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Why Some Cities Get All the Good Jobs (chicagotribune.com)
New submitter Ericmesrr writes with a link to a Bloomberg story (as carried by the ChicagoTribune) about geographic trends in job creation in the U.S, from which he excerpts this quote from U.C Berkeley economist Enrico Moretti: "A handful of cities with the 'right' industries and a solid base of human capital keep attracting good employers and offering high wages, while those at the other extreme, cities with the 'wrong' industries and a limited human capital base, are stuck with dead-end jobs and low average wages. This divide I will call it the Great Divergence has its origins in the 1980s, when American cities started to be increasingly defined by their residents' levels of education. Cities with many college-educated workers started attracting even more, and cities with a less educated workforce started losing ground."
I find this trend quite strange as well. In the late 90s everyone was going on about how technology would allow us to work from anywhere so we could spread out around the country. Things like cramming into an urban area, and flying to conferences were going to become unnecessary.
Instead what I've observed is that the rise of 'thinking' jobs, which only require a desk, have made it more and more viable for people to live in concentrated urban centres. Contrast this with industrial jobs where you needed large amounts of land for a factory which naturally led to suburban developments. Similarly the rise of cheap air travel has raised the expectation that you'll just turn up at a conference, so I find I have to attend more now.
I think this trend will continue until driverless cars are ubiquitous. These will open up huge amounts of land around urban centres (it will be like adding tube lines everywhere), and will probably cause a significant decline in central city density as people are freed from existing rent/transport monopolies.
I think you greatly underestimate the value of creating large pools of talent in a single location. It is true that an individual can succeed on his own, working virtually in support of a company or himself. However, when you live in a community of similar talent, there's a sharpening effect - people coming together, sharing ideas, supporting one another, and ultimately, creating new businesses together. It's not impossible for this to happen virtually, but it is much easier when people are close to one another, able to do this informally whether over coffee, dinner, drink or just hanging out - essentially living life together. Proximity allows for much more rapid and deeper networking so that when those new ideas emerge, it's much easier to find and recruit the talent you need. Finally, when you have concentrated pools like this, you begin to develop secondary infrastructure that makes doing business in that area all that much more attractive - venture capital all the way down to better coffee.
I get you on the whole driverless car and hyperloop thing, but people really are very localized, and unless you can make both so fast that the thought of going to another city for drinks is no different a time and energy commitment than going to the bar a couple blocks away, it's not going to really work.
Why does California have all the tech job? It is because non-compete clause are difficult to impose which allows talented individuals to roam around the industry. NAFTA took away the manufacturing jobs, but the high tech jobs are all still here, and they are concentrated in California mainly because of one piece of legislation: Edwards v. Arthur Andersen.