Portland’s Creative Class Slump
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.