I can’t help but think that Portland’s struggling economy calls into question Richard Florida’s theory of the creative class city. I read his book years ago, so admittedly it’s not fresh in my mind, but one of his central arguments was that cities that focus on livability would be those to attract the creative class workforce, and consequently be the economic engines of 21st century America. While Portland’s reputation for livability and its creative class ethos has fulfilled the first part of that equation, it hasn’t done much in the way of invigorating our economy. One could assume that it may even be hindering it – noting that the overabundance of overeducated, underemployed, socially-minded citizens here creates a great deal of competition for few jobs and therefore also depresses salaries. (Or, as Portlandia puts it, our city is where young people come to retire.)
Portland is the poster child for indicators run amok. Amassing talent is the game and the goal. What comes next after your city goes viral?
Understanding relocation choices for a niche demographic doesn't make you an economic development guru. Modelling migration isn't difficult. The patterns of moving still follow some basic rules articulated over a century ago. Fetish destinations come and go. What will become of Portland?
About a month ago, I was still bullish on Portland. Now, I'm not so sure. Starting with the glass-half-full perspective, a story about Denver and the upside of a big company leaving town:
Doug Dwyre, president of Denver- based Mocapay, is a former First Data employee who chose not to relocate to Atlanta. He eventually joined Mocapay, which integrates mobile transaction software and marketing into merchants' long-term business strategies. In May, it launched a mobile-payment system with Denver-based coffee merchant Dazbog.Dwyre said there was a direct correlation between First Data leaving and the upswing in mobile-payment companies in the state. Mocapay had 14 employees last year; it has 20 this year."It's unfortunate that First Data left Colorado, but it's good as far as fostering the entrepreneurial spirit of the folks who ended up staying in Denver," he said.
If you wanted to stay in Denver, then you had to think like an immigrant. I'll get back to the Colorado dividend in a bit. A glut of talent, for whatever reason, should spark more entrepreneurial activity. I figured that a major economic spillover from all that in-migration was just a matter of time in Portland.
I based that conclusion on my Boulder experience. Smart people flocked there en masse. Graduates from the University of Colorado hung around a few years to ski and rock climb in Eldorado Canyon. Boulder was (still is) rich in natural and human made amenities that make the community sticky.
I failed to appreciate that the regional economy was ready to absorb all that talent. Boulder is blessed with a major research university and a bunch of federal government laboratories. By comparison, the Portland boom is unsustainable. What is Portland going to do with all this excess Creative Class?
No doubt that Denver has benefited from a quality of place. Instead of moving to Atlanta, ex-employees ran through brick walls to stay. In theory, that's how catering to the Creative Class should help your city or rural community.
Then there is Pittsburgh ...
These days, "Pennsylvania is no longer part of the Rust Belt. Pennsylvania has diversified away from that manufacturing belt," said James Diffley, chief regional economist with IHS Global Insight in Eddystone."The diversification of Pennsylvania kept it from being another Ohio and Michigan," he said. Michigan's unemployment rate peaked at 14.1 percent.
"Diversification" has been the name of the Pittsburgh revitalization game. As for the good news in PA, it is more Pittsburgh than Philadelphia:
Forty-six of 50 metros experienced declines in job openings in June, 14 more than the previous month. The four metro areas that did not lose job openings saw insubstantial growth: Louisville (1.7 percent), Birmingham (1.4 percent), Detroit and Pittsburgh (less than one percent).
Pittsburgh is an island in a sea of economic gloom and doom, despite disregarding Richard Florida's advice. Yes, Pittsburgh is the anti-Portland. Pittsburgh is the antithesis of the Creative Class migration. Yet the Great Reset has favored Pittsburgh over Portland.