Patt Morrison for June 28, 2012

The 'New Geography of Jobs' and the great divergence

Houghton Mifflin Harcourt

According to author Enrico Moretti, the root of inequality in America today isn’t the divide between the 1 percent and the 99 percent but the gap between those who have college educations and those who don’t. With the decline of manufacturing and the rise of the information economy many believed that geography wouldn’t play as large a role in determining local economies. But in his new book, “The New Geography of Jobs” Moretti makes a case that geography does matter, and that people living in cities with a high percentage of college graduates on average are paid more whether or not they have a college degree.

Moretti writes that the high concentration of college graduates in these areas pushes overall wages higher, and for every high tech job created five more are created in the service sector. These higher wages and additional jobs generate a positive feedback loop, spurring the growth of innovation hubs while cities reliant on more traditional manufacturing jobs stagnate.

Moretti calls the growing chasm between those with college degrees and the rest of the country “The Great Divergence” and posits that it is starting have more widespread effects on things like cultural identity, politics and public health.

WEIGH IN:

Does a rising economic tide lift all boats, or does localized tech innovation get a city’s economy moving faster?

Guest:

Enrico Moretti, professor at UC Berkeley, author of “The New Geography of Jobs”


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