The Gravitational Forces Around Superstar Cities Have Strengthened
Americans were already grappling with the realities of have and have-not regions in the U.S. in terms of jobs and money. Now human rights have joined the list of inequalities.
Back at the beginning of the pandemic, a really popular idea in some Twitter circles was the conceit that remote working would lead to a mass exodus of talented people from what Richard Florida termed America's "superstar cities."
These superstar cities -- among them New York, Los Angeles, Chicago, Washington, D.C., Seattle, San Francisco, San Jose, Austin, Boston -- were characterized by the sociologist as "knowledge and tech hubs," places where new companies, cultural movements, and industries percolate and then disseminate to the rest of the United States.
These cities are often cited as a symptom of "winner take all" urbanism, grabbing big shares of capital and talent. As Florida wrote:
They generate the greatest levels of innovation, control and attract the largest shares of global capital and investment, have huge concentrations of leading-edge finance, media, entertainment, and tech industries, and are home to a disproportionate share of the world’s talent. They are not just the places where the most ambitious and most talented people want to be—they are where such people feel they need to be.
These cities are also tremendously expensive in which to live unless you have a superstar salary.
After a few weeks of sheltering in place, folks began blatting on Twitter that lockdown had robbed superstar cities of their glittering attractions, and now that people could work anywhere, they'd all flee to spacious houses in the suburbs, thus improving their qualities of life and bathing other parts of the country in that sweet, San Francisco salary-level cash.
I never bought into this theory. Even before the pandemic that whenever employers hired workers, two things informed a worker's salary range:
The employer's goal to pay an employee as little as they could get away with.
What reasonable compensation in the local job market looked like
The expectation that an employer wouldn't immediately dock pay for someone fleeing Palo Alto for Pawnee was naive at best. It was no surprise in late 2020 when tech companies announced that relocations would prompt salary adjustments.
(A recent Geekwire story about remote work pay led with the news that techies in Seattle were now approaching Bay Area-level compensation, suggesting that indeed, higher salaries would spread from the west coast to the rest of the country. Ten paragraphs later, the story noted, "Even with this convergence of tech pay across geographies, about 84% of companies are taking geography into account when setting compensation, adjusting for the differences that do exist." (Emphasis mine.))
That's not to say there aren't tech jobs west of the Sierra Nevada range. However, the big story about the diffusion of tech talent across the U.S. is not about whole new companies and industry verticals arising in Denver or Raleigh-Durham. Rather, companies that got their start in California were opening additional offices or relocating once they were well established and the industry-defining innovation phase had cooled into routinized business activity.
(Or, in pop culture terms, once the company shifts from being Pied Piper to Veridian Dynamics, that's when they launch satellite offices in non-superstar cities.)
These people will not pay San Francisco-level rents.
Until now, superstar cities across the country have largely been associated with a certain, homogenous type of urbanism -- quality museums and performing arts companies, a local food scene, theaters, nightclubs, galleries, parks, thriving independent retailers, and resoundingly Democratic voting. (In the 2020 presidential election, Joe Biden won America’s 477 densely populated and diverse counties — counties that also happen to generate 70% of U.S. GDP.)
One optimistic narrative was that the rising crop of cities which benefitted from superstar city spillover -- from new offices to new workers who wanted smaller, less expensive cities with the same cultural and social amenities -- would pull some of the capital and growth in what sociologist Nicholas Bloom calls a "rise of the rest" scenario.
What will be interesting to watch is whether or not "the rest" will continue to rise if they're in states that have just decided women have no legal right to medical care or bodily autonomy.
So What?
Some corporations are trying to placate their talent by saying, "If you work in Texas, we'll bankroll your travel to a state that believes in healthcare" -- a perk that will be useful until the moment when a state begins prosecuting women for attempting to cross state lines while in possession of a uterus -- but headhunters and business leadership councils are already looking at how these inhospitable climates will hurt recruiting.
American woman conducting employee 1:1 meeting, Q1 2023.
After all, women represent over 50% of the labor force and over 50% of college graduates; young women just entering the labor market are going to do some very careful calculations about how much they value access to medical care, including lifesaving drugs like chemotherapy combinations (another no-no for women in states that prohibit abortion) over how cheap an apartment in a non-superstar city may be. And there are young men who will refuse to live in places where their partners aren't legally adults.
We're in a talent crunch. Employers can and will capitalize on location like never before.
That talent crunch may manifest first at colleges in red states: Students are already factoring in location when considering colleges, and colleges in the twenty-four states that don't have immediate abortion bans stand to benefit from a more competitive applicant pool. "I don't want to go to school in a state where there is an abortion ban" is going to be a real consideration.
While conservative politicians may not see this as a problem -- the GOP polls strongly against college education -- the same may not be true for the small towns throughout red states which relied on colleges to keep their economies ticking along.
In other words: a state's abortion ban doesn't just discourage a college graduate from taking a job there. It discourages families from sinking money into that state via a college education. And it hurts the ability to cultivate the kinds of industries that are powering the 21st-century economy. The ripple effects hurt the whole state.
Who Cares?
Hiring managers do. We're in a talent crunch, even with the looming recession. (In fact, this recession may not prompt layoffs because companies have spent three years learning how bloody hard it is to hire and retain people.) The people who are responsible for keeping the candidate pipelines full just had their jobs made harder.
It does not matter how cool a city is if you can't get medical care. If a talented candidate is weighing the options between a job located where they have full access to medical care versus a job in a state where they or their partner will die of sepsis in an emergency room after an ectopic pregnancy ruptures, guess which one wins? And if you hire a talented candidate in a blue state, then try the ol' bait-and-switch transfer to a red state, do you really want to gamble that the employee likes the job enough to give up their personal safety or their partner's safety? Or that they won’t immediately find another employer where they are?
State politicians do. Some blue-state leaders have been extremely vocal in encouraging businesses to move to places where women can still get medical care. However, housing costs are higher in blue states, so expect a flurry of activity around both regulations for higher-density and affordable housing (cough, cough, California) and tax incentives to lure businesses to the state -- and to lure the businesses that will support the demands generated by business and employee relocations.
The Brookings Institute has been tracking the numbers on tech jobs in the U.S.'s urban centers and noted that despite the rise of "Zoom towns" and some population diffusion toward "quality-of-life meccas" like Boulder, CO., the superstar city advantages persist. Their recommendation for cultivating and growing any tech employment:
In many parts of the country, renewed state investments in public higher education (after a period of disinvestment) will be necessary in building up new tech hubs. In other regions, the way forward will likely involve complementing existing higher education strengths with coordinated state-level economic development strategies.
Keep an eye out for canny state politicians and university leaders to adopt these plays, thus making their states even more attractive to ambitious and talented young people.
Activists do. If there's an exodus from the red states, it's going to be the people who can afford to leave and have opportunities elsewhere. The soft sanctions and ongoing brain drain will only make life harder for the people who have been battling for equal access to medical care, along with voter rights, environmental regulations, and other quality-of-life issues.
Americans do. As resources continue redistributing in this country, aided and abetted by the gravitational pull of superstar cities, there are a lot of people who are left out of the orbit of the 21st-century economy, either by chance or by choice. Talk of secession has already sprung up -- and we may soon get to the point where everyone begins asking, "Maybe we're better off without one another?" If we can’t offer a civic framework of equal opportunities and equal rights for everyone, what’s left?