Cities, Transportation and Labor Market Mobility

As regular readers of this blog know, I believe that cities are the engines of progress. I am bigly into urbanization. I am delighted that Russ Roberts has interviewed urbanist Alain Bertaud of NYU on EconTalk.

I loved listening to that podcast. (I highly recommend Russ’s pocasts.) I am looking forward to reading Bertaud’s book “Order Without Design: How markets shape cities”.

An excerpt from the book by Alain Bertaud below the fold.

During a recent visit to the Tenement Museum in New York, a docent told us that in the 1850s, immigrants who were “fresh off the boat” would typically stay only a few months in a tenement; they would then keep moving as their employment and financial circumstances changed. A typical length of stay in the same tenement would be about 6–8 months. My wife and I then looked at each other, remembering that this was exactly what we did when—in January 1968—we were also “fresh off the boat” in New York. We changed apartments three times in 30 months. We moved from a flophouse on the Upper East Side that was soon going to be demolished, to a studio apartment in an “old law tenement” on the Upper East Side, and then to an entire floor in a townhouse in Brooklyn Heights. I also changed job three times. Each time, I changed for a more interesting job and a higher salary. This is the type of mobility that we will discuss in this chapter: the ability to move from job to job and from dwelling to dwelling made possible by a transport infrastructure that gives access to millions of potential jobs in less than 1 hour of commuting time.

This mobility was made possible by a buoyant housing and job market, ensuring a low transaction cost of changing jobs and location. By contrast, in Paris (where we came from), housing mobility was hampered by 2-year leases that could not be broken without penalties. Additionally, job mobility was frowned on as a sign of instability—changing jobs three times in 30 months would have resulted in a resume that raised a lot of eyebrows.

When—after just 6 months with my first employer in New York—I found a job that was a better fit with my long-term interests, I was terribly embarrassed by the prospect of telling my employer that I was quitting. My colleagues at work reassured me that this was done all the time in New York, and that a higher salary was a very honorable reason to change jobs. Indeed, my employer gave me a good luck party when I quit!

This is mobility. A flexible labor market, an open housing market—the flophouse with its low standards but very low rent was essential to getting us started—and a transport system that is fast, affordable, and extensive enough to allow individuals to look for jobs in an entire metropolitan area rather than just in limited locations.

Here are two facts that I fascinating. Fact #1: New York City — the Big Apple — is one of the greatest cities of the world ever. The grid plan for NYC, known as the Commissioners’ Plan, was adopted in 1811. The streets and avenues were planned for. Meaning they laid out the city, and appropriated the land for public access roads, parks and other facilities for the huge city that it is today even though in 1811 it was only 1/20th in size (and perhaps 1/50th in population.) That’s serious thinking ahead. That’s what distinguishes the successful — their imagination and insight.

Fact #2: The gridiron pattern of NYC is more than 200 years old. But the idea is much, much older. Wiki says,

Gridirons can be found in the Old and New Kingdoms of Ancient Egypt, and in Mohenjo-daro in the Indus Valley in 2154 BCE with a population of 40,000 people, where many historians claim it was invented, and from where it may have spread to Ancient Greece.

Forget inventing something, retards can’t even adopt a good idea that has been around for millennia. Indian cities are examples of bad urban planning.

Author: Atanu Dey


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