THE CURSE OF THE CREATIVE CLASS
the opinion of one reader
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The following is the opinion of David Laumer in response to "The Curse of the Creative Class" by Steven Malanga printed in the City Journal. It does not reflect the beliefs of his employer. Click here for excerpts from the City Journal article.

I have read Mr. Malanga's opinion elsewhere, and it is clear to me that we did not read the same book. While the country experiences a dramatic increase in the number of working poor and an erosion of jobs that support families and provide benefits, Mr. Malanga counts jobs as a sign of economic health. I read Florida's book over a year ago, so I am a little rusty as to some of the details, but the thrust was more to do with the mobility of a type of worker he describes collectively as the "Creative Class" and the impact these worker's locational choices have on communities.

As these "Creatives" attempt to maximize the utils related to location of residence, while working to externalize the negatives related to location of work, they choose to live in places that reflect their values and interests. If Detroit or Sioux City create more jobs or more new businesses than the Bay Area or San Diego, they may nonetheless see front office jobs relocated to or their shareholders and founders moving to the cities Florida describes.

The sobering implication of Mr. Florida's work that caused me the most concern, and which Mr. Malanga does not comment on, is the growing regional divide along wealth, class, and quality of life. The back office moves to some place nobody has ever heard of, while the front office relocates to San Diego, or Chicago, or the Bay Area.

Mr. Florida's book told me that you need to ensure that your community provides the basic infrastructure, but that you can't stop there. You also need to do what you can to distinguish your community as a "place." Just as brand managers position products in a marketplace, so cities need to recognize that in an economy where some of the best compensated workers really can "phone it in," the relationship between home and work or front end, back office, and manufacturing has changed. A city's monopoly in provision of services to a business that was tied to a location has been replaced by a marketplace of competing communities vying for the business or the most attractive parts of the business.

In this environment, communities lacking a strong and positive sense of place are simply not going to benefit to the extent that an Austin or Chicago will. In that sense, maybe the efforts of some communities to appear more diverse, more artistic, and more cultured will not prevent the loss of their most affluent and well educated residents. That loss may be masked to the extent that low wage call center or distribution center jobs replace the loss, but only Mr. Malanga will miss the significance.

Cities want to retain or gain their edge, even though many of them will not be able to overcome negatives that come with their location. Communities have spent money on all sorts of economic development schemes over the years. The Music Man wasn't the first or last person to promote music and the arts as an economic development tool. He wasn't doing anything that the railroads hadn't done decades before, or that promoters of stadiums and convention centers wouldn't do nearly a century later.

Still, if forced to make the choice between a stadium, a convention center or the more interesting communities Mr. Florida describes, where is the harm in making an investment in livability or character? If it doesn't work, you are not saddled with an empty stadium or center, but instead with a community where people feel welcomed, where historic buildings are retained as focal points, and where art and music are embedded in the fabric of community. You can hardly fault the effort, unless you are Mr. Malanga.

excerpts from THE CURSE OF THE CREATIVE CLASS
Steven Malanga, City Journal

In his popular book The Rise of the Creative Class, which just appeared in paperback after going through multiple hardcover editions, (Richard) Florida argues that cities that attract gays, bohemians, and ethnic minorities are the new economic powerhouses because they are also the places where creative workers—the kind who start and staff innovative, fast-growing companies—want to live. To lure this workforce, Florida argues, cities must dispense with stuffy old theories of economic development—like the notion that low taxes are what draw in companies and workers—and instead must spend heavily on cultural amenities and pursue progressive social legislation.

He concluded that in the new economic order, the engine of growth wasn’t individual companies but, rather, creative workers, who came to live in cities they admired and then started their own firms or attracted businesses seeking educated workers.

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.

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. 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.

But Florida rarely lets basic economic data get in the way of his theories. Since the Internet meltdown, for instance, he has said that, although some of his most creative cities don’t seem to be doing very well these days, their performance shouldn’t be viewed so narrowly. “These places have been growing for decades building solid new industries that have helped to strengthen our economy,” he writes. But this simply isn’t true. Jobs data going back 20 years, to 1983, show that Florida’s top ten cities as a group actually do worse, lagging behind the national economy by several percentage points, while his so-called least creative cities continue to look like jobs powerhouses, expanding 60 percent faster than his most creative cities during that same period.

Jobs don’t tell the whole story. Florida likes to talk about his most creative cities as centers of innovation, and, based on his writings, one would assume that these cities would be home to thousands of fast-growing companies.

But many are not. In fact, according to one recent independent study of entrepreneurship in America, Florida’s most creative cities are no more likely to be powerful incubators of fast-growing businesses than those at the bottom of his rankings.

Among major cities, Detroit—omitted from Florida’s most creative cities—finished second in the commission’s report, incubating about 50 percent more fast-growing companies than the average of all major cities, with a particular strength in nurturing high-growth manufacturing businesses. By contrast, New York, which is among Florida’s most creative big cities, finished at the bottom of the commission’s study, producing fast-growing companies at less than half the rate of all big cities.

If Florida’s cities can’t produce jobs or high-growth companies at a rapid rate, you would think they would at least do a good job of attracting and retaining people, given the professor’s notion of the importance of place in the new economy, as a magnet not just for the talented but for residents of all kinds. But Florida is wrong again. Many of his “talent magnets” are among the worst at attracting and, more importantly, hanging on to residents.

Click here to read the entire article.

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