Cooling Off: Why Creative California Could Look to Western New York


Sometimes the stakes are bogus, sometimes the fast lane hits a fork.
Sometimes southern California wants to be western New York
–Lyrics from Dar Williams’ song “Sometimes California Wants to Be Western New York”.

For long, making cultures and making people have been deemed outmoded. It is largely a knowledge economy. And since knowledge has been diverging into “spiky locales” known to be hotbeds of innovation, consider it a double whammy, as most of the relevant geographies are on the coast. The middle of the country is thus irrelevant if you care to survive. It is a man with a pitchfork in a sea of MacBook’s and iLife’s.

For instance, in Edward Glaeser’s 2007 City Journal article he asks: “Can Buffalo Ever Come Back?” Glaeser answers quickly, “Probably not—and government should stop bribing people to stay there”.

It’s true that many cities in the Rust Belt, Appalachia, Iron Range, Great Plains and the like have declined. Many people left. We all know why: jobs mostly, the weather a bit, or too damn depressing—the vacancy and all. We also know that the “flyover country’s” crème de la cream migrated to those gathering pools of talent like San Francisco, Boston, New York, Portland, and the Midwest’s own: Chicago. The reasons this was occurring was because (1) these places were “cool”, and (2) the cluster of talent created for innovation milieus because all the big brains colliding made big ideas, which made products not near the death of their life cycle like, for instance, iron or ovens.

But suppose we are on the cusp of this divergence changing into a convergence of talent spreading back out into the heartland. In short, maybe these spiky locales are overheating, thus releasing “cool” elsewhere, not to mention the freedom to create. The following explains how and why this scenario could unfold.

Allow me to digress for a moment to talk about the Second Law of Thermodynamics, and how it figuratively relates to the flow of capital. Consider it a working metaphor. Components of the Second Law state that whenever energy is out of equilibrium with its surroundings a natural potential exists to return a setting to equilibrium. For instance, if you bring a hot cup of coffee into a cold room, eventually the energetic tension between the cup and the room will dissipate as the heat leaves the coffee until there is thermodynamic equilibrium between the cup and the room. In many respects, I see the same energetic tension existing precariously between the spiky “have’s” of America and the Buffalo-like “have not’s”, with a subsequent resetting coming as talent and capital leak back into a convergent, equilibratory state.

Now, what’s creating this tension, other than feeling sorry for Buffalo, Sioux City, etc.? Well, it’s part cultural, part social, and part economic. But all wholly real.

First, the economic: as the GDP of spikiness goes up so does worker expense. For example, New York City’s cost of living is becoming unsustainable, even for knowledge laborers. From a recent Philadelphia Magazine article discussing a growing trend of New Yorkers moving (to) and commuting (from) Philly, the author notes:

Those of us with young families, in the so-called creative class…were now high-status, poorly paid culture workers who could no longer afford to live in New York, especially with children. Things no longer seemed possible because they weren’t.

This exodus is not a blip. For instance, the borough of Brooklyn has lost nearly a half-million people from 2001 to 2009. To that end, the “spikiness” in this case is the unsustainable nature of global city price points, with fewer and fewer folks able to hang on as expenses skyrocket toward the needle-head of the elite.

What will this mean for the future of jobs? Blogger Jim Russell believes that demand for labor will follow the out-migrating labor supply, even for tech companies. The reasons for this are simple: an increasingly available talent pool in geographies lauded for hard work, and cost. From a Silicon Valley exec who headed to a beer and sausage city:

“I was very skeptical five years ago that I would do a meaningful expansion in Milwaukee…But what I have found is the majority of talent we need in our company, we are able to acquire in that area.”

Space is less expensive, it takes less time to find qualified employees in Milwaukee, and they stay with the company for longer than they would in California, [Edward] Jackson said.

Tied closely to the economic pressures of spiky locales are the social costs. For example, Chicago, once a City of Broad Shoulders, had long ago ditched its industrial ethos and swagger to become the City of Slim Hips. In short, under Mayor Daley, Chicago went all in with global city development, which meant using public funds and incurring public debt to build a place to serve its growing global city clientele. The cost was high, though: crippling municipal debt, a situation no doubt aided by the fact that luring the elite did nothing for jobs, with the city having fewer total jobs in 2009 than it did in its blighted heyday of 1989. Said Richard Longworth:

In other words, Chicago — the only old industrial city in the Midwest to transform itself into a global city, a big success story in the global rankings — still can’t provide as many jobs for its residents as the old sooty City of the Big Shoulders.

And that social cost? It has to do with the effect of creating cities within cities, for as Chicago pumped money into its various beautification endeavors, disparity and poverty festered on its West and South sides. The consequence for the city—for anyone who has been paying attention—is one of the most violent summers in Chicago history, with 56 people shot in a recent three-day period alone. Naturally, violence does nothing to attract talent, with one study showing that for every homicide that occurs in a city, total population declines by 70 people. And while many cities do not rival Chicago’s spike in crime, disparity-driven tensions are deepening fast in spiky locales, thus fermenting the possibility of unrest and subsequent flight.

But at least there are oodles of creativity in “hot and spiky” locales, right? Here, things get interesting.

There exists a subtle yet growing tension in various creative-laden camps regarding the globalization of creativity which—when implemented as a product—is marketed as “cool”. It’s an old tension really, one between selling yourself and being yourself, and the predicament was spelled out nicely in a recent article by Justin Moyer entitled “Our Band Could Be Your Band–How the Brooklynization of culture killed regional music scenes”.

In it, the author laments the dissolving regional sound of music in America that has arisen from a decades-long divergence of musical talent into Brooklyn. For Moyer, vanning to “regional music scenes” allowed for a distinct back and forth between one’s own sound and the sound of the other, with the ping pong in musical differentiation allowing for a betterment of one’s own sound as well as the sound of the other. You know, how creative escalation and interplay is supposed to work.

But somewhere along the way this stopped. As was recently proved in a study detailed in Scientific Reports, everybody started to sound like everybody else. How does Brooklyn do this? What is Brooklyn exactly? Moyer explains, before venting:

Brooklyn has a downside. Those who abandon their [regional music scene] to come to Brooklyn risk co-option by an aesthetic Borg. Things get mushy. There’s too much input, and there’s not a lot that’s not known…There aren’t many secrets. There are no mountains to go over.

…There are many Brooklyns. Los Angeles is Brooklyn. Chicago is Brooklyn. Berlin and London are Brooklyn. Babylon was the Brooklyn of the ancient world. In the 1990s, Seattle was Brooklyn…

Some Brooklyns aren’t even places. MySpace is Brooklyn. YouTube is Brooklyn. Facebook is Brooklyn. Spotify and iTunes are perversely, horribly, unapologetically, maddeningly Brooklyn.

I’m against it.

Moyer is on to something, and he has got good theory behind him; that is: diversity and differentiation drive creativity, be it in the political, social, cultural, or economic realm, whereas homogeneity cloaked in popularity does not. What’s more, creative destruction rarely occurs in places perceptibly intact—be it in Park Slope or posh Naples. It occurs where there is urgency, or where it is needed most. It occurs in places very broken, like Detroit. And so eventually the next wave of a new system can very likely be rippled out from places that have been saturating in the pieces. Said Atlantic writer Alexis Madrigal, who just finished touring the Rust Belt: “[T]here are a lot of places where the apocalypse has already happened”.

Of course this is all very speculative at the moment. The winners are still seen as the winners and the losers still the losers. But the writing is on the wall: the future is in the seams, between the lights and monotone, loud-ass beats.

Even Twitter creator Jack Dorsey thinks so. The Rust Belt native was in Detroit recently discussing how he gets his creative fix. Is it soaking in Silicon Valley with other visionaries? Not exactly. Rather, by taking the bus to work. Why? Dorsey states:

“I actually see real things… That encourages me and gives me a stronger purpose, sense of purpose about what I want to change and how my work might apply to that change

Hear that Buffalo? Don’t listen to your death sentence. You are becoming. Just like Dar Williams predicted.

Richey Piiparinen is a writer and policy researcher based in Cleveland. He is co-editor of Rust Belt Chic: The Cleveland Anthology. This piece originally appeared at his blog.

American Gothic statue in Chicago photo by flickr user GYLo.

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Great Plains Cities On The Decline

There isn't much in the way of cities on the Great Plains. What cities did you have in mind that are on the decline?

Success is being "repelled", as well as "released"

I like the parallel with the law of thermodynamics. But there are a few more factors to consider as well.

I recommend, firstly, William Fruth's short online book "The Flow of Money and Its Impact on Local Economies". Every local economy needs, just as a national economy does, a source of inflowing money to match the inevitable outflows for products not made locally. In other words, each local economy does also need other economies (of all sizes) to be "buying" something FROM them.

Some lucky local economies get "weightless" sources of inflowing money; capital cities get taxpayers money spent on local bureaucrats wages. "Global" cities get finance sector income derived from economic activity from all over the world.

Being "creative" is all very well, but often, what you "create" ends up being made in China - or Texas. While local governments engage in a "race to the bottom" to "attract" the latest s*xy buzz-word creative sector into their region, "quiet achiever" local economies simply get the basics right and indeed most local economies HAVE to do this.

If we should have learned anything from Glaeser, it is that no-one KNEW decades (or even centuries) ago that what was happening then would lead to Manhattan or Silicon Valley becoming what they have become. In all likelihood, politicians and "planners" are chasing the wrong things today, while the path dependent factors that will lead to waves of the more distant future continue to elude analysis.

Besides the "thermodynamics" analogy, the so-called "creative" cities are not helping themselves by practising exclusionary urban policies and regulations that vastly increase the cost to both businesses and workforces, of being located there. And note that even with higher income, higher qualified, "more creative" workforces, the cost of housing is so high (note the median multiples) that locals end up with LESS discretionary income than blue collar workforces in low land cost cities. More on this below.

"New Geography" is one of the best sources of regular information on the resurgence in the low-cost cities of the USA. For many industries, cities in Southern USA make more sense than a low-labour-cost Asian city where land costs are absurdly high, institutions unreliable, and corruption a way of life. Look at where both Boeing and Airbus are building new factories. This makes perfect sense to anyone who has read William Fruth's book.

High housing costs, ironically, result in income being transferred out of the local economy to the "finance" sector. So all those high qualifications, all that "creativity", all those higher incomes in the "vibrant" coastal cities, ends up being attached to a siphon hose off to Wall Street. Way to go. Of course this is great for Manhattan itself; it's economy's flow of money is its own "closed loop" in this regard.

Ryan Avent recently noted that every high-tech job created in a city, has a variable effect on "trickle-down" or "spin-off" jobs in the local economy. The lower local housing costs are, the more local trickle-down/spin-off jobs are created from high-tech ones.

And seeing housing costs seem to find their own much higher "ratio to incomes" in the "exclusionary" cities, even the higher-qualified people in oncoming generations end up "priced out". And often, the "creative" people do not have the money when they are starting out, to locate somewhere expensive. Silicon Valley was cheap when the important players first set up there.

An absolutely "must read" on this very subject, for anyone who has not read it: a hard-hitting open letter from successful Silicon Valley entrepreneur T. J. Rodgers arguing that California has now destroyed the conditions under which Silicon Valley was able to begin, especially low cost land and small business premises.

I quote, from the second to last paragraph:

".....our days of investing in California were over. We would never subject ourselves or our shareholders again to public insults by an anti-business politician over a destructive tax that never should have been passed. We have invested nothing more in our San Jose fab and will soon sell it, to complete the move of the very last of our manufacturing facilities out of the state of California. With only a few exceptions, the silicon has indeed been forced out of Silicon Valley....."

Do read the whole thing.

Jane Jacobs noted that much "creativity" in cities occurs in the lower-rent, "unrenewed" buildings.

So I am one of those who expects the low-cost, "get the basics right" cities of the USA to ride a wave for a while, that they fully deserve.

Excellent comment. Thanks.

Excellent comment. Thanks.