It’s long been presumed that people will move to places where there are jobs. But is that changing? In a post-pandemic world, will we see a shift to jobs moving to where people are?
Marcella Butler, chief people officer at AppHarverst.
On the future of work post-COVID
Rana Foroohar: “We are now seeing a real sea change post-COVID. And I think that opportunity is going to be following the flow of people. As you know, I wrote a column for the F.T. last week on the idea that we're seeing a new kind of place-based economics. There used to be this sort of conventional wisdom in economic circles that, Hey, just create jobs at a national level or even an international level and the playing field will just equalize. It's all good.
"But if there's anything that the last 20 years, 10 years, the year since the pandemic, wherever you want to put the marker, has shown us is ... that's not really true. And that, yes, as the economy evolves, there's opportunity, but it's not always equally distributed. Geographically, there’s big places, not only in the U.S., but in many countries that have been hollowed out. And other places that have perhaps too much. And I think that we're about to see some redistribution geographically, and from capital to labor.”
On intergenerational economic mobility
Rana Foroohar: “I was quoting from some interesting 2014 studies by Raj Chetty and others. It's both intergenerational mobility, but they're talking about how it's linked to place. So, you know, again, this is kind of common sense to a lot of people. We kind of have a sense that, Hey, maybe a kid that's born in Palo Alto might have different opportunities than someone born in West Virginia. But believe it or not, that's news to economists, at least in terms of the way that they model things.
"But what this 2014 study showed is there's really a big difference. You know, if you take apples for apples a child in San Jose, versus Ohio or Kentucky, that there really is a limit to their mobility, their socioeconomic mobility, for all kinds of reasons. Because of a lack of opportunity, because of a lack of social capital that comes with a lack of opportunity. I mean, this is all part of that kind of larger breakdown, you know, hillbilly eulogy kind of breakdown of whole communities as economic opportunities disappear. So that's why thinking about place and how to really create more wealth in place ... that's becoming really important.”
On people who relocated because of the pandemic
Rana Foroohar: “White collar workers … many have moved back home, moved to the country, get more space. This is a double-edged sword, which I think is important to realize. So on the one hand, you've got these kind of Zoom towns that are starting to boom. You know, sometimes they're even little villages outside of big expensive areas like Boston, or New York or Washington, where maybe people would have once gone for a weekend and stayed in a nice Airbnb. Now they're renting a farmhouse and thinking, Hey, I might settle down here and pay a third of the housing prices.
"Now, this is also mid-to-longer term. This is going to be interesting to see whether or not some of those white collar jobs start to globalize, because the other thing that will happen is just as companies realized over the last 40 years, Hey, we can outsource blue collar labor to places where labor is a tenth of the price of the U.S. A lot of companies, my own being one of them, are thinking about, Hey, we can actually hire more talented people in places like India, parts of Latin America, that cost a lot less than in the U.S. or Europe.
"So it's going to be interesting to see how it all plays out. But there will also be, I think, in this transition, more of a blending of blue collar and white collar work. Because one of the things I think that's going to support this geographic redistribution of wealth is the fact that we're entering this new period of internet innovation. Where it's not so much about the consumer internet and your iPhone. I mean, you know, that's great. But it's about how businesses are using the internet.
"So you're seeing, for example, businesses, like I'm speaking later on Wednesday to a CEO of a trucking platform in Chattanooga. Chattanooga is historically a trucking hub for the U.S. because it's smack dab in the middle of the country. Well, now this company is developing a platform. So it's becoming a kind of a business-to-business Amazon for the trucking industry. I think you're going to see a lot more of that happening. Where an area that might have had an old economy, talent, or innovation or skill set is going to be able to start now, particularly with this Biden broadband infrastructure build, to be able to transition that a little bit more easily into the digital economy.”
What is the role of the federal government in this shift that you're seeing towards place-based economic development?
Rana Foroohar: “I'm a big fan of the government as an aggregator of information, as a connector, as a measurer. I mean, I would love to see almost sort of like a data czar that could start to really tell us, OK, where are jobs in the high growth industries? Where do the patents live? Where are the factories that have X amount of production, you know, who can retool to do what in higher growth industries, start to kind of develop that 360 picture.
"But then what I don't want to see is a really, really heavy handed, overreaching national policy that has a one-size-fits-all solution, because as we've talked about for this whole hour, that really doesn't work. You need to give communities enough flexibility to kind of do what works at a local level. But I think starting to connect job creators and educators, I would love to see. And this is where I actually differ from the Biden administration a little on educational policy.
"Rather than a revamp of community colleges or making two years free. I'd love to see them just revamp secondary school. Basically put two more years of education into the secondary system, connect those secondary high schools with job creators locally. This is already being done in 20 different states. There's lots of different programs. These things could be made national at a best-practice level."
Both Republican and Democratic administrations of the near past love to do things like opportunity zones. Are you not a fan of those?
Rana Foroohar: ”Yeah, not a huge fan of those, because I think that they can become boondoggles. And that's the sort of thing where at a national level, you're drilling down and telling a community what to do. Sometimes you're incentivizing the wrong things. You know, I like the idea of just as we're hearing more about the government investing in basic research, and starting to say, we want to have a Green New Deal as a moonshot.
"You look historically when big periods of sustainable growth happens, it tends to be when the federal government says, We believe in the internet, we believe in railroads, we're going to kind of put a floor under some important new technological development. Obviously clean energy today. Hello! Like everybody is doing this. And we're going to help companies and communities out that want to develop in that area in their own way. I think that that's what we need to do.”
From The Reading List
Financial Times: "There’s no place like home — and the labour market needs to adjust" — "Conventional economic thinking tells us that people go where the jobs are. In America, there is a long history of westward expansion in search of opportunity."
WESA: "Pittsburgh's 4 Big Nonprofits Contribute $115 Million Over 5 Years To Peduto's OnePGH Initiative" — "Mayor Bill Peduto announced Thursday that he had secured $115 million in contributions from Pittsburgh’s four largest nonprofits for his long-awaited OnePGH initiative."
Wall Street Journal: "How Remote Work Is Reshaping America’s Urban Geography" — "A year ago, just before the start of pandemic lockdowns, some 10% or less of the U.S. labor force worked remotely full-time. Within a month, according to Gallup and other surveys, around half of American workers were at distant desktops."
CNBC: "Vast migration of over 14 million Americans coming due to rise in remote work, study shows" — "A whopping 14 million to 23 million Americans are planning to relocate to a new U.S. city or region due in part to the growing acceptance of remote work, according to Upwork’s Remote Workers on the Move report released Thursday."
Pittsburgh Tribune-Review: "Pittsburgh's economic development leaders launch 'Next is Now' campaign" — "As part of the contingent that worked on the 2017 proposal to land an Amazon headquarters, Stefani Pashman saw that the Pittsburgh region lacked a cohesive marketing plan."
This program aired on May 4, 2021.