Globalization and technology aren’t just producing divergence in outcomes between the highly educated and the lesser educated, but within the higher skill, higher value portion of the economy it is also disproportionately rewarding superstar performers. This secondary divide is one less talked about, but it’s the subject of my column in the January issue of Governing magazine.
Economist Richard Florida calls this phenomenon “winner-take-all urbanism.” It’s the superstar athlete or celebrity effect transposed into the urban world. Just as A-list stars earn far more than the merely famous, the top business talent and the top cities are reaping disproportionate riches over the merely prosperous.
This divide is harder to spot because the people and places involved are often superficially similar. The people in both possess university degrees. They share similar cultural norms, aspirations and politics. The places they live in all have their farm-to-table restaurants, tech startups, artisanal coffee roasters and bicycle commuter infrastructure. As with a sports team, they all wear the same uniform. But some are all-stars while others are role players who are more easily replaced.
When young workers or artists struggle to find an affordable apartment in a global capital, this isn’t just proof of a failure to deregulate housing development. It’s also a marketplace sending a powerful signal that their position among the winners of society is much more precarious than they might imagine. Most would agree that there are some businesses and people who shouldn’t be in New York or San Francisco. We shouldn’t expect a peanut butter spread of talent and economic activity across the country. The nature of the industries concentrated in these places produces a higher-end specialization. So there will be some economic value line below which it isn’t viable to be there.
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My argument is that there are people who have labeled themselves “winners” in the new economy who may successful in a sense, but are much more at risk from the current system than they might want to think.