenix (94,189), Minneapolis (85,694), and Dallas (85,521).

But job growth is a function of population size; it’s expected that large regions will dominate the list of the biggest job generators. So, the next map plots the projected percentage change in service class jobs for U.S. metros. Two Texas metros – Brownsville (11.8 percent) and McAllen (11.6 percent) – top this list, followed by Rochester, MN (11.5 percent), Duluth, MN (11.4 percent), Alexandria, LA (11.3 percent), Vineland, NJ (11.1 percent), Greenville, NC (11 percent), Hickory, NC (11 percent), Waterbury, CT (11 percent), and Atlantic City, NJ (11 percent).

The next map shows the regions with the largest projected share of their work force doing service class work out to 2018. The largest share of service class work is, not surprisingly, in resort towns and tourist destinations where nearly two-thirds of the work force is projected to be employed in service class work: Ocean City, MD (63.9 percent), Atlantic City, NJ (63.4 percent), Myrtle Beach, SC (62.8 percent), West Palm Beach, FL (59.8 percent), Bradenton, FL (59.6 percent), and Punta Gorda, FL (59.4 percent).

Service class jobs compose the biggest share of all jobs, and are projected to grow considerably in the future. We can no longer be content to see service class jobs as low-skill, low-paid work. A serious job creation strategy must see service class jobs as a key to providing better, more engaging, higher-wage employment. Americans need to remember that manufacturing jobs were not always good jobs. A century ago, they were dirty, dangerous, low-wage jobs. Business strategies to improve productivity, the labor movement, public policies that enabled workers to form unions and to bargain collectively, and the post-Depression, post WWII social compact between capital and labor made them good jobs.

That is the key task of a jobs strategy today – we have to make service class jobs good jobs. The way to do that is to begin to improve the quality of those jobs and to see service class workers as sources of innovation, continuous improvement, and productivity gains. Service class jobs are the last frontier of real inefficiency in the economy. Already, companies like The Container Store, Whole Foods, Best Buy, The Four Seasons, and Starbucks are developing new and better strategies to engage their workers, improve pay, and promote from within. These efforts are in their infancy and much more can be done to extend them.

The Obama administration should convene a national service jobs summit, calling together industry executives, unions and workers’ organizations, and leading experts to define a strategy for upgrading service class jobs. It also means Americans will have to consider paying more for services. Henry Ford instituted his famous $5 day to enable his workers to buy cars. As a nation, we increased blue-collar pay and we – all of us – paid more for cars, appliances, and durable goods coming off the assembly line. In return, large parts of our work force were able to make enough to enjoy a decent middle-class life. What is more important to you, what would you really rather pay more for – a new car or the people who take care of your children or your ailing parents, or even the people who prepare the food you feed your family? Improving service jobs means spreading the costs of higher pay across our economy and all of us as consumers.

In my next post, I turn to the other big area of job growth in the U.S. economy – the projected growth of higher-skill, knowledge-based, creative class jobs.

My new paper on Canada’s creative class, done in collaboration with my MPI colleagues Kevin Stolarick and Charlotta Mellander, is out. It’s titled “Talent, Technology and Tolerance in Canadian Regional Development” and is published in the latest issue of the Canadian Geographer.

Here’s the abstract:

This article examines the factors that shape economic development in Canadian regions. It employs path analysis and structural equation models to isolate the effects of technology, human capital and/or the creative class, universities, the diversity of service industries and openness to immigrants, minorities and gay and lesbian populations on regional income. It also examines the effects of several broad occupations groups—business and finance, management, science, arts and culture, education and health care—on regional income. The findings indicate that both human capital and the creative class have a direct effect on regional income. Openness and tolerance also have a significant effect on regional development in Canada. Openness towards the gay and lesbian population has a direct effect on both human capital and the creative class, while tolerance towards immigrants and visible minorities is directly associated with higher regional incomes. The university has a relatively weak effect on regional incomes and on technology as well. Management, business and finance and science occupations have a sizeable effect on regional income; arts and culture occupations have a significant effect on technology; health and education occupations have no effect on regional income.

The full paper is here.

The United States has seen a steady erosion of blue-collar work over the past several decades. We define blue-collar, working class jobs as those which primarily make use of physical skill or manual labor. These occupations include not only factory work or production occupations, but jobs in construction, materials moving, transportation, installation, and repair. Blue-collar, working class jobs currently account for 23 percent of all U.S. employment. Blue-collar occupations and the regions that specialize in this kind of work have seen the highest levels of unemployment and the greatest vulnerability to the economic crisis. The decline of high-paying, blue-collar jobs for lower-skilled workers has caused considerable concern that the U.S. is losing an important source of good, family-supporting jobs, and that the American labor market is becoming more uneven and increasingly split between higher-paying knowledge work and lower-paying routine service work. But what will the geography of blue-collar work look like in the future?

The map above shows the metros with the biggest projected gains in blue-collar work. Not surprisingly, the biggest metros top this list. The biggest gainer is Greater New York which is projected to gain 41,084 working-class jobs followed by Houston (32,249), Chicago (30,482), Los Angeles (28,811), Phoenix (23,957), Atlanta (22,754), Washington, D.C. (21,387), Dallas (19,315), Riverside (16,755), and Las Vegas (14,781).

But job growth is a function of population size; it’s expected that large regions will dominate the list of the biggest job generators. So, the next map plots the projected percentage change in working-class jobs for U.S. metros. The regions with the largest projected working class increases are all in the Sun Belt: Pascagoula, MS (8.2 percent), Naples, FL (8.1 percent), Punta Gorda, FL (7.9 percent), Santa Fe, NM (7.4 percent), Cape Coral, FL (7.4 percent), Farmington, NM (7.4 percent), Jacksonville, NC (7.2 percent), Las Vegas ( 7.1 percent), Grand Junction, CO (7 percent), and St. George, UT (7 percent). The places with the slowest projected growth are mainly traditional manufacturing metros such as Elkhart (.2 percent) and Columbus, IN (1.06 percent), Muskegon, MI (1.16 percent), Oshkosh, WI (1.41 percent), Hickory, NC (.68 percent), and Dalton, GA (.46 percent), among others.

The next map shows the regions that are projected to have the highest share of their workforce doing blue-collar work out to 2018. Elkhart, IN, tops the list with nearly half (48.5 percent) of its workforce in blue-collar jobs – though that is down from 51.3 percent in 2008. It is followed by Dalton, GA (45.9 percent), Morristown, TN (40.9 percent), Houma, LA (40 percent), Decatur, AL (37.6 percent), Fort Smith, AR (36.5 percent), Hickory, NC (35.8 percent), Odessa, TX (35.4 percent), Gainesville, GA (35.3 percent), and Sheboygan, WI (34.3 percent).

The good news is that the U.S. will continue to create relatively high-paying working class jobs. These jobs will continue to provide good livelihoods for the workers fortunate enough to have them. The bad news is that their rate of growth will be sluggish and not nearly enough to provide the amount of good, family-supporting jobs required to undergird a middle class of lower-skilled workers. The harsh reality is that blue-collar, working class jobs in the U.S. are increasing slowly, and they will grow the slowest in traditional manufacturing and industrial regions and communities whose economic and social life has revolved around these jobs. There is little policy-makers can do – aside from declaring a trade war – to bring back large numbers of these high-paying jobs. But they can develop strategies to improve not just the wages but the content of blue-collar work, by engaging workers more fully and seeing them as a source of innovation. And they can help to infuse more creativity and design into manufacturing products, helping to broaden their market and counteract the trend toward declining prices. And policy-makers will have to develop strategies for improving wages and the content of work in other faster-growing segments of the economy, a point I will get to in my next post, which will cover the projected growth of service jobs.

Last Friday, my list of the 20 metros with the fastest-growing jobs was posted over at The Daily Beast. Jobs are the second-biggest issue facing the United States – second only to the economy, according to a recent Gallup poll – and a pending referendum on the Obama administration in the upcoming mid-term elections. As I noted:

The United States has lost an estimated 7.4 million jobs since the onset of the economic crisis. But, the economy is on track to create some 15.3 million new jobs looking out to 2018, according to projections done by the Bureau of Labor Statistics (BLS). And more than 50 million total jobs will come open, as older workers retire and many switch jobs and careers. Total U.S. employment is projected to grow by 10.1 percent over the period, according to the BLS forecast, considerably better than the 7.4 percent growth rate for previous decade (1998-2008), and roughly in line with population growth of 10.7 percent.

But where will the new jobs be located? Which places will grow the most jobs and, conversely, which will see the biggest job losses?

To get at this, my Martin Prosperity Institute (MPI) team applied the detailed employment projections of the BLS to U.S. metro regions. The BLS forecasts job trends across 22 major occupational groups which include more than 822 specific job categories for the decade 2008 through 2018. My MPI team used these BLS national forecasts to generate similar estimates for each of America’s 392 metro regions. Essentially, we used the BLS overall estimations to predict job growth in each region based on its current mix of jobs.

Over the next couple of weeks, I’ll be posting the results of our analysis here. I’ll get us started today with a series of maps and analyses of the metros that stand to gain the most jobs overall.

The map above shows the metros with the biggest projected gains in total employment out to 2018. New York is projected to add 578,974 jobs, the most in the country. It is followed by Los Angeles (405,392), Chicago (344,740), Washington, D.C. (261,465), Atlanta (235,036), Houston (232,001), Philadelphia (202,970), Dallas (203,202), Phoenix (191,210), and Boston (186,457).

But job growth is a function of population size; it’s expected that large regions will dominate the list of the biggest job generators. So, the next map (below) plots the projected percentage change in overall employment for U.S. metros.

Rochester, Minnesota, is the biggest percentage gainer, with projected job growth of 12-plus percent. The major hub cities of the Bos-Wash corridor do well with Greater Washington in second place, Greater New York in 15th, and Boston 19th. The D.C. suburb of Bethesda and Trenton-Ewing – a suburb of both New York and Philadelphia – also number among the top 10. College towns like Charlottesville, VA, Gainesville, FL, Ithaca, NY, Boulder, CO, and Corvallis, OR, which have performed well over the course of the economic crisis, number among the nation’s top 20 projected job gainers.

The biggest projected job losers are mainly older manufacturing communities. Elkhart, Indiana, a region which currently ranks near the top of this list in terms of unemployment, also ranks last in terms of projected job gains, adding just 6,639 total jobs – a 5.4 percent gain. Next is Dalton, GA (5.6 percent), Morristown, TN (7 percent), Visalia, CA (7.3 percent), Columbus, IN (7.7 percent), Decatur, GA (7.7 percent), Cleveland, TN (7.8 percent), Hickory, NC (7.8 percent), Holland, MI (7.8 percent), and Gainesville, GA (7.9 percent).

But what accounts for this growth? We ran correlations for key economic, social, and demographic variables and the percentage change in employment from 2008 and 2018. These are preliminary, exploratory analyses that simply point to associations between variables. We don’t make any claims here about the direction of causality, and we acknowledge that intervening variables may come into play. Several key factors emerge as driving forces in the regional jobs equation.

Size matters, but only to a very slight degree. Population is only very slightly correlated with percentage change in employment (.17).

Characteristics of the labor force and of metro economies matter much more. Human capital is very closely associated with percentage change in metro level employment (.56). The scattergraph above plots the association.

The nature of the economy is also closely associated with metro job growth. The percentage change in metro employment is closely associated with the percentage of the workforce in the creative class (.64).

But it is even more strongly associated with the share of the labor force in blue-collar, working class jobs, where the correlation is high and negative (-.84).

This suggests that the structural forces that are reshaping the U.S. economy from an industrial to a more idea, knowledge, and human capital driven post-industrial economic system will continue to deepen. Left unchecked, these forces will continue to divide the U.S. economy and U.S. society by skill-level, occupation, and economic class – the kind of work people do. And this rising economic divide of work and class will also continue to be reflected in and overlaid by a deepening geographic divide, as the geography of class compounds economic and social inequality. Public policy then will have to focus not just on generating jobs but on improving the content of many of those jobs, especially in the service class, increasing innovation and productivity, more fully utilizing and engaging workers’ capabilities and talents, and improving wages.

My next post will look at the projections for blue-collar factory work. Future posts will cover projections for the growth of lower-skill, lower-pay service work and the projected increase in higher-wage knowledge and creative work.

So, what are America’s busiest airports? Depends on what you measure, it turns out. The U.S. Department of Transportation’s Bureau of Transportation Statistics compiles detailed statistics on America’s airports (via the NYT’s Catherine Rampell).

For domestic flights, Atlanta is the busiest airport, followed by Chicago O’Hare, Dallas-Fort Worth, Denver, and LAX.

Miami takes the top spot for international flights, followed by JFK, Newark, Atlanta, and Houston.

What’s your favorite – and least favorite – airport?

After a long drive up to the shores of Lake Michigan, I opened my laptop to check up on a day or so of lost e-mail, and in my in-box were a slew of messages reporting on the passing of Chris Freeman. It’s apt that I sit here writing this feeling the cool breezes off the gorgeous clear blue lake on this magnificent August day thinking back on his work and life.

Chris Freeman was one of the greatest thinkers and scholars of innovation and the dynamics of the capitalist economy. Born in 1921, the same year as my own father, Freeman not only studied capitalist innovation and dynamics, he lived them. As a young boy, he watched the world lapse into depression, he watched England be eclipsed as an economic power, and he watched the tremendous power of innovation propel post-war growth and prosperity. He saw the rise of the corporate R&D lab and the bureaucratization of innovation that Schumpeter had written about, and then he saw the surge in entrepreneurial venture capital financed innovation in the late 20th century. He witnessed firsthand the bursting forward of innovation in great bunches and bundles, pushing capitalism forward and changing its stripes as it did so. But he was never, ever a technological determinist. Throughout his work, he called attention to the complex and nuanced interplay between technology and organization in shaping both economy and society.

His impact on me was huge, not just as a thinker but as a person and a role model. He wasn’t just a scholar, he was an institution-builder and the institution he built – the Science Policy Research Unit or SPRU – helped define the field of innovation studies. He was also a key force behind the journal Research Policy, which published so many key articles and essays that shaped this field.

Freeman had a most profound influence on my work. I pulled his books off my library shelves just this past year – his work on long waves, the bundling of innovation, and the role of innovation and capitalist crises – as I was working on my latest book. He wrote articles and books packed with data and insight but always in clear, concise language. I’ve tried my best to follow a bit in his footsteps – to stand as much as I can on the shoulders of this great intellectual giant.

There is so much more I could say about his work and his influence, but right now I am remembering the first time we met. It was 20 or 25 years ago at a specialized academic conference on innovation. He was a distinguished senior scholar, and me a very junior, very beginning assistant professor. I was very nervous to approach someone whose work I had read and who was something of an idol to me – and to so many of us at the time. But I made my way over and introduced myself and tried to say something that might connect. What came out, rather awkwardly, was this: “So what, Professor Freeman, what was it exactly, that drew you to the work of Joseph Schumpeter?”

Perhaps reading my body language or understanding my own influences and thought processes better than I did myself, he smiled kindly and replied straightforwardly, “I’ve always been fond of Schumpeter, but when it comes right down to it, I was really into Marx. But in those years it was taboo to talk about Marx, so I started writing about Schumpeter and the rest is history.”

I was blown away by his honesty and candor – how he captured in that one short remark the nature of the academic enterprise, so to speak. It was one of the most important sources of advice and inspiration I would ever receive, and on so many levels. His words have stayed right at the front of my mind to be retrieved whenever needed for all those intervening years.

He will be missed but his work and influence live on.

That’s the overwhelming conclusion of a new Gallup-Healthways survey based on telephone interviews with 173,581 employed Americans over the past year.

The first chart shows the toll that commuting takes on physical health. Americans with longer commutes suffer higher levels of back pain, higher cholesterol, and higher levels of obesity.

The second chart shows the toll of commuting on emotional health and happiness. Those who commute more worry more, experience less enjoyment, and feel less well-rested.

Commuting is a health and psychological hazard, not to mention the carnage and wasted time on our over-clogged roads. It’s time to put commuting right beside smoking and obesity on the list of priorities for improving the health and well-being of Americans.

This chart from Gallup shows the dramatic growth in the percentage of Americans who want to see smoking banned in public venues.

Over at The Transport Politic, Yonah Freemark accuses me of making too much of a case for high-speed rail:

Setting aside the positives and negatives of fast trains for now, my biggest qualm with Florida’s argument is his sense that the megaregion will produce the “Concentration and clustering [that] are the underlying motor forces of real economic development.” He cites the Boston-Washington and Char-lanta regions as examples of these megaregions, which he says “Will do more than anything to wean us from our dependency on cars…”

Though there was been an increase in the number of residents living in the dense cities along the corridor (those that Florida implies need to be reinforced to meet the demands of the next century), that expansion is minor compared to the increase in the number of residents living in not-so-dense areas. It is true that the interconnections between cities in the Northeast have led to strong intercity rail ridership compared to the rest of the country, but the true success, especially of the New York metropolitan area, has been in maintaining urban and commuter rail ridership, which represents a far larger quantity of users and which has nothing at all to do with the presence of the greater Boston-Washington megaregion. The megaregion in itself, in other words, cannot be directly correlated with the notions of higher density…

Without a comprehensive change in the way the entire transportation apparatus is funded in the U.S., high-speed rail will result in few of the “spatial fixes” Florida highlights as his future goal. Indeed, there is no immediate connection between intercity rail use and giving up private cars; I have argued before that fast trains do not automatically mean an increase in public transportation use to and from stations, in the same way as different airports have different percentages of commuters using cars to get to them depending on the travel offerings available.

While there will be increasing dense development around stops, the fact of the matter is that fast train systems by definition have few stations, certainly not enough to encourage the brunt of overall nationwide development, even if implemented at a vast scale. That’s because, unlike the auto and single-family home model of the previous century, high-speed rail assumes dense, walkable development that falls off after a mile at most. One high-speed rail line cannot produce the same amount of geographic development as one highway.

Yet most problematic about Florida’s argument is his inability to identify improved fixed-route urban transit as the more efficient promoter of the anti-sprawl. While they are not as sexy as fast trains, rapid transit in the form of buses, subways, and light rail more directly allows for the creation of dense urban zones that do challenge the hegemony of the automobile and single-family home. If Florida’s intention were to do the most with a limited amount of funds to increase the number of livable, walkable neighborhoods, for instance, he would do best by encouraging the construction of these inner-city lines, combined with a focus on dense construction around their stations. From that perspective, high-speed rail is of secondary importance.

I’m in general agreement with the main thrust of Freemark’s argument. The point I am making about mega-regions today and spatial fixes is that to work they must simultaneously expand and intensify the use of space. Mega-regions and high-speed rail help bring about the expanded development corridor. Freemark is right, though we need much more and much better inner-city and intra-metro transit in the firm of, as he says, buses, subways, and light rail to create denser urban and suburban zones that intensify our use of space. And I would add more flexible living and working arrangements so folks can live closer to where they work, and walk and bike more. All of these changes go together to produce a new spatial fix which can undergird prosperity and lead to a better, more sustainable way of life.

Update: Had a nice e-mail back and forth earlier with Freemark. Robert Cruickshank weighs in here.

Jennifer Edwards is one of many, many Americans selling their homes and trading them in for a new, more flexible, experiential life as renters.

Today, at 2 PM, I will sell my 2-bedroom Condo in Park Slope Brooklyn. This is not a new experience. I bought and sold real estate in New York City throughout the mid 1990s and 2000s, in order to put myself through graduate school, pay for my son’s private school education, and monetarily supplement my artist / college professor earnings …

I’m primed to channel my creative skills elsewhere as it seems I am perhaps [again] ahead of the trend. Two recent studies indicate that we find happiness not by owning [things] but by doing [things] …

Apply this to the ideas of ownership vs. experience and you have either a recipe for disaster or the tools to take back control of your life where you can. Changing your boss may be hard. Choosing not to take on car payments, credit card debt and mortgages, or at least minimize them, is easier.

Today, I survey my home, a rented apartment in the East Village, and thank my landlord. As I remember 14 years of ownership experiences: properties sprouting leaks, broken sewage pipes, unruly coop boards, building-wide lawsuits, and assessments. All I have to do now is pay my rent and my landlord takes on all of the headaches, the mortgage, and the maintenance of my living space. By this evening, there will be money in the bank and I will be free. I feel better already.

Here’s some video from my CNBC StreetSigns appearance with Robert Shiller.

Check out my new piece in The New Republic:

Speaking at a health care reform rally in Raleigh, North Carolina, in July 2009, President Obama declared that the worst of the recession was over. “We have stopped the free-fall. The market is up and the financial system is no longer on the verge of collapse,” he said proudly.

A year or so later, with midterm elections looming and an electorate that is as fearful and angry as any in memory, the stock market has risen, but even a breath of bad news can send it tumbling. As dismal as housing prices continue to be, they have yet to hit bottom in some places. Unemployment remains frozen at an overall level of nine-plus percent, and job creation has been anemic. If the crisis belonged to George W. Bush, the recovery has been Obama’s—and it has been a fragile and tentative one at best. Along with billions of dollars in stimulus payments, the president has spent down most of his political capital. So what is his next step?

Read the full article here.

Via Marginal Revolution