Friday, April 20, 2012

Talent Gluts And Global Cities

New York is a great city. It's arguably the greatest city in the world. But many myths persist, misleading many aspiring metros. Like San Francisco, NYC is a domestic migration loser. "Successful cities" are often tops in brain drain. Ironically (in view of the exodus), New York is also king of the talent glut:

In the pilot, Hannah was fired from her intern job after she tried to ask for a salary. Why stay in New York then? Besides, Hannah’s goal, as a self-described memoirist, is to pen a book, which she can do anywhere.

The housing crisis that has plagued the country in recent years might have dampened labor mobility because people cannot sell their homes, but college graduates, with no such burdens, can and should move to where jobs can be found.

On the show, Hannah is seeking a writing position. There are about one million Hannahs wanting the same thing in New York City, which is why firms can afford to not pay for writing talent. It’s a simple story of supply and demand.

The show is HBO's "Girls". The review is more of a lecture about geographic mobility and labor markets. New York attracts much more talent that its job creation can absorb. Why do people keep moving there? Reputation. Geographic stereotypes drive migration. New York gets to pick the cream of the cream of the talent crop.

The only thing more impressive than New York's talent gravity is its outmigration. A great deal of sloppy seconds from NYC and DC ends up in Pittsburgh, a critical nexus of Northeastern talent trade. The proof is a talent glut in Southwestern PA. That's a result of too little outmigration. The difference is that in New York, the talent glut spurs innovation. In Pittsburgh, the glut informs parochial attitudes that have stifled job creation. Not all negative net migrations are created equal.


Matthew Hall said...

How can we know when talent gluts spur innovation and when they don't?

Jim Russell said...

How can we know when talent gluts spur innovation and when they don't?

In theory, talent gluts caused by substantial inmigration will spur innovation. Talent gluts caused by too little outmigration will stifle innovation.

The links between innovation and migration are well documented. The same goes for geographic immobility and poverty. There is a positive correlation.

Lots of fools rush into places such as Portland, Austin, New York, and DC. Just a fraction of these migrants make it work. That dynamic works wonders for a city's innovation capacity.

Tom Mc said...

Mr. Russell - How does one encourage out migration in an area such as Pittsburgh? There was a large out migration in the 1980's. Which in turn left a dearth of demand or goods and homes. This is still the case, where housing is cheap.

In my case, I came from NJ/NYC in 1998. Went from $1500/month to $475/month rent. Beers were $5.25/pint vs $2.5-3 per pint. Parking in midtown $50/day vs $5-12/day. Cost of living has not changed much here since 1998. I went from scrapping by to holy S*&^ I am saving money and my life style has not changed much.

Thanks for blogging!!

Jim Russell said...

More inmigration and subsequent gentrification will displace native residents. I figure that return migration is already a substantial part of the talent glut that depresses wages regionally.