Wednesday, June 12, 2013

People Develop, Not Places

Latest blog post up at Pacific Standard magazine.

Theme: How place-centrism obscures the economic development benefits of migration.

Subject Article: "The zero-sum trade in people."

Other Links: 1. "Skill Flow: A Fundamental Reconsideration of Skilled-Worker Mobility and Development."
2. "Income per Natural: Measuring Development as if People Mattered More Than Places."
3. "The Problem With Placemaking."
4. "The Heart of Demographic Doom."
5. "Taveras proposes $114M streetcar system for Providence."
6. "Nickerson: Why Providence needs a streetcar system."
8. "Girls on the Move: Adolescent Girls & Migration in the Developing World."
9. "Field Of Dreams Portland."
10. "Pittsburgh, let's wake up and play."

Postscript: The subject article isn't obvious in the post. But consider my writing to be a rejoinder to this paragraph:

We assume that importing countries are attracting labour that they need, and exporting countries are shedding labour that they don't need. Migration of labour from low-wage to high-wage areas is an essential part of the internal devaluation process. For any given job, a worker will wish to receive a high wage, while an employer will wish to pay a low wage. The market-clearing price is somewhere between the two depending on their relative power: where there is a shortage of labour the price will be nearer to the worker's demand, while a glut of labour will enable employers to control the price. (Yes, I know this is a bit simplistic!) Clearly, therefore, the low-wage country has more labour than it needs, and the high-wage country does't have enough. If workers can move from low-wage to high-wage countries, therefore, the supply of labour increases in the high-wage country, putting downwards pressure on labour costs, and decreases in the low-wage country, putting upwards pressure on labour costs. And concurrently, when the cost of moving is lower than the benefit to be gained by relocating in a low-wage country, firms will move into that country. As the demand for labour falls in the high-wage country due to firms relocating, wages fall, and conversely as more firms relocate in low-wage country, wages rise. Eventually the two countries reach equilibrium, wages stabilise, labour stops migrating and firms stop relocating. 

We assume that place matters more than people. Place (i.e. "countries") has agency. A place needs labor. Quite to the contrary, places don't need labor or talent. People need jobs.


Done By Forty said...

It's a bit of a game changer to realize that it's really about people and not places. I have to wonder about the people who aren't particularly mobile though, who have few opportunities to develop, and stay in a place that's in a downward decline.

Is the answer that, developed or not, they should find a way to pick up and move, too?

Jim Russell said...

Education and vocational trainer are the traditional place-centric approaches to development. Attracting migrants is another option.

Most people are risk-averse and won't move. Much better chance of a place dying out than emptying out. The demographic reality is a combination of the two. The main problem is lack of inmigration.

Done By Forty said...

Does the Portland strategy address that problem of inmigration?

Jim Russell said...

Yes, robustly.