CityLab co-founder and editor Richard Florida presents the findings of his recent study, done in collaboration with Martin Prosperity Institute (MPI) colleagues Roger Martin, Melissa Pogue, and Charlotta Mellander, which reveals where creative talent and innovation cluster throughout the country and how this creates income inequality in specific metros. He focuses on four occupational and industrial categories: creative occupations in traded industries, creative occupations in local industries, routine occupations in traded industries, and routine occupations in local industries.
Traded industries compete on innovation and creativity, so the study showed that 46% of workers in those industries are in creative jobs, as opposed to 35% in local industries. Creative jobs in traded industries tend to concentrate on the East and West Coasts, with the leading centers in San Jose and San Francisco. The East and West Coast creative trade industry regions also have highest wages, on average, even though they employ the smallest share of workers.
Troublingly, our research finds a rather close connection between creative-in-traded employment and inequality. In other words, the higher the share of creative-in-traded employment in a metro, the more unequal it is. This divide is magnified by housing costs, which are higher in more knowledge-based metros. To get at this, we ran correlations between the share of creative-in-traded workers and both overall wages and those left over after paying for housing for each group. All four categories of workers have higher wages in more creative-in-traded metros. But, when we take housing costs into account, we find distinct winners and losers in these more advanced, knowledge-based metros.
Continue reading for an in-depth analysis of the study's findings.