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The New Geography of Jobs
From a rising young economist, an examination of innovation and success, and where to find them in America.
An unprecedented redistribution of jobs, population, and wealth is under way in America, and it is likely to accelerate in the years to come. America’s new economic map shows growing differences, not just between people but especially between communities. In this important and persuasive book, U.C. Berkeley economist Enrico Moretti provides a fresh perspective on the tectonic shifts that are reshaping America’s labor market—from globalization and income inequality to immigration and technological progress—and how these shifts are affecting our communities.
Drawing on a wealth of stimulating new studies, Moretti uncovers what smart policies may be appropriate to address the social challenges that are arising. We’re used to thinking of the United States in dichotomous terms: red versus blue, black versus white, haves versus have-nots. But today there are three Americas. At one extreme are the brain hubs—cities like San Francisco, Boston, Austin, and Durham—with a well-educated labor force and a strong innovation sector. Their workers are among the most productive, creative, and best paid on the planet. At the other extreme are cities once dominated by traditional manufacturing, which are declining rapidly, losing jobs and residents. In the middle are a number of cities that could go either way.
For the past thirty years, the three Americas have been growing apart at an accelerating rate. This divergence is one the most important recent developments in the United States and is causing growing geographic disparities is all other aspects of our lives, from health and longevity to family stability and political engagement. But the winners and losers aren’t necessarily who you’d expect.
Moretti’s groundbreaking research shows that you don’t have to be a scientist or an engineer to thrive in one of these brain hubs. Among the beneficiaries are the workers who support the "idea-creators"—the carpenters, hair stylists, personal trainers, lawyers, doctors, teachers and the like. In fact, Moretti has shown that for every new innovation job in a city, five additional non-innovation jobs are created, and those workers earn higher salaries than their counterparts in other cities.
It wasn’t supposed to be this way. As the global economy shifted from manufacturing to innovation, geography was supposed to matter less. But the pundits were wrong. A new map is being drawn—the inevitable result of deep-seated but rarely discussed economic forces. These trends are reshaping the very fabric of our society. Dealing with this split—supporting growth in the hubs while arresting the decline elsewhere—will be the challenge of the century, and The New Geography of Jobs lights the way.
An unprecedented redistribution of jobs, population, and wealth is under way in America, and it is likely to accelerate in the years to come. America’s new economic map shows growing differences, not just between people but especially between communities. In this important and persuasive book, U.C. Berkeley economist Enrico Moretti provides a fresh perspective on the tectonic shifts that are reshaping America’s labor market—from globalization and income inequality to immigration and technological progress—and how these shifts are affecting our communities.
Drawing on a wealth of stimulating new studies, Moretti uncovers what smart policies may be appropriate to address the social challenges that are arising. We’re used to thinking of the United States in dichotomous terms: red versus blue, black versus white, haves versus have-nots. But today there are three Americas. At one extreme are the brain hubs—cities like San Francisco, Boston, Austin, and Durham—with a well-educated labor force and a strong innovation sector. Their workers are among the most productive, creative, and best paid on the planet. At the other extreme are cities once dominated by traditional manufacturing, which are declining rapidly, losing jobs and residents. In the middle are a number of cities that could go either way.
For the past thirty years, the three Americas have been growing apart at an accelerating rate. This divergence is one the most important recent developments in the United States and is causing growing geographic disparities is all other aspects of our lives, from health and longevity to family stability and political engagement. But the winners and losers aren’t necessarily who you’d expect.
Moretti’s groundbreaking research shows that you don’t have to be a scientist or an engineer to thrive in one of these brain hubs. Among the beneficiaries are the workers who support the "idea-creators"—the carpenters, hair stylists, personal trainers, lawyers, doctors, teachers and the like. In fact, Moretti has shown that for every new innovation job in a city, five additional non-innovation jobs are created, and those workers earn higher salaries than their counterparts in other cities.
It wasn’t supposed to be this way. As the global economy shifted from manufacturing to innovation, geography was supposed to matter less. But the pundits were wrong. A new map is being drawn—the inevitable result of deep-seated but rarely discussed economic forces. These trends are reshaping the very fabric of our society. Dealing with this split—supporting growth in the hubs while arresting the decline elsewhere—will be the challenge of the century, and The New Geography of Jobs lights the way.
304 pages, Hardcover
First published May 22, 2012
About the author
Enrico Moretti
26 books31 followersEnrico Moretti is a professor of economics at the University of California, Berkeley, whose research has been supported by the National Science Foundation, the National Institutes of Health and has been featured in the New York Times, the Wall Street Journal, and Slate, among other publications.
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December 13, 2020
A lot of this is standard neoliberal economic theory presented as absolute truth as applied to the labour market in the US. And so the author applies comparative advantage across towns and cities in ways that economists generally apply this across countries. He also talks down government’s role in establishing innovation hubs and talks up investment capital’s role – but as someone convinced of the advantages of free markets, it would be hard to expect much else from him. He even reprises Milton Friedman’s ‘people should be allowed to sell themselves into slavery to get a decent education’ idea – if not actually in those words. I have to admit, this seemed a bit strange to me. I have a dear friend who has a student debt from the US, after a decade of paying it off, she still owes what she did when she started. She has paid $50,000 and still owes $50,000. I would really love to know where he gets some of his figures about the boon that is gaining a degree in the US, but am not prepared to dig through his references. Naturally, he doesn’t discuss how much more terrible life for people without a degree has become over the same period – that would spoil the three-card trick he is playing. All I can say is that a lot of what he says has an odd smell to it, more of ideology than the ‘it’s straight data’ that he presents it as.
This became particularly obvious to me by some of the things he had to say about PISA, since this is something I do know a bit about. He says:
“Although Shanghai belongs to a developing country, students there perform better than those in all the wealthy nations of the world, including well-organised, homogeneous northern European societies that invest substantially in education”.
Yeah – and that’s sort of true. And sort of not. You see, Hong Kong and Singapore do really well too – they even appear near the top of his list. Now, what do you know about those three places that is different when you compare them with Canada, South Korea or Japan? If you said, the first three are all cities and the last three are all countries, you win the prize. If I was to compare Melbourne to Shanghai PISA results, Melbourne might have done just as well as Shanghai. I suspect Seoul might have done even better. I wouldn’t mind him making this mistake if he wasn’t an economic geographer – and if that wasn’t literally the point of this book, to tell us important things about the economics of locations. If he gets this wrong, what else does he get wrong?
Well, another thing was his extensive discussion of the change in mobility of the US work force. This was done with zero mention of the sub-prime mortgage collapse. The story he tells goes like this. People at the bottom of the employment market ought to move to where the jobs are, but the bastards just don’t – what the hell is wrong with these people? In fact, they are less likely to move than college educated workers. Hopeless. So, we need to provide incentives to get them to shift their lazy arses… Except, the biggest disincentive is the one he doesn’t mention. Lots of poor people were talked into taking out mortgages prior to 2008. Then the housing market collapsed. The house they bought for (I’m making these numbers up) $100,000 is now worth $50,000. But that doesn’t really matter, as long as they don’t sell. If they can continue to meet their housing repayments, they won’t realise their loss. But that also means they can’t shift interstate for a job that pays them 20 cents an hour more, because they can’t afford to not have a house, or to lose $50,000 in selling.
This is something that occurs throughout this book. We are constantly reminded that people at the bottom are perverse in their decisions – which, you might imagine is the exact opposite to what a believer in ‘homo-economicus’ might think, but what would I know? This is yet another book where we are told the main problem is the bad decisions that the poor make.
You need to know that despite my believing in the benefits of education, I do know there are limits to what education can fix. That is not the case here – and how could it be, he is a supply-side economist and so if there is a supply there will always be a demand…right?
As he presents the problem, not all degrees were created equal. He points out that college students have been complete slackers in the US and it is now coming back to bite. To quote:
“Not only are we not producing enough college graduates, we’re not producing the right kinds. One economist (there’s no reference to who this is) has pointed out that while the number of students in visual and performing arts has doubled in the past twenty-five years, the number of students in computer science, chemical engineering, and microbiology has remained flat or declined.”
O dear, how dreadful. Or is it? The US is a world leader in producing really crap TV and movies, the US is literally number one in this. Presumably, to make that garbage you need people working in the field. How many college graduates are there in these fields? You know, if there were only five visual art graduates in 1985, maybe the fact we have 10 now isn’t so surprising or a really bad thing. Who knows, maybe the US actually needs even 20 visual arts graduates now we live in the visual world of the internet. The internet is something that has grown a bit since 1985. A lot of this book is like that. He says stuff that sounds like it might mean something, but when you think about it, well, it doesn’t actually mean anything at all.
But this does give me a chance to quote my favourite quote about STEM degrees being presented as a panacea for the economy. This quote is from The Global Auction: The broken promises of education, jobs and incomes – a book I would recommend to everyone – it is life-changing, I would even recommend it to the author of this.
“…the STEM workforce in the United States totals about 4.8 million, which amounts to less than a third of the 15.7 million workers who hold at least one STEM degree. The fact that large numbers of STEM graduates have entered jobs in non-STEM-related occupations is a timely reminder that solutions to wider economic issues can rarely, if ever, be solved through education alone.”
Okay, now that I’ve ventilated – bits of this book are worth reading. There has been a clear concentration of the best jobs in particular cities and this has created very different outcomes for different regions across the US. The author does stress that there is a multiplier impact of high skilled jobs, something that is often dismissed out of hand by other neoliberal economists –he uses his multiplier idea to disregard any social concerns about gentrification, since, well, benefits trickle down. All the same, people having well paid jobs in an area will have flow-on effects to other workers, mostly in the service industry.
This book, even if you accept his neoliberal vision splendid, is unlikely to leave you feeling particularly optimistic about the future of a ‘united’ states. The major lesson here is that high tech industries cluster since when they cluster they become much more innovative. So, if you are not already a city that is highly innovative, it isn’t at all clear how you might become one. And it also isn’t clear how many of these new industries there will be to go around or what Slow-Ville or Sleepy-Town might be able to do to attract them from Arty-Fun-Place.
I was sort of hoping this book would be, well, you know, more. But it is written by an economist, so, your expectations will need to be trimmed accordingly.
This became particularly obvious to me by some of the things he had to say about PISA, since this is something I do know a bit about. He says:
“Although Shanghai belongs to a developing country, students there perform better than those in all the wealthy nations of the world, including well-organised, homogeneous northern European societies that invest substantially in education”.
Yeah – and that’s sort of true. And sort of not. You see, Hong Kong and Singapore do really well too – they even appear near the top of his list. Now, what do you know about those three places that is different when you compare them with Canada, South Korea or Japan? If you said, the first three are all cities and the last three are all countries, you win the prize. If I was to compare Melbourne to Shanghai PISA results, Melbourne might have done just as well as Shanghai. I suspect Seoul might have done even better. I wouldn’t mind him making this mistake if he wasn’t an economic geographer – and if that wasn’t literally the point of this book, to tell us important things about the economics of locations. If he gets this wrong, what else does he get wrong?
Well, another thing was his extensive discussion of the change in mobility of the US work force. This was done with zero mention of the sub-prime mortgage collapse. The story he tells goes like this. People at the bottom of the employment market ought to move to where the jobs are, but the bastards just don’t – what the hell is wrong with these people? In fact, they are less likely to move than college educated workers. Hopeless. So, we need to provide incentives to get them to shift their lazy arses… Except, the biggest disincentive is the one he doesn’t mention. Lots of poor people were talked into taking out mortgages prior to 2008. Then the housing market collapsed. The house they bought for (I’m making these numbers up) $100,000 is now worth $50,000. But that doesn’t really matter, as long as they don’t sell. If they can continue to meet their housing repayments, they won’t realise their loss. But that also means they can’t shift interstate for a job that pays them 20 cents an hour more, because they can’t afford to not have a house, or to lose $50,000 in selling.
This is something that occurs throughout this book. We are constantly reminded that people at the bottom are perverse in their decisions – which, you might imagine is the exact opposite to what a believer in ‘homo-economicus’ might think, but what would I know? This is yet another book where we are told the main problem is the bad decisions that the poor make.
You need to know that despite my believing in the benefits of education, I do know there are limits to what education can fix. That is not the case here – and how could it be, he is a supply-side economist and so if there is a supply there will always be a demand…right?
As he presents the problem, not all degrees were created equal. He points out that college students have been complete slackers in the US and it is now coming back to bite. To quote:
“Not only are we not producing enough college graduates, we’re not producing the right kinds. One economist (there’s no reference to who this is) has pointed out that while the number of students in visual and performing arts has doubled in the past twenty-five years, the number of students in computer science, chemical engineering, and microbiology has remained flat or declined.”
O dear, how dreadful. Or is it? The US is a world leader in producing really crap TV and movies, the US is literally number one in this. Presumably, to make that garbage you need people working in the field. How many college graduates are there in these fields? You know, if there were only five visual art graduates in 1985, maybe the fact we have 10 now isn’t so surprising or a really bad thing. Who knows, maybe the US actually needs even 20 visual arts graduates now we live in the visual world of the internet. The internet is something that has grown a bit since 1985. A lot of this book is like that. He says stuff that sounds like it might mean something, but when you think about it, well, it doesn’t actually mean anything at all.
But this does give me a chance to quote my favourite quote about STEM degrees being presented as a panacea for the economy. This quote is from The Global Auction: The broken promises of education, jobs and incomes – a book I would recommend to everyone – it is life-changing, I would even recommend it to the author of this.
“…the STEM workforce in the United States totals about 4.8 million, which amounts to less than a third of the 15.7 million workers who hold at least one STEM degree. The fact that large numbers of STEM graduates have entered jobs in non-STEM-related occupations is a timely reminder that solutions to wider economic issues can rarely, if ever, be solved through education alone.”
Okay, now that I’ve ventilated – bits of this book are worth reading. There has been a clear concentration of the best jobs in particular cities and this has created very different outcomes for different regions across the US. The author does stress that there is a multiplier impact of high skilled jobs, something that is often dismissed out of hand by other neoliberal economists –he uses his multiplier idea to disregard any social concerns about gentrification, since, well, benefits trickle down. All the same, people having well paid jobs in an area will have flow-on effects to other workers, mostly in the service industry.
This book, even if you accept his neoliberal vision splendid, is unlikely to leave you feeling particularly optimistic about the future of a ‘united’ states. The major lesson here is that high tech industries cluster since when they cluster they become much more innovative. So, if you are not already a city that is highly innovative, it isn’t at all clear how you might become one. And it also isn’t clear how many of these new industries there will be to go around or what Slow-Ville or Sleepy-Town might be able to do to attract them from Arty-Fun-Place.
I was sort of hoping this book would be, well, you know, more. But it is written by an economist, so, your expectations will need to be trimmed accordingly.
April 19, 2020
Enrico Moretti has studied why jobs accumulate in certain cities and regions, while other regions remain stagnant or worse. He shows how important a hub of innovation can be. But while that hub is aided by the presence of a prominent university, it is not sufficient. Other factors tie in, such as the presence of a few prominent innovators--individuals who draw more and more top innovators into the region. People like to "be where the action is".
The whole issue of the geography of jobs, is that there is a vicious cycle at work. A hub of innovation and technology attracts more innovators, while other areas lose them. There are some things that can be done to reverse this trend--and many municipalities try by introducing tax incentives to lure high-tech companies.
The author is informative, and he as done a massive accumulation of statistics and research to back up his findings. There isn't much technical jargon here, and the casual style is quite approachable by the average reader. Actually, I listened to the audiobook, narrated very nicely by Sean Pratt.
The whole issue of the geography of jobs, is that there is a vicious cycle at work. A hub of innovation and technology attracts more innovators, while other areas lose them. There are some things that can be done to reverse this trend--and many municipalities try by introducing tax incentives to lure high-tech companies.
The author is informative, and he as done a massive accumulation of statistics and research to back up his findings. There isn't much technical jargon here, and the casual style is quite approachable by the average reader. Actually, I listened to the audiobook, narrated very nicely by Sean Pratt.
April 14, 2018
Moretti's book, copyrighted in 2012, is ahead of the curve of books like JD Vance's Hillbilly Elegy and Charles Murray's Coming Apart but gives early hints of the same thing. The book is both investigative--what causes job clusters in cities, especially Silicon Valley--compared with areas unable to attract jobs--and then what should be done to mitigate the divergence.
Moretti's factors include an important mesh of seed companies, early (but not continuing) public investment, strong universities, and good lifestyles.
Moretti's prescription for areas that fall behind rely, alas, on new government programs, and the assumption that the federal government is efficient and unbiased.
It is possible to wonder what might have happened to, say, Solyndra, if we'd taken trade negotiations and currency devaluation by other countries more seriously sooner. As well, Moretti neglects private incentives like the investment resulting from income tax cuts. He does make a good point about labor stickiness--sometimes, people don't want to move to areas with open jobs for family and other reasons.
I highly recommend this book to those interested in job geography for Moretti's research, analysis, and non-obvious conclusions about factors that encourage job growth in specific locations. It's instructive that he wrote it while on sabbatical at Stanford University.
Moretti's factors include an important mesh of seed companies, early (but not continuing) public investment, strong universities, and good lifestyles.
Moretti's prescription for areas that fall behind rely, alas, on new government programs, and the assumption that the federal government is efficient and unbiased.
It is possible to wonder what might have happened to, say, Solyndra, if we'd taken trade negotiations and currency devaluation by other countries more seriously sooner. As well, Moretti neglects private incentives like the investment resulting from income tax cuts. He does make a good point about labor stickiness--sometimes, people don't want to move to areas with open jobs for family and other reasons.
I highly recommend this book to those interested in job geography for Moretti's research, analysis, and non-obvious conclusions about factors that encourage job growth in specific locations. It's instructive that he wrote it while on sabbatical at Stanford University.
May 20, 2014
I was actually pretty surprised at how much I didn't enjoy this book, since I had been looking forward to reading it for a while. Perhaps it's because Moretti's basic premise, that economic goods clusters are great for the economy because they promote growth, is really not anything new (see anything that Michael Porter has ever written). There might be a slight new angle in that the technology sector is now the beloved cluster example of choice and is different from past clusters like manufacturing because it is a knowledge-based good, rather than a physical labor-based good.
My biggest objection throughout the book however, has more to do with the way the author treated the subject of low- and moderate-income individuals, when he chose to do so at all. His suggestion for people losing out because they don't have knowledge-skills is to simply move cities to where there might be more jobs. And there is a continual undervaluing of the impacts of displacement and systemic inequalities in education and neighborhood stratification. I would have liked to have seen a much deeper analysis of all the externalities of the growth he discusses in his book.
My biggest objection throughout the book however, has more to do with the way the author treated the subject of low- and moderate-income individuals, when he chose to do so at all. His suggestion for people losing out because they don't have knowledge-skills is to simply move cities to where there might be more jobs. And there is a continual undervaluing of the impacts of displacement and systemic inequalities in education and neighborhood stratification. I would have liked to have seen a much deeper analysis of all the externalities of the growth he discusses in his book.
December 3, 2018
This book is excellent and a must-read for anyone in policy or who thinks about inequality. There is a lot of great data in here and it really helped me think through some solutions for inequality and unemployment. The fate of American cities mirrors the fate of American people--the "winners" are taking home more of the pie and the "losers" are in free-fall. The same goes for American cities--see for example: San Francisco and Detroit. I think he's much too pessimistic at the end for possible solutions. I do think big public works programs can do a lot to jump start recoveries in some of these cities. I don't see another option.
July 4, 2015
Didn't really answer any questions
This was a solid book, but it raised a few questions that it really just ended up glossing over. Like it ignored the fact that visa recipients are usually willing to work for less money. Or that cost of living in innovation hubs may not matter much for the creative class, but it matters much more for the service sector people. Overall, it just didn't answer all the questions it brought up.
This was a solid book, but it raised a few questions that it really just ended up glossing over. Like it ignored the fact that visa recipients are usually willing to work for less money. Or that cost of living in innovation hubs may not matter much for the creative class, but it matters much more for the service sector people. Overall, it just didn't answer all the questions it brought up.
March 6, 2019
At its best it just rips off Michael Porter.
At its worst it is a sneering defense of corporate stockholders logic with a lack of nuance into why life might be different outside Silicon Valley where the author lives. We all deserve better.
At its worst it is a sneering defense of corporate stockholders logic with a lack of nuance into why life might be different outside Silicon Valley where the author lives. We all deserve better.
June 12, 2013
This was my first foray into geographical economics or economic geography. The bottom line to the book is this: Jobs cluster around innovative centers. Because of this, there is a great divergence in salaries and standard of living that is taking place in America between the most and least innovative metropolitan areas. This has created three Americas (including the middle between the extremes).
All of this is because of a thing called agglomeration that occurs in innovative areas from such seemingly random events as Bill Gates locating Microsoft near Seattle, where he grew up instead of Albuquerque. Agglomeration is a word that describes the benefits that firms obtain when locating near each other.
According to Moretti, there are three primary factors contributing to this.
1. Big demand for innovative workers and big supply of innovative companies.
2. A kind of ecosystem that develops in an area that includes venture capitalists within close driving distance.
3. The idea of knowledge spillover which is a type of human capital externality.
All of this is because of a thing called agglomeration that occurs in innovative areas from such seemingly random events as Bill Gates locating Microsoft near Seattle, where he grew up instead of Albuquerque. Agglomeration is a word that describes the benefits that firms obtain when locating near each other.
According to Moretti, there are three primary factors contributing to this.
1. Big demand for innovative workers and big supply of innovative companies.
2. A kind of ecosystem that develops in an area that includes venture capitalists within close driving distance.
3. The idea of knowledge spillover which is a type of human capital externality.
December 26, 2018
"If you are a below-average worker, Europe offers better security. If you are an exceptionally talented individual, however, the United States offers more: your career will progress faster and your salary will be significantly higher. The United States has one of the highest returns on education among industrialized countries."
February 2, 2019
I'm clearly not an economist.
Moretti does address lots of important issues like the question of mobility and issues inequality more thoughtfully than I've seen from other economists; however, I still found myself unsatisfied with his treatment of these issues. I think it's a disciplinary thing. To Moretti (with the exception of a very small number of points in the text) it seemed that all costs and benefits associated with decision-making are economic. Rephrased, the idea of value as expressed in this book was limited to money. That's a very economics way to approach the world, I guess, so I wouldn't say that I'm surprised, but while I often found his arguments about what increases flows of cash compelling or at least challenging, I almost always found them to ring hollow, as well.
Additionally, the conflation of development with growth, the assumption of infinite constant growth, and the lack of engagement with long-term indirect consequences of short-term practices (I guess the market will take care of such things?) all left me irked.
Most of all, the complete lack of engagement with large-scale structural inequality felt extremely out of touch.
Moretti does address lots of important issues like the question of mobility and issues inequality more thoughtfully than I've seen from other economists; however, I still found myself unsatisfied with his treatment of these issues. I think it's a disciplinary thing. To Moretti (with the exception of a very small number of points in the text) it seemed that all costs and benefits associated with decision-making are economic. Rephrased, the idea of value as expressed in this book was limited to money. That's a very economics way to approach the world, I guess, so I wouldn't say that I'm surprised, but while I often found his arguments about what increases flows of cash compelling or at least challenging, I almost always found them to ring hollow, as well.
Additionally, the conflation of development with growth, the assumption of infinite constant growth, and the lack of engagement with long-term indirect consequences of short-term practices (I guess the market will take care of such things?) all left me irked.
Most of all, the complete lack of engagement with large-scale structural inequality felt extremely out of touch.
April 6, 2015
A great summary of Moretti's and other economists' research on why highly skilled workers tend to be attracted to cities, and why some cities become "innovation hubs" that make everyone who works there wealthier -- not just the best-compensated people -- compared with workers in cities with fewer knowledge-intensive jobs. Moretti raises his concerns about "The Great Divergence," his term for the fact that people's incomes, educational attainment, and even health are better in prosperous cities than in those that are falling behind. Among his proposals are increasing federal subsidies for basic research, which can lead to high-tech jobs years later, and improving public transportation to allow more workers to commute to jobs in expensive but especially productive cities such as San Francisco and New York.
If your primary concern is earning potential, then follow Moretti's advice and move to Silicon Valley, or Manhattan, or London soon after college graduation. If you have other priorities, his suggestions may be less instructive. Wendell Berry would be an interesting counterpoint to this book.
If your primary concern is earning potential, then follow Moretti's advice and move to Silicon Valley, or Manhattan, or London soon after college graduation. If you have other priorities, his suggestions may be less instructive. Wendell Berry would be an interesting counterpoint to this book.
May 10, 2017
If you want to understand the long-run forces shaping the modern economy, read this book. Why can't I afford an apartment in Berkeley? Why are there no jobs in the middle of the country, or for less educated workers? What about immigration?
The only problem with reading this book is that unless you already own a home in SF, Seattle, Austin, DC, or a handful of other places, *and* are very well educated (I'm 1 for 2), you're SOL. The cities with tech jobs will continue to grow, the well-educated will continue to do fine, and former manufacturing cities and their on average less well-educated workers will continue to decline. (There's really not much political in this book, though there are a few basic policy prescriptions--America either needs to educate its workforce a lot better or let in more high skilled immigrants. We should also tweak unemployment insurance by helping the unemployed move from weak labor market states to hot ones, and building more housing in the hot one.)
Most economists are terrible writers; Enrico is refreshingly good. It's full of anecdotes explaining the data--almost like a journalist or someone who knows how to talk to human beings wrote it.
The only problem with reading this book is that unless you already own a home in SF, Seattle, Austin, DC, or a handful of other places, *and* are very well educated (I'm 1 for 2), you're SOL. The cities with tech jobs will continue to grow, the well-educated will continue to do fine, and former manufacturing cities and their on average less well-educated workers will continue to decline. (There's really not much political in this book, though there are a few basic policy prescriptions--America either needs to educate its workforce a lot better or let in more high skilled immigrants. We should also tweak unemployment insurance by helping the unemployed move from weak labor market states to hot ones, and building more housing in the hot one.)
Most economists are terrible writers; Enrico is refreshingly good. It's full of anecdotes explaining the data--almost like a journalist or someone who knows how to talk to human beings wrote it.
August 15, 2020
I'd love to read the sequel now that mass working from home will disrupt a lot of the ideas in this book.
December 31, 2018
Like anything out of silicon valley, it is a little more heavy on venture capital as the panacea, but otherwise it's a fantastic outline on modern economic forces, why cities are growing, and what we need to do next.
October 3, 2018
Good read if you're interested in the topic.
* High paying knowledge jobs cause a "spill over" effect, creating a surprising number of other jobs: "Indeed, my research shows that for each new high-tech job in a city, five additional jobs are ultimately created outside of the high-tech sector in that city, both in skilled occupations (lawyers, teachers, nurses) and in unskilled ones (waiters, hairdressers, carpenters). For each new software designer hired at Twitter in San Francisco, there are five new job openings for baristas, personal trainers, doctors, and taxi drivers in the community."
* Seattle was a shithole only like 30-40 years ago but now it's great.
* "Since college graduates are not compensated for the benefit that they bestow on everyone around them, there are fewer college graduates than we as a society would ideally like. To put it differently, if the salary of college graduates reflected its full social value, more people would go to college. One way to correct for this market failure is to provide public subsidies for college education. Indeed, this is the reason that state and local governments pick up much of the cost of educating their residents. There are certainly other reasons to justify public investment in higher education—political and ethical—but I know of none more powerful than this one. It is in our own interest to subsidize other people’s education, as it ends up indirectly benefiting us."
* America is in big trouble, education wise. Need to either fix high school or fix immigration.
* High paying knowledge jobs cause a "spill over" effect, creating a surprising number of other jobs: "Indeed, my research shows that for each new high-tech job in a city, five additional jobs are ultimately created outside of the high-tech sector in that city, both in skilled occupations (lawyers, teachers, nurses) and in unskilled ones (waiters, hairdressers, carpenters). For each new software designer hired at Twitter in San Francisco, there are five new job openings for baristas, personal trainers, doctors, and taxi drivers in the community."
* Seattle was a shithole only like 30-40 years ago but now it's great.
* "Since college graduates are not compensated for the benefit that they bestow on everyone around them, there are fewer college graduates than we as a society would ideally like. To put it differently, if the salary of college graduates reflected its full social value, more people would go to college. One way to correct for this market failure is to provide public subsidies for college education. Indeed, this is the reason that state and local governments pick up much of the cost of educating their residents. There are certainly other reasons to justify public investment in higher education—political and ethical—but I know of none more powerful than this one. It is in our own interest to subsidize other people’s education, as it ends up indirectly benefiting us."
* America is in big trouble, education wise. Need to either fix high school or fix immigration.
February 13, 2016
I picked up this book a couple years ago because I was tired of reading periodicals constantly trying to incite American class warfare. Specifically, the articles and journalists that decried upwardly mobile sectors (like tech), but never gave holistic pictures of the actual problem or potential solutions to urban inequality.
Enrico Moretti, professor of economics at UC Berkeley, describes how developments in the US economy have contributed to the evolution (or devolution) of urban centers all over the United States. He also demonstrates how reactionary policies in both business and government can determine the rise or fall of American cities.
There are a lot of good case studies and trends in the book-- too many for a GR review. However, my favorite one was the job multiplier effect.
This exemplifies the strengths of community synergy between skilled and high-skilled labor.
Moretti's New Geography of Jobs gives an honest, balanced insight into the systemic issues facing American cities, not just their symptoms.
Enrico Moretti, professor of economics at UC Berkeley, describes how developments in the US economy have contributed to the evolution (or devolution) of urban centers all over the United States. He also demonstrates how reactionary policies in both business and government can determine the rise or fall of American cities.
There are a lot of good case studies and trends in the book-- too many for a GR review. However, my favorite one was the job multiplier effect.
"Every time a company generates a job in the innovation sector, it also indirectly creates additional jobs in the non-traded sector in the same city. Attracting a new scientist, software engineer, or mathematician to a city increases a demand for local services. This in turn means more jobs for cabdrivers, housekeepers, carpenters, nannies, hairstylists, doctors, lawyers, dog walkers, and therapists" etc. (p. 59)
This exemplifies the strengths of community synergy between skilled and high-skilled labor.
Moretti's New Geography of Jobs gives an honest, balanced insight into the systemic issues facing American cities, not just their symptoms.
September 20, 2017
In questo periodo di vita costellato da libri nei quali voglio ritrovare un senso (non alla vita, ma alla attualità, e non so quale dei due sia piu' complicato) mi capita tra le mani questo di Moretti - che invidio gia' un pochino per il domicilio e per l'eta'. Il testo, originariamente scritto nella lingua del Bardo, è stato tradotto in italiano ed è semplice e immediato - come si richiede ad un testo anglosassone. Il corpus di studi e analisi di dati è ampio ed articolato e assai interessante.
Il fatto che sia sbilanciato sugli USA e' fin da subito dichiarato e non disturba. Anzi, sapere che gli americani che non hanno studiato e che abitano nei luoghi meno attrattivi degli States hanno la stessa prospettiva di reddito dei nostri migliori laureati nelle città del NordItalia, mi fa sentire un poco meno solo nel mondo.
Il messaggio che mi arriva e': studia e spostati.
Il fatto che tu abbia un futuro esattamente dove abiti e' solo questione di fortuna.
Il fatto che sia sbilanciato sugli USA e' fin da subito dichiarato e non disturba. Anzi, sapere che gli americani che non hanno studiato e che abitano nei luoghi meno attrattivi degli States hanno la stessa prospettiva di reddito dei nostri migliori laureati nelle città del NordItalia, mi fa sentire un poco meno solo nel mondo.
Il messaggio che mi arriva e': studia e spostati.
Il fatto che tu abbia un futuro esattamente dove abiti e' solo questione di fortuna.
January 10, 2019
It’s a well written explainer of agglomeration and gives a concise explanation for large pieces of the system of business, economics, trade, and immigration sometimes known as neoliberalism.
It is from 2012, so it’s something of an interesting time capsule. It was written while the effects of the Great Recession were still being felt but still has optimism throughout. I do wonder how much it will hold up over time; the book takes of endless migration patterns towards the big cities but I heard an interview with the CEO of an online real estate company while reading this that 2018 had a trend of people moving away from the big cities towards the heartland. We’ll see.
In any event, it is a good summation of how much of the American economy works without being too technical or too long. That in and of itself is laudable.
It is from 2012, so it’s something of an interesting time capsule. It was written while the effects of the Great Recession were still being felt but still has optimism throughout. I do wonder how much it will hold up over time; the book takes of endless migration patterns towards the big cities but I heard an interview with the CEO of an online real estate company while reading this that 2018 had a trend of people moving away from the big cities towards the heartland. We’ll see.
In any event, it is a good summation of how much of the American economy works without being too technical or too long. That in and of itself is laudable.
September 12, 2020
“An unprecedented redistribution of jobs, population, and wealth is under way in America, and it’s likely to accelerate in the decades to come.”
Helped me understand why the most prosperity in the US has concentrated in just a handful of cities, and why others are left behind. The author also argued that our nation would be much richer and more equal if we paid for more students to go to college, allowed more educated immigrants into the country, and loosened development restrictions in big cities so more housing can be built.
I wish some of these arguments were paired with more nuance — eg shouldn’t our immigration system be streamlined for all immigrants, not just the ones with PHDs? Despite the straightforward and sometimes cold economist approach, this book made me rethink the anatomy of wealth in the US and took different angles of national issues we hear about every day.
Helped me understand why the most prosperity in the US has concentrated in just a handful of cities, and why others are left behind. The author also argued that our nation would be much richer and more equal if we paid for more students to go to college, allowed more educated immigrants into the country, and loosened development restrictions in big cities so more housing can be built.
I wish some of these arguments were paired with more nuance — eg shouldn’t our immigration system be streamlined for all immigrants, not just the ones with PHDs? Despite the straightforward and sometimes cold economist approach, this book made me rethink the anatomy of wealth in the US and took different angles of national issues we hear about every day.
February 23, 2019
Really interesting. Made me want to move to Silicon Valley. Also inspired me to delete all the games off my phone because I haven't yet met my potential of economic productiveness and I need to get on that.
Also, whatever Moretti does is my dream job.
Also, whatever Moretti does is my dream job.
September 12, 2020
I loved this book. It's largely cold and clinical, but you can feel Moretti's anger come through the page when he turns to America's public conversation around immigration. There are 14 engineers on my team at Amazon, and me and one other guy are white; the majority of the team are immigrants. If Amazon could find US citizens to hire, they would surely do so as it is significantly cheaper. No H1B process, cheaper relocation costs, etc. It's funny that he had such disdain for the conversation that was happening in 2012—I'm sure he became even more disappointed after Donald Trump came on the scene a few years later.
This book reaffirms my intuition that cities will remain powerful even in the post-COVID era. Moretti demonstrates that "innovation hubs" occur because information is shared between workers in informal settings, creating knowledge "spillover". This spillover is what makes innovation hubs like Seattle and the Bay Area so dominant.
Other tidbits from this book that changed my outlook:
1. Workers with at least a college education are much more mobile than non-college educated workers, which results in a nearly uniform unemployment rate among the college educated across the US, whereas there are big variations in the unemployment rate for unskilled workers.
2. The benefits of strong state-sponsored university systems (e.g. University of Michigan and The Ohio State University) only have a weak correlation with strong economies in their states because college educated workers are mobile.
3. Economic inequality is a side-effect of a very high demand for highly-educated workers that is not being met by supply. If we want to reduce inequality, we should increase our investment in education.
It was also nice to see a discussion of cost of living constraints in the book. The questions around affordability and gentrification have fascinated me for the past 4 or 5 years. Moretti argues that it's simply a supply problem and the Bay Area's NIMBY predilections make the city less dynamic than it would be otherwise. I couldn't agree more—a big driver in my decision to move to Seattle is the fact that they pursued a sane housing policy.
Anyways, this book changed my set of beliefs on public policy, so I can't help but to give it 5 stars. The fact that it did so in a concise, readable manner is just icing on the cake.
This book reaffirms my intuition that cities will remain powerful even in the post-COVID era. Moretti demonstrates that "innovation hubs" occur because information is shared between workers in informal settings, creating knowledge "spillover". This spillover is what makes innovation hubs like Seattle and the Bay Area so dominant.
Other tidbits from this book that changed my outlook:
1. Workers with at least a college education are much more mobile than non-college educated workers, which results in a nearly uniform unemployment rate among the college educated across the US, whereas there are big variations in the unemployment rate for unskilled workers.
2. The benefits of strong state-sponsored university systems (e.g. University of Michigan and The Ohio State University) only have a weak correlation with strong economies in their states because college educated workers are mobile.
3. Economic inequality is a side-effect of a very high demand for highly-educated workers that is not being met by supply. If we want to reduce inequality, we should increase our investment in education.
It was also nice to see a discussion of cost of living constraints in the book. The questions around affordability and gentrification have fascinated me for the past 4 or 5 years. Moretti argues that it's simply a supply problem and the Bay Area's NIMBY predilections make the city less dynamic than it would be otherwise. I couldn't agree more—a big driver in my decision to move to Seattle is the fact that they pursued a sane housing policy.
Anyways, this book changed my set of beliefs on public policy, so I can't help but to give it 5 stars. The fact that it did so in a concise, readable manner is just icing on the cake.
February 19, 2021
Life's too short to finish shitty books. I was hoping to read something that would put into words the vague feeling of discontent I have that my immediate family is spread across the US. Yet I have first cousins who all still live within one block of each other in the small town where they grew up. I know it has to do with our jobs, careers, maybe level of education, but I was hoping to read something more than a gut feeling. Anyway: THIS IS NOT THAT BOOK.
This is a book like Freakonomics (which is one of the worst books I've ever read). Like here's something people know, and now I'm going to use my narrow-minded view of life to make some pithy, radical, off-the-wall comment about it!
This book was all about how poor people are poor because they suck, and rich people were just smart to move to places like San Francisco. There is no analysis of capitalism. None. The author goes on about how WalMart is good for poor people without looking into how WalMart contributes to global poverty. I didn't get far enough to see if there was a critical look into the decimation of labor unions, but I doubt the author was enlightened enough to understand that that, more so than where people live, has contributed to the stagnating and lowering wages of so many people in the United States. Let's not even look into structural racism, student loan debt, the housing crisis, moving risk from corporations to employees (I'm looking at you Uber), and so many other things that are screwing people over, so much more so than where they live.
Seriously, I just can't even with books like this. I can't imagine what it must be like to be so ignorant and privileged that I could choose to ignore the reality of so many people.
This is a book like Freakonomics (which is one of the worst books I've ever read). Like here's something people know, and now I'm going to use my narrow-minded view of life to make some pithy, radical, off-the-wall comment about it!
This book was all about how poor people are poor because they suck, and rich people were just smart to move to places like San Francisco. There is no analysis of capitalism. None. The author goes on about how WalMart is good for poor people without looking into how WalMart contributes to global poverty. I didn't get far enough to see if there was a critical look into the decimation of labor unions, but I doubt the author was enlightened enough to understand that that, more so than where people live, has contributed to the stagnating and lowering wages of so many people in the United States. Let's not even look into structural racism, student loan debt, the housing crisis, moving risk from corporations to employees (I'm looking at you Uber), and so many other things that are screwing people over, so much more so than where they live.
Seriously, I just can't even with books like this. I can't imagine what it must be like to be so ignorant and privileged that I could choose to ignore the reality of so many people.
September 18, 2021
Moretti faz um ótimo trabalho ao definir o que levou a América a manter um crescimento acelerado: investimentos em educação, ou seja, capital humano, levaram a criação de toda uma indústria de inovação que é extremamente "path-dependent" - tanto em níveis nacionais quanto em níveis locais. Ou seja, o assunto importa tanto para se pensar na política macro, quanto micro de um país. No Ocidente, com o fim do boom econômico e populações envelhecidas, é um desafio encontrar opções para o crescimento dos países, embora os EUA e a Europa como um todo tivessem essa vantagem histórica e impedir a "Grande Divergência" de atingir tão fortemente seus cidadãos.
Os EUA tinham duas escolhas históricas a serem tomadas: incentivar o aumento do capital humano, por meio de melhoria do sistema educacional, ou por meio de imigrantes. Está claro, oito anos depois do livro ser escrito, que a política imediatista venceu - vimos poucos avanços nos últimos governos para escolher qualquer um desses caminhos, a pesquisa e desenvolvimento tem fluído para a China, o crescimento de patentes desacelerou, enquanto os americanos reclamam pela falta de trabalhos para a classe média. O Brasil, possuindo números de aplicações de patentes também estagnadas, demonstra cada vez menos vontade de crescer.
Os EUA tinham duas escolhas históricas a serem tomadas: incentivar o aumento do capital humano, por meio de melhoria do sistema educacional, ou por meio de imigrantes. Está claro, oito anos depois do livro ser escrito, que a política imediatista venceu - vimos poucos avanços nos últimos governos para escolher qualquer um desses caminhos, a pesquisa e desenvolvimento tem fluído para a China, o crescimento de patentes desacelerou, enquanto os americanos reclamam pela falta de trabalhos para a classe média. O Brasil, possuindo números de aplicações de patentes também estagnadas, demonstra cada vez menos vontade de crescer.
August 27, 2022
This book was recently recommended on a podcast and I had it in my head that it was more recent. As I listened, it dawned on me that the book was more than a decade old and I got hit by a kind of retroactive nostalgia. The author comments on policies like opening immigration or improving secondary education or funding research that could have improved American prosperity and competitiveness. Yes, trade costs jobs but the benefits far outweigh the costs, we just need to help those displaced from the workforce. Nonetheless, a few things popped out:
*What cities become big in the modern tech economies are often accidents. A small company becomes huge simply because that's where it was founded and becomes a nexus of technology and smaller firms. The location could almost be arbitrary.
*American manufacturing on a per worker basis is remarkably productive. Still, in 2022, worker productivity beats out most other countries.
*The dividends to research are huge and should be encouraged especially as technical implementation rises in complexity.
*The arrow of causality between cultural amenities and jobs is tenuous. You may not be able to attract people with an arts district so much as a thriving city can support an arts district.
I'd be curious to see what the 2025 version of this book would look like once we have an idea of how report work shapes out, but for now, this book documents what we already know and provides prescriptions we chose not to follow.
*What cities become big in the modern tech economies are often accidents. A small company becomes huge simply because that's where it was founded and becomes a nexus of technology and smaller firms. The location could almost be arbitrary.
*American manufacturing on a per worker basis is remarkably productive. Still, in 2022, worker productivity beats out most other countries.
*The dividends to research are huge and should be encouraged especially as technical implementation rises in complexity.
*The arrow of causality between cultural amenities and jobs is tenuous. You may not be able to attract people with an arts district so much as a thriving city can support an arts district.
I'd be curious to see what the 2025 version of this book would look like once we have an idea of how report work shapes out, but for now, this book documents what we already know and provides prescriptions we chose not to follow.
January 30, 2020
Un ottimo saggio per capire come sta cambiando il mondo del lavoro.
In particolare, Moretti racconta non solo di come ormai sia l'innovazione il "settore" trainante, ma evidenzia gli impatti geografici (molto rilevanti) e quelli sulla disuguaglianza.
Pur essendo incentrato sugli Stati Uniti, è un libro molto utile per capire un aspetto molto importante (e per certi versi banale, eppure ignorato, almeno in Italia) del mondo occidentale contemporaneo: il lavoro sta cambiando, e sarebbe meglio governare questo cambiamento invece di essere travolti
In particolare, Moretti racconta non solo di come ormai sia l'innovazione il "settore" trainante, ma evidenzia gli impatti geografici (molto rilevanti) e quelli sulla disuguaglianza.
Pur essendo incentrato sugli Stati Uniti, è un libro molto utile per capire un aspetto molto importante (e per certi versi banale, eppure ignorato, almeno in Italia) del mondo occidentale contemporaneo: il lavoro sta cambiando, e sarebbe meglio governare questo cambiamento invece di essere travolti
December 3, 2018
A really good book, it doesn’t have the typical pop economics feel, it explores the issue in depth while also incorporating and explaining basic international economics theories yet it manages to do it in such a way that it could easy be read by non-economists as well. Not only I would recommend it to pretty much everyone, but I’d say it’s en essential read for any US voter.
May 6, 2019
This is not what I expected, but so much better. Rather than a list of what jobs can be found where, this is an in depth look at the forces that separate places like Silicon Valley from Detroit in terms of opportunity and income. The author also talks in depth about the global workforce differs and competes with our (US) own. This would have been an amazingly useful read my freshman year of college or sooner.
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July 12, 2020Interesting read through the lens of covid- I do think a lot of points are still valid but curious if localization of jobs/hubs will persist as there is more acceptance of remote work in the idea economy
October 31, 2020
Listened to this book on the way to work. Love economics and how they apply to life. Interesting concepts from the book were about how important manufacturing is in providing jobs. A strong manufacturing area will lead to jobs which in turn will lead to service jobs and a strong city. Innovation is key to coming up with ideas to promote new businesses and jobs, and what breeds innovation is a educated people and good universities.
If I take one thing away from the last two things I’ve read it is this. Both in Elon Musks book and this one it talks about human capital and the skills people provide that in turn create wealth for them and others because of their own genius and education in their fields.
If I take one thing away from the last two things I’ve read it is this. Both in Elon Musks book and this one it talks about human capital and the skills people provide that in turn create wealth for them and others because of their own genius and education in their fields.
June 1, 2019
Best book I've read in 2019. A must-read for college kids, business professionals, and people with any type of future ahead of them!
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