Creative class claptrap

I have written here previously about the false promise of community development strategies based on attracting the so-called “creative class.”

Now, its discoverer finds problems, as the Washington Post reports:

Richard Florida is rethinking things.

Since publishing the best-selling book “The Rise of the Creative Class” in 2002, Florida has used his considerable speaking and writing heft to push mayors, urban planners and company executives to cater to tech-savvy young professionals.

His argument, in short, was that in order to save themselves from post-industrial ruin, cities needed to attract the best young talent in computer programming, engineering, finance, media and the arts so their towns could build economies based upon the venture capital and start-up companies the new workforce would produce.

Often taking a cue from Florida’s mantra, real estate developers dialed up hip but tiny apartments designed for creative millennials and outfitted them with coffee bars, gyms, pool tables, bocce courts, pool decks and fire pits. Mayors invested in better sidewalks, bike lanes and business incubators aimed at nurturing the new arrivals and keeping them around longer.

Somewhere along the way, however, Florida realized that the workers he so cajoled were eating their cities alive.

In places like New York, San Francisco, Seattle and arguably Washington, the mostly white, young and wealthy “creative class” has so fervently flocked to urban neighborhoods that they have effectively pushed out huge populations of mostly blue-collar and often poor or minority residents.

“I think, to be honest, I and others didn’t realize the contradictory effect,” Florida said Tuesday at a panel discussion. He said he realizes now that prompting creative types to cluster in small areas clearly drove living costs to such heights that low-income and oftentimes middle-income households have been forced elsewhere, creating a divide he did not anticipate.

“We are cramming ourselves into this limited amount of space. And at the same time that the super-affluent, the advantaged, the creative class — we could go on and on [with what to call them] — the techies, global super-rich, absentee investors, invest in these cities, they push others out … and it carves these divides,” he said.

How much of the boom American, Canadian and European cities have experienced can be attributed to Florida’s influence is difficult to discern, but the popularity of his book and its sequels, along with his founding of the CityLab website in partnership with Atlantic Media, plus numerous speaking gigs, made him a household name in planning and business circles. In 2007, for instance, he shared a star turn with futurist Alvin Toffler and Pulitzer Prize-winning columnist Thomas Friedman at a National Conference of the Creative Economy, hosted by the Fairfax County Economic Development Authority.

Last week’s event, held at Union Market in Northeast Washington, drew a crowd of more than 500 people and must have felt like something of a reunion for people who have reshaped Washington since dysfunction and governmental malfeasance drove Congress to temporarily put the city under the authority of a financial control board in 1995. Two former city administrators and three D.C. planning directors attended, dating back to former mayor Anthony Williams’s administration.

But as inequality has deepened in top cities, writers on class and poverty have begun to take sharper aim at Florida’s theory, calling the “creative class” a fallacy and a failed experiment, not because he was wrong that investing in cities would help draw the creative class, but because he argued that doing so would benefit cities at large.

So although he still champions investments in urban areas, at the panel event Florida said the criticism had made a mark. “To be seen as the neoliberal devil, foisting gentrification on cities, is not a situation I like to be seen in,” he said.

Like any good ideas man, Florida has a new idea to fix the old idea, and a book to go with it, called The New Urban Crisis. In an excerpt published on his web site, Florida explained the turnaround in his thinking.

It became increasingly clear to me that the same clustering of talent and economic assets generates a lopsided, unequal urbanism in which a relative handful of superstar cities, and a few elite neighborhoods within them, benefit while many other places stagnate or fall behind. Ultimately, the very same force that drives the growth of our cities and economy broadly also generates the divides that separate us and the contradictions that hold us back.

I’m going to repeat part of a post on this subject in 2012:

Florida has an ideological message here too, as Steven Malanga pointed out:

But most important, to a generation of liberal urban policymakers and politicians who favor big government, Florida’s ideas offer a way to talk economic-development talk while walking the familiar big-spending walk. In the old rhetorical paradigm, left-wing politicians often paid little heed to what mainstream businesses—those that create the bulk of jobs—wanted or needed, except when individual firms threatened to leave town, at which point municipal officials might grudgingly offer tax incentives. The business community was otherwise a giant cash register to be tapped for public revenues—an approach that sparked a steady drain of businesses and jobs out of the big cities once technology freed them from the necessity of staying there.

Now comes Florida with the equivalent of an eat-all-you-want-and-still-lose-weight diet. Yes, you can create needed revenue-generating jobs without having to take the unpalatable measures—shrinking government and cutting taxes—that appeal to old-economy businessmen, the kind with starched shirts and lodge pins in their lapels. You can bypass all that and go straight to the new economy, where the future is happening now. You can draw in Florida’s creative-class capitalists—ponytails, jeans, rock music, and all—by liberal, big-government means: diversity celebrations, “progressive” social legislation, and government spending on cultural amenities. Put another way, Florida’s ideas are breathing new life into an old argument: that taxes, incentives, and business-friendly policies are less important in attracting jobs than social legislation and government-provided amenities. After all, if New York can flourish with its high tax rates, and Austin can boom with its heavy regulatory environment and limits on development, any city can thrive in the new economy. …

Except that …

But a far more serious—indeed, fatal—objection to Florida’s theories is that the economics behind them don’t work. Although Florida’s book bristles with charts and statistics showing how he constructed his various indexes and where cities rank on them, the professor, incredibly, doesn’t provide any data demonstrating that his creative cities actually have vibrant economies that perform well over time. A look at even the most simple economic indicators, in fact, shows that, far from being economic powerhouses, many of Florida’s favored cities are chronic underperformers.

Exhibit A is the most fundamental economic measure, job growth. The professor’s creative index—a composite of his other indexes—lists San Francisco, Austin, Houston, and San Diego among the top ten. His bottom ten include New Orleans, Las Vegas, Memphis, and Oklahoma City, which he says are “stuck in paradigms of old economic development” and are losing their “economic dynamism” to his winners. So you’d expect his winners to be big job producers. Yet since 1993, cities that score the best on Florida’s analysis have actually grown no faster than the overall U.S. jobs economy, increasing their employment base by only slightly more than 17 percent. Florida’s indexes, in fact, are such poor predictors of economic performance that his top cities haven’t even outperformed his bottom ones. Led by big percentage gains in Las Vegas (the fastest-growing local economy in the nation) as well as in Oklahoma City and Memphis, Florida’s ten least creative cities turn out to be jobs powerhouses, adding more than 19 percent to their job totals since 1993—faster growth even than the national economy. …

It’s no coincidence that some of Florida’s urban exemplars perform so unimpressively on these basic measures of growth. As Florida tells us repeatedly, these cities spend money on cultural amenities and other frills, paid for by high taxes, while restricting growth through heavy regulation. Despite Florida’s notion of a new order in economic development, the data make crystal-clear that such policies aren’t people- or business-friendly. The 2000 census figures on out-migration, for instance, show that states with the greatest loss of U.S. citizens in 1996 through 2000—in other words, the go-go years—have among the highest tax rates and are the biggest spenders, while those that did the best job of attracting and retaining people have among the lowest tax rates. A study of 1990 census data by the Cato Institute’s Stephen Moore found much the same thing for cities. Among large cities, those that lost the most population over a ten-year period were the highest-taxing, biggest-spending cities in America, with per-capita taxes 75 percent higher than the fastest-growing cities. Given those figures, maybe Florida should have called his book The Curse of the Creative Class.

My favorite demographer, Joel Kotkin, added after the 2010 election, which reversed much of the 2008 election, which Kotkin called “the triumph of the creative class”:

A term coined by urban guru Richard Florida, “the creative class” also covers what David Brooks more cunningly calls “bourgeois bohemians”–socially liberal, well-educated, predominately white, upper middle-class voters. They are clustered largely in expensive urban centers, along the coasts, around universities and high-tech regions. To this base, Obama can add the welfare dependents, virtually all African-Americans, and the well-organized legions of public employees. …

In contrast, the traditional middle class has not fared well at all. This group consists of virtually everyone who earns the national household median income of $50,000 or somewhat above. They tend to be white, concentrated outside the coasts (except along the Gulf), suburban and politically independent. In 2008 they divided their votes, allowing Obama, with his huge urban, minority and youth base, to win easily.

Since Obama’s inauguration all the economic statistics vital to their lives–job creation, family income, housing prices–have been stagnant or negative. Not surprising then that suburbanites, small businesspeople and middle-income workers walked out on the Democrats last night. They did not do so because they loved the Republicans but because the majority either fears unemployment or already have lost their jobs. Many were employed in the industries such as manufacturing and construction hardest hit in the recession; it has not escaped their attention that Obama’s public-sector allies, paid with their taxes, have remained not only largely unscathed, but much better compensated. …

The middle class is a huge proportion of the population. Thirty-five million households earn between $50,000 and $100,000 a year; close to another 15 million have incomes between $100,000 and $150,000. Together these households overwhelm the number of poor households as well as the highly affluent.

In contrast, the “creative class” represents a relatively small grouping. Some define this group as upward of 40% of the workforce–largely by dint of having a four-year college degree–but this seems far too broad. The creative class is often seen as sharing the hip values of the Bobo crowd. Lumping an accountant with two kids in suburban Detroit or Atlanta with a childless SoHo graphic artist couple seems disingenuous at best. In reality the true creative class, notes demographer Bill Frey, may constitute no more than 5% of the total.

As (apparently) a member of the creative class, I say that any politician who creates an economic development strategy based on 5 percent of the population deserves to be unemployed by the voters. (See Cieslewicz, Dave.) Official Madison has failed to notice that its quality of life is dropping like a rock due to the uncool issues of crime and schools, but on the other hand Madison is also increasingly unaffordable to live in. None of that is particularly friendly for families, regardless of how many parents they have in the house. Nor is substandard job growth.

There is only one demographic group worth pursuing: Families with children. No unit of government should spend 1 cent on attracting non-parents.

 

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