Cities Offer Less Opportunity to the Less Educated

Emily Badger and Quoctrung Bui at NYT:

[C]ities no longer offer low-skilled workers the economic advantages they once did, according to new analysis by the M.I.T. economist David Autor.

Workers, whether with a college degree or not, could long count on earning more in denser urban areas than in rural ones. Today, that pattern holds for highly educated workers — and has in fact grown much stronger. For workers without any college education, the added wage benefits of dense cities have mostly disappeared in Mr. Autor’s data:

What’s startling about that conclusion is that many economists and policymakers have suggested that workers migrate to prosperous metros to find opportunity. We don’t have many proven strategies for how to revive communities battered by changes in the economy. But we have decades of history that show that Americans have been able to lift themselves up by leaving struggling places for thriving cities.

What happens if that’s no longer true for low-skilled workers?

“People have lamented, ‘Well, all these areas that lost manufacturing, why don’t those workers just get up and go somewhere else?’” said Mr. Autor, who looked at wage data from the census and American Community Survey and recently presented the findings at the annual meeting of the American Economic Association. “It’s just not at all obvious what that place is. It’s less obvious to me now than it was a month ago.”

Mr. Autor attributes the declining urban wage premium in this chart to the disappearance of “middle-skill jobs” in production but also in clerical, administrative and sales work. Many of these jobs have gone overseas. Others have been automated out of existence.