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Portland’s Creative Class Slump

by | July 6, 2011 16 SERA General, Urban Design + Planning

Aaron Renn recently reposted on Urbanophile a column he wrote last year for the Oregonian discussing whether or not the hype surrounding Portland is justified (he argues that it is). While it’s unquestionable that Portland has been a trailblazer (no pun intended) in the urban renaissance movement we now see taking root in cities across the country, and serves as the preeminent American example of how good urban planning can translate into real quality of life improvements, what caught my attention about this article was the discussion of Portland’s Achilles’ heel: Our economy.

I can’t help but think that Portland’s struggling economy calls into question Richard Florida’s theory of the creative class city. I read his book years ago, so admittedly it’s not fresh in my mind, but one of his central arguments was that cities that focus on livability would be those to attract the creative class workforce, and consequently be the economic engines of 21st century America. While Portland’s reputation for livability and its creative class ethos has fulfilled the first part of that equation, it hasn’t done much in the way of invigorating our economy. One could assume that it may even be hindering it – noting that the overabundance of overeducated, underemployed, socially-minded citizens here creates a great deal of competition for few jobs and therefore also depresses salaries. (Or, as Portlandia puts it, our city is where young people come to retire.)

Austin, on the other hand (the other oft-cited creative class city), had a strong foothold in the tech industry as early as the mid 90’s, and that combined with being the home of other large employers (state government, a 50,000-student state flagship university) seems to have allowed it to weather the recession fairly well.

I’m no economist, but it seems to me that the Richard Florida strategy of relying upon your reputation for urban livability has proven insufficient in Portland’s case. For whatever reason, our creative citizenry just don’t seem to be creating new export industries. Sure, there is a good deal of import substitution going on here that might be attributed to our creative class interest in starting new food carts/restaurants/coffee shops, etc., but this hasn’t been an adequate economic strategy, as evidenced by a higher than national average unemployment rate. A 2010 report produced by the Oregon Business Council, Portland Business Alliance, Oregon Business Association, Associated Oregon Industries, the Port of Portland, and EcoNorthwest shows that Multnomah County ranks 198th out of 199 Western counties and multi-county areas in private-sector job creation. What’s more, comparing per capita income in the Portland region to other “creative class” regions (Seattle, Denver, and Minneapolis) reveals that we lag 16% to 21% behind these peer regions in terms of average income. While it is not uncommon to point to our relatively low cost of living in response to these somewhat depressed wages, the report notes that the Portland region does not out-perform other creative class regions on “compensating” characteristics such as cost of living or quality of life. In fact, when taken in tandem, our lower cost of living does not offset our lower wages, and consequently it is actually less affordable to live in the Portland region than in Seattle, Denver, or Minneapolis.

The irony (as pointed out in the aforementioned study) is that Portland’s depressed wages may ultimately threaten the very livability we pride ourselves on. Because Oregon is dependent upon income taxes, stagnant wages threaten the funding of schools, universities, parks, and social services. And lower purchasing power makes it difficult for families to make ends meet. There is much speculation as to what strategies to employ to jumpstart job and wage growth in the Portland region (a more business-friendly tax structure, improving high school graduation rates, amping up our state university system, courting large international companies to locate in the region, more support for small businesses), but it is clear that relying on our reputation for livability and resting on our laurels will not do.

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UPDATE

We were pleased to garner a response from Richard Florida on this topic via Twitter…
Richard Florida Response

16 Comments

  1. Great article, Michelle! I have the same opinion of Richard Florida- it’s good to see the holes in his theory so well demonstrated.

    • Thanks, Carolyn. I suppose he got at least the first part right…that creative folks want to live around other creative folks in a fun city. I think the problem is that the creative types who live here are more interested in local ventures (opening new restaurants and bike shops) than in creating new export industries.

  2. Portland has its job creation problems, but exports is not one of them…in fact Portland is one of the biggest exporters in the country, per capita. There’s a good map out there somewhere showing this, but I can’t find that so here’s an article with the same gist:

    http://blogs.wsj.com/economics/2010/07/26/brookings-us-metro-areas-need-exports-push/

    Additionally, Portland had the highest GDP growth per capita of any major city in the country over the last ten years:

    http://www.urbanophile.com/2011/02/24/new-metro-gdp-data-released/

    Perhaps the problem is, we can grow but not fast enough to absorb all the new job openings created by people immigrating to Portland?

    • Thanks, Adam. What this GDP data tells me is that while productivity in the Portland region may be increasing, this has not translated into higher wages or more jobs, for whatever reason. I agree with you that our growing population might be hindering our economic recovery, as we’re seeing stiff competition for few jobs.

  3. To narrow it down to one characteristic – livability – is to oversimplify. And, perhaps, that is where the view fails that livability alone will make a city successful. A city needs both the livability that the “creative class” demands and a concentration of knowledge in a particular industry. Neither stands alone, and neither creates the other. Livability may draw creatives, but it is the concentration of knowledge (and the local, face-to-face networking) that builds an economy. But increasingly, creatives do not want to stay or move to a locale that isn’t interesting, vibrant, and livable. The Baby Boomers may love sprawl and suburbia and never-ending highways, but the generations behind them have grown up in that failed experiment and demand something different. The extremes might be Portland: all livability and no concentration of knowledge, and Detroit: all concentration of knowledge and no livability. A really successful city will balance both.

  4. Interesting article. We had an event recently where Young Creative Entrepreneur finskhed Jack Horner shared his ten tips for creative entrepreneurs:
    http://www.youtube.com/watch?v=7i-pnrfLpCc

    While I understand your view is macro scale, I thought you might find Them of interest

  5. Ethan Seltzer says |

    Careful with the quick conclusions, Michelle. Note that number 199 in the so-called analysis you mention was…drumroll… San Jose and silicon valley. Hmmm… what does that say about any theories of economic development? Probably not much, except be careful with statistics. Also, consider this: comparing Portland with other places as a verdict on the “creative class” ignores the most important and difficult comparison of all, namely Portland with what Portland might have been. This place looks a whole lot better than it did in the early 1980s. Finally, consider that Florida’s definition of the creative class takes in about one third of the entire economy. It makes you wonder just what it measures, and more importantly, what it means to draw conclusions about whether Portland is a good or bad example of his theory.

    • Thanks, Ethan. All very good points. It’s certainly true that Portland has come a long way since the 1980’s, but my concern about comparing Portland against itself as a measure of our economic progress (as opposed to comparing against other cities in the present day) is that we’re looking at entirely different historic and economic contexts, and it’s impossible to isolate whether our progress is due to our own efforts (or reputed livability), or if it is due to the various outside economic forces that have been at work during the 1990’s and 2000’s. It seems to be a bit of an apples and oranges situation. And while it’s true that we might be better off comparatively than we were in the 1980’s, the fact that we compare so poorly today to other regions in terms of wages and overall purchsing power shows that no matter what our progress has been, we are still underperforming economically, which may eventually lessen our city’s allure. Thoughts?

  6. Ryan Kilpatrick says |

    I have to say, it’s not everywhere that a dialogue of this caliber takes place online. As a planner in Michigan looking to the west coast for opportunity AND quality of life, the article here is sobering. However, the debate above is encouraging. The 5-year Economic Development Strategy for the Portland region includes a re-focusing on major industries within the region as a primary strategy for economic growth (i.e. sportswear, green energy, etc. http://pdxeconomicdevelopment.com/). I’d be curious to know if you feel this goes far enough soon enough.

    Thanks for the great blog!

    • Thanks, Ryan. You’re right in that there are some very talented people working very hard in the economic development arena here to address these problems. I’m not familiar enough with the process by which our current economic development strategy (which you point to) was developed, nor do I have enough experience in economic development generally to feel qualified to make any immediate judgements as the quality of the plan (though I find the field fascinating and look forward to learning more). I will say, however, that the cluster approach, which the plan uses as a framework, is very interesting stuff, and I certainly appreciate the manner in which the identified clusters build upon the knowledge and industry base already existing within the region. Whether these are the “right” clusters to be focusing on (or an exhaustive list), I cannot entirely say…

      • A great quote from a recent ULI article:

        “The National Endowment for Science, Technology, and the Arts (NESTA) says it best in a major study on creative clusters and innovation:

        ‘These case studies also show that the mere existence of a creative agglomeration is not enough for the benefits from clustering to emerge. The other crucial ingredient is connectivity between firms within a cluster, with collaborators, business partners, and sources of innovation elsewhere… and finally, with firms in other sectors that can act as clients, and as a source of new and unexpected ideas and knowledge. These layers of connectivity are underpinned by a dense web of informal interactions and networking.’ ”

        Thanks again for the blog!

  7. I’d say the lurking variable is Macroeconomics. Not just the “poor” national economy – that’s a given. I’m really thinking about macroeconomic policy and its effect on Portland’s microeconomy. Yes, we in Texas may be fairing better than the West Coast but we’re selling out to do so. Slashing services and our already meager safety nets to do so, selling out a healthier future for empty calories today, creating a friendly atmosphere for corporations that’s mercurial anyway. Take Amazon for example. They threaten to leave anytime there is a hint of collecting their sales tax. Probably an even better example is in transportation. Texas has invested in even more cars and highways for the future to the point of letting them for’ners build toll roads across the state when even TxDOT couldn’t graft anymore money their way.

    Yes, it’s about Quality of Life and the struggle is for individuals to realize it. But our current macroeconomic policy is dependent on the opposite. Our economic engine runs on our fellow Americans always having a sense of inferiority and a state of fear. Needing to purchase their way to the next better level. And there is a always a next better level. Portland on the whole and quite a few Austinites evolved beyond it but it is hard to be intertwined with massive macroeconomies that run counter and not feel the pressure indirectly. The problem with Portland is there is only one in supply. And there are a lot of folks who make money on the current system who don’t like Portland existing at all. Like “urban design expert” Wendall Cox, who cites Portland as a failure with its “high cost” of living and rent. He fights to keep other cities from becoming like Portland. Interesting because that might increase the supply and affordability of desirable cities that also have smaller consumption appetites for junk and oil…hmmm. In further critiquing our economic policy, I would go as far to say export industries are overly weighted in importance, anyway. All that really matters is net energy consumption. Everything else is relative. That was… no IS the Dream of the 90s!

    Portland is still the standard bearer and Austin is at a crossroads (urban rail vote 2012). Nice blog.

  8. Jeremy Jones says |

    It is quite alluring to look at the world through the lens of statistics. For social scientists like Mr. Florida, it is his stock-and-trade. Seeking the underpinnings of economic growth through data is something like finding a pattern language in architecture. But no one would argue that the significance of a cantilever is the same at Jeld-Wen Field is the same as it is at the Guthrie Theatre. There are markers and traces of economic activity (The Three Ts, for example), just as one can suggest the many contexts that might suit a cantilever. But what is most often obscured from these comparisons are the grace notes.

    It reminds me of a article from GOOD’s Fall 2011 issue in which the author breaks into cold sweats over the misleading nature of “Best Cities for…” indexes that are chum for readers of a few of the click-happiest junk-statsmongers out there (Fortune, Forbes). What comes out these statistics are often ‘winners’ that cause even residents to react incredulously, ‘I have to drive 45 minutes to Nashville to do anything remotely entertaining – what are you people talking about? Have you been here?’ (Paraphrasing, of course.) Flash to Portland and you’ll find a fairly complete community that has well-acknowledged flaws, but nevertheless has a qualifiable level of actual urban content that a dozen high-flyers on the stat charts would bribe their chambers of commerce to make-so, if only it were that easy.

    I’m not suggesting Portland rest on its laurels, but the heightened social capital of Rose City is something of real value. Kind of like chutzpah is to New York, or Axe Body Spray is to the Jersey Shore (I jest!). Preserving this capital is something that may make the economy harder to kickstart, as you suggest. A lot of high-minded and educated individuals competing to keep the region honest may be hindering growth. But when the right formula for urban economic ascent clicks, it will be built on a solid foundation. It may not be easy to see from the inside, but you’ll get there.

  9. This has been a most interesting find for me. I am organizing a conference for May 2012 on creative economies. We issued a call for papers and are setting the schedule right now. I have been to Portland several times and feel inspired and alive each time I visit.

    Remembering how vibrant Portland is I started to look for an organization or a person who might want to present the “case study” of Portland’s success as a creative city. It was very interesting to read the studies and discussion on what constitutes success.

    Our working title for the conference was “This is not Florida”, as a little poke. We are hoping to come out of the conference with policy suggestions, strategies and tactics for Vancouver and British Columbia’s creative economies.

    The website is http://www.sfu.ca/bcreative if any one is interested in attending. (Reg information is coming).

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