While democracy melts down, I'm going to be spending the next few days being very academic - 4 conferences in 3 cities in 5 days. (All on different topics!) One of them is about regional divergence, and I'm still thinking about this piece 1/ nytimes.com/2019/09/27/bus…
So I'm playing with a hypothesis, which is that "offsiteing" — not offshoring, which is moving stuff abroad, but just moving it to lower-cost locations in the US — may actually be contributing to divergence 2/
Sketch of a model: imagine that production requires two kinds of workers, Nerds and Clerks. Nerds benefit from the spillovers that come from being near each other, be it Silicon Valley or Wall Street. Clerks don't. But in the past they had to be located together 3/
This limited concentration of firms in big metropolitan centers, because firms choosing to locate there had to pay both Nerds and Clerks higher wages to compensate for higher land prices and hence cost of living 4/
Now develop technology that lets Clerks work remotely. This lets firms move their jobs to lower-cost locations. But it also frees them to move Nerds to high-cost locations, because they can get the spillovers without having to increase Clerk wages 5/
Assuming Nerds have more education and higher wages, the result is growing regional disparities in both education and incomes. And I'm pretty sure that land prices in big centers might actually go up even though it's easier to move some stuff away 6/
Gonna try to do some proper algebra on this when I get a chance. But this does seem like an alternative/supplement to stories about the growing importance of the knowledge economy.
OK, emotional vacation from the dire state of politics is now over 7/
OK, emotional vacation from the dire state of politics is now over 7/
