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How Can Cities Survive?

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How Can Cities Survive?

10 Blocks podcast September 23, 2021
Cities
Covid-19

Edward L. Glaeser joins Brian Anderson to discuss how cities can overcome Covid, remote work, crime, and misgovernance. Glaeser’s new book, Survival of the City: Living and Thriving in an Age of Isolation, is out now.

Audio Transcript

Brian Anderson: Welcome back to the 10 Blocks Podcast. This is Brian Anderson, the editor of City Journal. Joining me on today's show is Edward Glaeser. Ed is perhaps the leading urban economist in the world, and he's the Fred and Eleanor Glimp professor of economics at Harvard. He's a senior fellow at the Manhattan Institute and a long time contributing editor at City Journal. He's the author of the book, Triumph of the City, which was a best seller some years ago. And he has a brand new book out, co-authored with David Cutler, called Survival of the City: Living and Thriving in an Age of Isolation. So Ed, great to have you on the show and thanks very much for joining us.

Edward L. Glaeser: It's wonderful to be back on with you, Brian. Thank you so much for having me on.

Brian Anderson: You noted in an article in the summer 2020 issue of City Journal, that plagues have been a perennial threat to urban life, but you expressed skepticism that this plague would permanently reshape urban America. There was lots of talk early on in the pandemic, as I'm sure you recall, about the mass exodus from cities. And we certainly saw a bit of that here in the New York area, but judging at least from rental markets in New York and San Francisco, demand seems at least to have stabilized and in some areas has bounced back. But even if COVID and the pandemic doesn't spell the end of city life, it has certainly, I think you would agree, change things.

So you refer in this new book to the rapid fire deurbanization of our world. And it's true that some have left permanently for the suburbs. Meantime, the pandemic, not to mention the civil unrest that we saw in New York and other cities last summer, cast a harsh light, I'd say, in problems with the way our cities are currently governed. So here's a broad question to get us started. What's your long term prognosis for the future of the American city? And what approach does this new book take to tackling some of these big questions?

Edward L. Glaeser: I think the reason why we really need to pay attention to the future of the city right now is that the pandemic, the rise of remote working, have collided with understandable progressive desires to take from the rich and to make cities more equitable. We've played through this script before. In the 1970s we had this collision of the dreams of mayors like John Lindsay in New York or Jerome Cavanagh in Detroit who very much wanted to use the power of city government to write every existing social wrong.

And that collided with highways, suburbanization, the rise of container ships, the movement of industry outside of cities like New York into places that were much more business friendly. And it led New York to the very edge of bankruptcy. It is not that city life is itself at risk. Human beings are going to want to connect with each other, but every city is more vulnerable than ever. And if we are going to deal with the real issues that have brought cities apart before 2020, we need to do so in a way that is smarter, but not punitive. We need to make sure that our education system is more effective and we need to make sure that our police systems continue to protect going forward.

Brian Anderson: Now you've done a lot of research on the agglomeration effects of cities, is something you've written about for City Journal. It was a key emphasis of your earlier book, the Triumph of the City. Yet, as people have been working remotely over the last year, year and a half now, productivity hasn't completely collapsed. So, what's your take on that? What's going on there?

Edward L. Glaeser: So the book has a lot. One of the chapters is on will we ever go back to the office? I think there is no question that some form of hybrid work will be part of the future for most people. And I, for one, certainly hope that I can skip a couple of those eight hour round trip business trips to just take a one hour meeting in Chicago or somewhere else. But I think for many people, for most people, they're going to be working live, not remotely. And here's why I think the evidence points that way. Over the past seven years, we've had evidence on call center workers. Nick Bloom, a terrific Stanford economist, did the first major paper which involved a randomized controlled trial. Netanya Emmanuel and Emma Harrington, our former graduate students, did work using a major American retailer. And they found remarkably similar results, which is that in the short run when you send the workers home, they are just as good at taking their calls as if they're in the office.

Their rates don't go down. They sometimes actually increase. This is a simple task and it's perfectly feasible to do this from home. But both studies find the same thing about long run promotion rates for the workers. In both cases they go substantially down. In the Emmanuel and Harrington paper, they drop by 50%. Now, what does it mean to get promoted as a call center worker? Well, you get given the more difficult calls. You get given the pain and the whatever from Toledo who's calling in. Now, how would you learn how to handle the difficult calls? You learn by being around other people. You learn by hearing how they do it. How would your boss, your manager learn that you're good at doing those things? Well, your manager needs to listen to you, needs to see your manner when dealing with people.

So these are things which happen when it's live, but are much more difficult to accomplish when things are remote. This is really compatible with a view that face to face contact and cities are places where we get smart by being surrounded by a maelstrom of economic activity. We've also seen this very much in the new hires data. So some work of Carlos Tabouine and Jose Roman [inaudible 00:06:18] looked at the burning Glass Technologies agglomerator of online postings. And they separate things out for those jobs that are being done remotely and those jobs that can't be done remotely. What they find is that during the early days of the pandemic, employment and postings both collapse for the jobs that had to be done live, but they came back, both came back. By contrast, the employment for the remotable jobs stayed rock steady.

However, new postings collapsed and they stayed significantly down until April 2021. Microsoft tells us that its programmers have been perfectly productive at home, but new hires for programmers were down over 40 percent between February 2020 and November 2020. Really a significant drop. And new research for Microsoft shows that their teams are much less likely to create new relationships during this new online world, they're much less likely to connect with other parts of the company, which leads them to fear a breakdown in creativity. So I think the right view is that for many jobs you can do them in the short run. You can coast on existing relationships, but it's much harder to learn new tasks. It's much harder to do new things remotely, especially when it's complicated. The work on online education is really straightforward on this.

Even under ideal conditions, randomized control trials find that online education for younger people is close to useless in many cases. And so it's really hard for me to believe that this online educations could replace face to face working. It's also true that it was always a very elite thing. If you look at May 2020, which was the acme of Americans working remotely, 68.9 percent of Americans with advanced degrees were working remotely. Whereas only 5 percent of Americans who were high school dropouts were working remotely. 15 percent of Americans who had a high-school degree were working remotely. So if you imagine a world in which everyone's going to be remote, you're imagining a world which is even more unequal than the world that we had in 2019. And my last point, and this is how we tell the story in the book, is in 1980, Alvin Toffler, the futurist, wrote The Third Wave, a huge bestseller, in which he claimed that all this new technologies would enable us to work in electronic cottages and lead to forests of empty skyscrapers.

For 40 years, despite the fact that those technologies existed, he was completely and totally wrong. And in fact, cities and office markets got hotter because what these new technologies did was they radically increased the returns to being smart. They radically increased returns to innovation and cities are where that happens. So I think we are very far from a world in which face to face contact is going to be a thing of the past. And I think for most of us, we're going to be working live.

Brian Anderson: One of the themes of Survival of the City is the housing market. You note in the book that the housing markets become a major obstacle to mobility in America. Big cities, big successful cities like New York, the Bay Area, they've erected barriers to building new housing. And so lots of people are getting priced out of those markets, but while high cost cities have lost population during the pandemic, cheaper mid-size cities from Austin and Nashville to Charlotte and Chattanooga, a city we look at in our next issue of City Journal, they've seen pretty significant gains. So remote workers were drawn to the quality of life in these environments and obviously the low costs. I'm wondering, do you view this as a good thing or are there worries that these cities too could follow the patterns we've seen in San Francisco and New York and erect barriers to housing affordability?

Edward L. Glaeser: It's something I worry about. Absolutely. So the way we focus on this in the book is we try to put the rise of housing-market regulation, the rise of unaffordability, and we tell this story in the background of the battle over Boyle Heights for gentrification in Los Angeles, in which you have these urban hipsters who are trying to gentrify this longtime Latino community. And the point that we make is that while these groups battle each other unmercifully, the real villains are the suburban homeowners who are opposed to any form of new regulation. The real villains are the regulators. The real villains are these owners. The real villains, they are those who actually make it impossible for outsiders to find space in our cities. We see this as part of a larger story, which is very related to the work of Mancur Olson 40 years ago, again, The Rise and Decline of Nations in which he argued that stable societies get taken over by insiders who figure out how to work the rules in order to make sure they get to keep theirs and outsiders have to pay the price.

In Reagan's America I didn't believe that captured Americans. I very much believe that it's much more of an accurate depiction of America today. And as you know, I've written about this in City Journal. This really plays out very strongly in housing markets where metropolitan area after metropolitan area, groups of connected homeowners have figured out how to rig the system so that they get to keep their view, they get to avoid the inconvenience of having any building on any neighboring spots. And so America has had a revolution in property rights in which we've gone from a place in which the basic fallback was that people had a right to build to a world in which the basic fallback is that every neighbor gets to say no to every project. And that's a world that's very, very difficult in terms of adapting to change.

New York stayed affordable in the 1920s when it built 100,000 units a year. It sure as heck isn't affordable now. And we see the same sort of insider outsider drama showing up in the underperformance of American schools, for example, where insiders like the teachers unions tend to protect their well entrenched workers. During Covid, the California teachers' union not only took the stance that workers shouldn't be required to show up live, it took the stance that a fairly obscure California law said they shouldn't be required to teach over Zoom either. So really there was nothing that was required of them according to the teacher's union. Now, in terms of the spread of the regulatory barriers, I think the basic thing of Americans having an exit off option in places like Houston or Dallas or Atlanta, where they can actually find a functioning local economy that makes it easy to build, that's been great.

But you're certainly right, as people, particularly highly skilled people, move into cities like Austin, Texas, one of the things they figure out how to do is to stop new construction. And so in some sense, California exports its anti-growth ways to Texas in this. And that is certainly something that I worry about. Luckily there still are a lot of places to build in the US, but every time a productive place makes it difficult to erect new housing, they're making it impossible for less well educated Americans, less wealthy Americans to find space in those cities.

Brian Anderson: Now the backdrop to this new book is of course the Covid-19 pandemic and its effect on close living in cities. You and Professor Cutler, though, tackle a number of other problems that cities face, including housing: you call them the demons that accompany density. So not just plagues and housing affordability, but crime, poor education, which you just mentioned, inequality. All of these can make raising a family in a city like New York a tough proposition for a lot of people, especially if you're not wealthy. So how much of this is just endemic to living in cities? How much of it is just a consequence of density and how much is really a result of bad governance?

Edward L. Glaeser: That's a great question. So there are things which are natural with density. So for example, the story that we start the book of with is the plague of Athens, which strikes that great center for the Mediterranean world in the fifth century. And it really is a fairly devastating event, killing perhaps a quarter of the city's population in a couple of years, tottering it off its perch atop the system of cities, turning it perhaps from the New York City of the Mediterranean world to first perhaps the Boston and then perhaps the Cambridge mass of Mediterranean world. So it really is fairly devastating. And that's really function of the fact that cities are the nodes on our global lattice of trade and travel, so they're the place where diseases enter first, and of course the high levels of density of cities enable the diseases to spread once they're there.

But for many of these downsides to the density, there are things that can really be substantially mitigated with good government as indeed disease can. In some sense, the great arc of government in the nineteenth century was that for the first time in history, governments stopped being solely agents of death, which is pretty much what governments did prior to 1800. And then in the nineteenth century, cities like New York, and this is really the third chapter of the book, we tell about how the city of New York figured out how to up its governmental game primarily to fight plague, building aqueducts, building sewers and it does this despite the fact that it doesn't understand the medicine. It actually believes that the reason why these things will help is they believe in the miasma theory where the vapors were coming out of the air and infect people.

These are contagious diseases, they're not drawn by my miasma, but it turns out that, perhaps fortuitously, that building sewers, building aqueducts was a great way to fight cholera and it really was effective, but it required huge amounts of money and really functional local government. So local governments really can reduce these things. And in some sense, the travails of the last 20 years, the fact that New York feels so much more divided over the last five years than it did, let's say, in the years before 9/11, when really I was completely confident in the city's ability to weather that terrible terrorist attack, because it felt like the pragmatic consensus that had emerged after the crisis of the 1970s still was so strong. For much of the last 10 years, that consensus feels like it's come unraveled because people fear that the city's opportunity doesn't spread to poor people because our schools are often doing a particularly poor job with low income parents, because there's unhappiness with our policing, because there's unhappiness with housing prices, with affordability, and many of these, like the case of affordability, that's a self-inflicted wound.

Governments need to just get out of the way for a new building to enable the private sector to heal that. In the case of schools and policing, we know that those reforms can occur. In fact, New York showed how you can have a miracle in terms of reforming schooling between 1990 and 2010, where the city got massively safer, partially because of more effective policing. Now, if we want policing that shows everyone more respect, which I think is a reasonable thing to ask, we can ask our police to do that and we just need to put the management tools in place to make that happen. We need to actually create good measures of whatever it is we want the police force to do because without those measures it's not going to happen. And when it comes to schools, for sure, our urban schools are underperforming. The Opportunity Atlas data, compiled by my colleague Raj Chetty and others, clearly shows that opportunity soars right at the edge of big city school districts.

And that's not endemic to all cities. No Englishman ever thought they had to leave London to get a better school, no Frenchman ever thought they needed to leave Paris to get a better school, but Americans believe that they need to go to the suburbs to get a better education. That's something that's going to be harder to fix. I've been on the sidelines of the education reform movement for the last 20 years and it's hard to think that this is easy to fix. We do a little bit of dissecting of some of the very top down national initiatives and how they failed. I think reforming schools is always likely to be a local effort and it's hard to be all that helpful. If we wanted to do something nationally, and I think we should, we need to do something basically bypasses the existing school administrations.

The idea that we push in this book is having wraparound programs like vocational training that takes place after school, on weekends, on the summer that's competitively sourced, totally free in terms of which entities can provide it. It could be community colleges. It could be trade unions. It could be for-profit companies. It could be community colleges. And then you have pay for performance. You actually know whether or not someone's learned to be a programmer or a plumber by the time that they're done and so you can only pay if the kid learned something, but we need to do things that reflect the fact that we need to experiment and that our attempts to improve this particular branch of government over the past 20 years have really shown how difficult that is.

Brian Anderson: That's a good bridge to the final question I'd like to ask you, Ed, it's really a political question. And you talk about the conflict between insiders and outsiders. You can understand the political consequences of this with homeowners, I guess, because homeowners want to protect the value of their homes, but when you look at something like schooling, the median voter in a city like New York or any city is going to want good schools. They don't want bad schools. The median voter in Baltimore wants their streets to be safe. So why do these really tragic problems persist generation after generation?

Edward L. Glaeser: It is really remarkable. So the school issue just has felt so intractable. And obviously you have very entrenched insiders in schools, you have the teachers unions and they're there for the long haul. Voters are there on elections, but it's hard to generate sustained interest. In the case of the teachers, part of the problem is that you have essentially teachers on both sides of the bargaining table. So powerful public sector unions also elect the mayors who then bargain with powerful public sector unions or appoint people who bargain with powerful public-sector unions. So it's easy to see why that's difficult, but I want to make it clear, the last thing I'm trying to do is vilify teachers, I think particularly during Covid our city schools have been fill of teachers who have behaved absolutely heroically.

But I think in many cases, the organization feels that it's its obligation to protect every teacher against getting fired, to protect its power against change, to create things that are very stacked towards older teachers at the expense of younger teachers, think about the way that pensions are set up. There's this beautiful piece of work by a scholar who looked at the willingness to pay of Illinois teachers to top up their pensions and the young ones were basically not willing to pay anything for extra pension dollars. And yet pensions are how our teachers are paid. They're paid very generously with pensions and very little with upfront salary. That comes out of unfortunate negotiations between the teachers unions and the governments. In this case, I blame the governments because you can actually pass us off to your voters the cost of pensions as being long in the future and hard to understand, whereas salaries are very visible.

So they pay people with pensions and that actually stacks the deck against recruiting young, talented workers. So I think, in fact, just that the way the establishment is rigged makes that very, very difficult. In the case of cops, it's also difficult in Baltimore. New York, however, proves how you really can make changes very, very quickly. It really wasn't that long between 1991 and 2001 where crime had really gone down. It does require more spending and that's part of Baltimore's problem, that they have a budget problem. You also always have attention, which is how differential are the police going to be to people in the community. And if you're trying to prevent crime, your tendency may be not to be all that differential and that certainly creates this tension between the two groups.

So I think these things are in fact very hard to work, but the divisions that have come about in our cities make us weaker. One of the great lessons of history is that the impact of natural disasters are always mediated by the strength of civil society at the time when they hit. A plague can strike New York in 1830 and a city remains strong because the institutions are solid. A plague hits Constantinople in 541 and we get centuries of chaos because the city and its attempt to reconquer Italy sits on the edge of a knife. And so our whole urban world felt more vulnerable because it was so much more divided.

And so going forward, I think people need to take a more sustained willingness to care out the basic guts of city government. It really is in the management. It is really in the details and we can't just hope that we're going to flick a policy lever and all of a sudden Baltimore's going to get safe, or all of our urban schools are going to get fixed. We have to have the humility to learn, and we need to recognize that city building takes a long time. It took decades to get to the Croton Aqueduct but we need to start now.

Brian Anderson: Great, thanks very much, Ed Glaeser. The book is called Survival of the City. It is out now. You can get it anywhere where books are sold. You can check out Ed Glaeser's work on the City Journal website, where he has been writing for many years. We'll link to his author page in the description. You can also find City Journal on Twitter, @CityJournal and on Instagram, @cityjournal_mi. As usual, if you like what you've heard on today's podcast, please give us ratings on iTunes. And Ed, always great to talk with you. Thanks.

Edward L. Glaeser: Great to talk to you, Brian.

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