But regional offices perform more and more of the sophisticated work usually associated with Wall Street and nearby trading hubs like Jersey City and Stamford. This parallels a shift in some technology jobs away from Silicon Valley to Portland, Ore., and cities in Texas, said Michael Shires, a professor at the School of Public Policy at Pepperdine, who prepares an annual ranking of the best cities for employment.
“I expect to see an acceleration,” he said, noting that while these middle-tier jobs may lack the salaries and glamour usually associated with Wall Street, “these are the support people that actually make the stuff work.” What’s more, there are many more positions in the middle of the jobs pyramid at Wall Street firms than at the top.
Deutsche Bank’s office in Jacksonville started out in 2008 as a back-office service center, according to bank officials. Since then, technology workers, legal and compliance staff members, and trading support jobs have been added. More recently, some traders who deal directly with clients are being located there. Lower costs and taxes are behind the moves, the officials said.
Stars can maintain their prestigious zip codes. The rest of the workforce will have to make do with Salt Lake City and a much smaller salary. The world is getting flatter.
Back in March, I blogged about the same trend of near-shoring non-legal work for law firms from Washington, DC to Nashville, TN and Wheeling, WV. Last summer, I covered "small market migration." Talent is finding its way down urban hierarchy in a number of sectors. The Innovation Economy has begun its decline.
2 comments:
I'm a fan of this blog, an economic development planner working in Milwaukee, and I am frequently interested in the articles you publish. I have to admit though, there are times when your overarching philosophy is a bit unclear. I was reading this article and nodding along until I reached your concluding statement "The Innovation Economy has begun its decline" Huh? The article focused on the diffusion of knowledge sector employment from traditional centers without the sense that this diffusion was a result of some "decline" but rather cost centric decision making.
Have you written a paper or book on the "it" that underpins your worldview? Perhaps there is an article in particular that resembles a manifesto?
Mr. Irving,
No book, yet. I use this blog to work out ideas. This post is half-baked. I had a few more paragraphs to write, but ran out of time.
I recently read "The New Geography of Jobs." Moretti takes the long view on the economy. He discusses the rise and fall of both agriculture and manufacturing. His book is about the rise of the Innovation or Knowledge Economy. Agglomeration characterizes the rise. Diffusion characterizes the fall.
Agglomeration can occur as long as location trumps cost. Thus, we get the great divergence that Moretti maps. Innovators and innovation companies cram into a few cities, creating a "thick" labor market. The rich get richer. The poor get poorer. Wealth is a function of geography.
At some point, cost matters more than geography. The first step is a cheaper location (e.g. manufacturing jobs moving from the North to the South). Next up, efficiency gains: Less head count, greater output.
I see the near-shoring of finance as the first step of decline. The long period of agglomeration has ended. The world is flat.
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