Author: Emily Badger / Source: New York Times
In the end, even Amazon has behaved according to this rule: In the modern tech economy, cities that already have wealth, opportunity, highly educated workers and high salaries will just keep attracting more of them.
Of all its options across North America, the company appears to have narrowed its sights to New York and suburban Washington for a huge expansion of high-paying tech jobs. The 11th-hour decision to split its “second headquarters,” as Amazon is expected to announce shortly, makes the pattern only more glaring.
A small number of rich and internationally connected cities keep increasing their economic advantages — and as a result, the inequality widens between them and everywhere else.
Because of the pull of “superstar” cities, economists and policymakers fear what will happen elsewhere if the winners keep winning while many smaller communities are left behind. It’s possible Amazon executives genuinely believed a year ago that they might find a more surprising home (many observers are not so charitable). But, ultimately, the superstar magnet pulls them, too.
“It’s just absolutely hard-wired into technology economies,” said Mark Muro, a senior fellow at the Brookings Institution. “It’s not just a sort of interesting thing that happens — it’s inherent to the technology.”
Tech companies feed on highly educated and specialized workers, specifically dense clusters of them where workers and companies interacting with one another are more likely to produce new ideas. Washington and New York, as it turns out, are two of the most highly educated regions in the country, with already large pools of tech workers.
“In that sense, we look naïve in even raising the question that this could have gone to a different kind of Midwestern, heartland place,” Mr. Muro said. “There wasn’t really an alternative.”
By choosing to go where high-skilled workers and other prosperous companies already are, Amazon will effectively ensure that more companies follow it in turn. Opportunity will concentrate further. The differences between, say, New York and Scranton, Pa., will widen. This divergence, underway for about 30 years, has accelerated since the Great Recession.
Between 2010 and 2017, according to Brookings, nearly half of the country’s total employment growth occurred in just 20 large metro areas (places that are home to about a third of the population). The Washington and New York regions alone accounted for about half of the net increase in business establishments across the country between 2007 and 2016, according to the Economic Innovation Group, which tracks economic inequality across the country.
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