Finding Opportunity in the City

M.I.T. economist David Autor finds in a new analysis that big, dense cities no longer offer low-skilled workers the economic advantages they once did. In the past, cities not just offered better pay for workers, whether with or without a college degree, cities also offered better kinds of jobs. Today, Mr. Autor finds that for workers without any college education, the benefits of higher wages and better jobs have mostly disappeared-- whereas for college-educated workers, the densest urban areas continue to promise much higher wages. 

Mr. Autor’s analysis used wage data from the U.S. Census and American Community Survey

Source: The New York Times

Mr. Autor and other scholars argue that the decline in wage benefits can be attributed to the disappearance of “middle-skill jobs” in production and manufacturing, as well as other clerical, administrative and sales work. In addition to higher wages, these jobs historically offered other benefits such as union benefits, retirement, paid vacation and stability. Now, many of these jobs are not available because they have been outsourced overseas, or automated out of existence. Instead, jobs available to workers with no college education in urban areas are lower-skilled ones such as servers, cleaners, and security guards-- which would also be available in smaller towns and rural communities, hence providing little benefit in moving to urban areas. 

Harvard economist Ed Glaeser continues to advocate for opportunities in cities. Mr. Glaeser posits that the same low-skilled jobs may be available in big cities as rural, small towns, but they are available in much more abundance in big cities. Furthermore, other benefits of moving to cities (as compared to rural areas) could come from access to health care and other social services. 

Many economists and policymakers have suggested that moving to prosperous metros can be a way for workers to find opportunity, especially in areas that have lost manufacturing jobs. However, Mr. Autor suggests that it’s not all that simple: “It’s just not at all obvious what that place [workers should move to] is. It’s less obvious to me now than it was a month ago.” 

Additionally, housing has become much more expensive in the dense cities, putting up additional barriers to moving for lower-skilled workers. Researchers have long acknowledged a divergence in economic opportunity and found that economic opportunity is, in part, tied to geography. But it remains debated where and how opportunity can be encouraged for every worker. A working report by POLITICO and researchers at the Brookings Institution suggest some possible strategies.

Further reading:

Eunice Yau

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