Pharos-Tribune

Community News Network

July 11, 2014

College graduates are sorting themselves into elite cities

WASHINGTON — Census data suggests that in 1980 a college graduate could expect to earn about 38 percent more than a worker with only a high-school diploma. Since then, the difference in their wages has only widened as our economy has shifted to bestow greater and greater rewards on the well-educated. By 1990, that number was about 57 percent. By 2011: 73 percent.

These figures, though, reflect only part of the inequality that has pushed the lives of college and high school graduates in America farther apart. As the returns to education have increased, according to Stanford economist Rebecca Diamond, the geographic segregation of the most educated workers has, too - and not by neighborhood, but by entire city.

This effectively means that college graduates in America aren't simply gaining access to higher wages. They're gaining access to high-cost cities like New York or San Francisco that offer so much more than good jobs: more restaurants, better schools, less crime, even cleaner air.

"With wage inequality, you could just observe the average wage of a college graduate and the average wage of a high school graduate," says Diamond, whose research has gone a step further to calculate what she calls "economic well-being inequality." "But then on top of that, college graduates also live in the nicest cities in the country. They're getting more benefits, even net of fact that they're paying higher housing costs."

It's easy to recognize this phenomenon in San Francisco, or even Washington, D.C. College graduates have flooded in, drawn by both jobs and amenities. Yet more amenities have followed to cater to them (luring yet more college graduates). Housing costs have increased as a result, pushing low-wage and low-skilled workers out. At the neighborhood level, this cycle sounds a lot like how we describe gentrification. At the scale of entire cities - picture low-skilled workers increasingly excluded from Washington and San Francisco and segregated into cities like Toledo or Baton Rouge - Diamond describes this as a kind of nationwide gentrification effect.

She is not just talking about outlier cities here.

"New York, San Francisco, Boston - those places are the ones that get the most press because they're the biggest cities and they have the most extreme changes at this time, but it's everywhere: Philadelphia, Baltimore, Chicago, Atlanta," she says. "It's an across-the-board phenomenon."

Between 1980 and 2000, cities that already had a lot of college graduates increasingly became magnets for more of them. A city like Boston historically had an advantage on this front, but its advantage has only grown stronger with time.

The larger the share of a city's workforce that's made up of college graduates, the more expensive it is to live there. By Diamond's calculation, for every 1 percent increase in a city's ratio of college graduates to non-graduates, the city experiences a 0.6 percent increase in rents:

Census doesn't have good comparable data to make these calculations prior to 1980. But other evidence suggests that the cost of living has come to vary dramatically across the country in ways that weren't historically true. The median rent in metropolitan Washington, in other words, wasn't always twice the median rent in Louisville. In the past, Diamond says, higher-wage cities attracted more workers, driving up the supply of labor and driving down the high wages that drew them to those cities in the first place, counteracting some of the inequality we see today.

So what's changed over the last several decades? Obviously, industry has. Good-paying jobs that didn't require a college degree have been vanishing. Cities like Boston, meanwhile, have shifted their labor demand away from such jobs and toward college grads who now work in industries like biotechnology or medicine. Detroit, once a mecca of a good manufacturing jobs, has had a harder time with that same transition.

Now, not surprisingly, those cities with a higher share of college grads yield higher wages for them, too. Diamond found that a 1 percent increase in a city's college employment ratio corresponded with a 0.3 percent increase in wages for college graduates:

A higher share of college graduates also yielded higher wages for workers without college degrees, likely because employers have to pay them more to keep them in higher-cost cities.

Sure, the San Francisco tech worker has to spend a larger share of his income on rent than a low-skilled worker in Oklahoma City. But all of the added amenities of living in San Francisco outweigh that higher cost. It's not that high school graduates don't also value restaurants, cleaner air and less crime - but they may not be able to afford to live where those amenities exist. They're more likely to make decisions about where to live based on affordability. College graduates, on the other hand, have the luxury of picking a city with amenities in mind.

This also comes at the expense of other cities that may lose their college grads. What happens to Toledo and Baton Rouge without them?

 

1
Text Only | Photo Reprints
Community News Network
  • The Simpsons still going strong

    The groundbreaking animation first hit the air Dec. 17, 1989, but the family first appeared on television in "The Tracey Ullman Show" short "Good Night" on April 19, 1987.

    August 21, 2014

  • Police chief resigns over racial slur repost to Facebook

    A repost on his personal Facebook page of a racially-charged comment by the original poster of a comedy video has forced the police chief of an Oklahoma city to resign his office.

    August 21, 2014

  • Does Twitter need a censor?

    Twitter decided last year to make images more prominent on its site. Now, the social network is finding itself caught between being an open forum and patrolling for inappropriate content.

    August 21, 2014

  • sleepchart.jpg America’s sleep-deprived cities

    Americans might run on sleep, but those living in the country's largest cities don't appear to run on much.

    August 20, 2014 1 Photo

  • Who should pay for your kids ACT?

    Thirteen states paid for 11th-grade students in all public high schools to take the ACT college admission test this year, with several more planning to join them in 2015.

    August 20, 2014

  • Pets.jpg Why do people look like their pets?

    As much as we might quibble over the virtues and vices of Canis domesticus, however, and over whether human nature is any better or worse than dog nature, even dog fanciers don't usually want to look like a dog.

    August 20, 2014 1 Photo

  • Ice bucket challenge trending up

    Internet trends are a dime a dozen these days. Everything from Tebowing to planking to the cinnamon challenge can cause a wave of social media activity that can last for weeks before fizzling out.

    August 19, 2014

  • Africa goes medieval in its fight against Ebola

    As the Ebola epidemic claims new victims at an ever-increasing rate, African governments in Sierra Leone, Guinea and Liberia have instituted a "cordon sanitaire," deploying troops to forcibly isolate the inhabitants in an area containing most of the cases.

    August 18, 2014

  • Democrat? Republican? There's an app for that

    If you're a Republican, you might want to think twice before buying Lipton Iced Tea, and forget about Starbucks coffee. If you're a Democrat, put down that Reese's Peanut Butter Cup, and throw away the cylinder of Quaker Oats in your pantry.

    August 18, 2014

  • Five myths about presidential vacations

    In the nuclear age, presidents may have only minutes to make a decision that could affect the entire world. They don't so much leave the White House as they take a miniature version of it with them wherever they go.

    August 15, 2014

Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Poll

Does Indiana need a statewide water management plan and an administrator to implement it?

Yes
No
Unsure
     View Results
Featured Ads
AP Video
Furry Roommates: Dorms Allowing Cats and Dogs Chase Rice Defends Bro-Country 'Jersey Shore Massacre' Pokes Fun at MTV Series Raw: Wash. Mudslides Close Roads, Trap Motorists DC's Godfather of Go-Go Honored Ukraine Calls Russian Convoy a 'direct Invasion' Girl Meets Her 'one in the World' Match Coal Gas Boom in China Holds Climate Risks Japan Landslide Rescuers Struggle in Heavy Rain Raw: Severe Floods, Fire Wrecks Indiana Homes Endangered Red Wolves Face Uncertain Future Raw: Russian Aid Convoy Arrives in Ukraine Okla. Policeman Accused of Sex Assaults on Duty Dominican Republic Bans Miley Cyrus Concert Raw: Israeli Air Strike in Gaza Raw: Bodies of MH17 Victims Arrive in Malaysia Attorney: Utah Eatery Had Other Chemical Burn
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.