The New Geography of Jobs by Enrico Moretti

The New Geography of Jobs

The New Geography of Jobs

Enrico Moretti, a University of California, Berkeley economics professor, in his newest book The New Geography of Jobs defends the argument that how much money you earn may depend more on your location than your qualifications. Moretti discusses the changing face of the American labour market and economy as well as America’s “Great Divergence”, the widening economic gap between cities of innovation and communities driven by the manufacturing industry. Innovation hubs like Raleigh-Durham, Silicon Valley and Seattle, for example, continue to grow and flourish, while manufacturing towns like Flint are shadows of their former selves.

So why is the gap growing? Moretti’s research shows that for each manufacturing job another 1.6 jobs are created in the community. In comparison, a new job in an innovation sector is creating 5 more jobs in the community. At the same time, higher paying jobs in innovation sectors are leading to significant growth in local economies. While it remains true thathaving a college degree correlates to a higher average income than workers without a degree, Moretti’s work also shows that it pays to live close to people with college degrees. In a city where nearly half the workers have college degrees, a worker with only a high school education can earn up to nearly $13,000 more a year than in a city where 15% of workers have college degrees. For every 10% increase in workers with a college degree, the income of workers with a high school diploma increases 7%. Where one lives has begun to dictate how much one will earn.

Geography of Jobs highlights the importance not only of quality of place, but quality of people. It is important that economic developers work to develop a skilled and innovative workforce and ensure that programming and supports are available in their local area to capitalize on the labour force that exists. It’s an interesting read for this reason. Pick up a copy here.