The Challenge of the Creative Class – A Follow Up

In 2011, we wrote about Portland’s Creative Class slump, noting that, despite being generally regarded as one of the country’s preeminent “creative class” cities, Portland has failed to translate its reputation for livability into real economic gains. Given the city’s persistent struggles with unemployment, underemployment, and low wages (despite attracting artists, designers, intellectuals, hipsters, and other creative types from across the country), we questioned the validity of Richard Florida’s “creative class city” – for which Florida posits that those cities with the best quality of life will be those that attract the creative class workforce, and will consequently be the economic powerhouses of 21st Century America.

It seems that we weren’t the only ones noticing this paradox. A new study – commissioned by The Value of Jobs Coalition and conducted by ECONorthwest – notes that the Portland metro region has in fact suffered a decline in per capita income since the 1990’s relative to other U.S. metropolitan areas, and examines some of the data behind this trend.

The study finds that it is Portland’s college-educated workers that are driving this trend (Oregonian article for reference). Per capita, Portlanders earn 5 percent less than the national metropolitan average, while college-educated workers in Portland earn a full 10 percent less than workers in other cities. The study concludes that this trend is due in part to the types of college majors chosen by Portland workers. Although the Portland area has an above average share of the population with college degrees, the study notes that, compared to other metropolitan areas, Portland has a higher proportion of college educated workers with majors in the humanities and social sciences that lead to lower paying jobs and fewer college-educated workers with degrees and careers in higher paying fields such as business and finance.

That it is increasingly difficult to find a well-paying job with a degree in the arts and humanities is apparent to anybody living in Portland. Most folks living here don’t need hard data to tell us that a large proportion of our young, highly-educated population is underpaid, underemployed, patching together various part-time jobs, and/or living in mom’s basement or with several roommates to make it all work. A study on “Best Places for Young Adults” released last week by the Business Journals ranks Portland number 46 behind cities like Omaha, El Paso, Albany, and Harrisburg, Penn in terms of employment and earnings prospects for young adults (evaluating categories such as employment growth, per capita income, unemployment rate, and median rent).

It would seem that, given its appeal to those attracted to the bohemian lifestyle, Portland is a concentrated microcosm of the difficulties that liberal arts graduates face in today’s economy [warning: strong language]. While higher education should certainly be valued for its own intrinsic value and for the social good that results from having an educated citizenry, as a society we may need to accept that, until we address the cost of higher education and the current system requiring those seeking university degrees to self-finance through loans that indenture themselves to future careers, the decision regarding what course of study or career path to pursue may be subject to more cost / benefit analysis than in the past. (Note: This is certainly not intended to disparage the arts and humanities…my own undergraduate degree is in English and French).

So what does all this mean for urban planners and policy makers? As the study notes, regional economic development cannot be based on urban “place-making” alone. Just as a college degree in itself no longer guarantees a well-paying job, attracting a college-educated workforce is not enough to create regional economic vitality. The study concludes that the key to regional economic growth is to attract and retain employers who offer higher-wage jobs, and increase the number of workers (in part through education policy) with degrees in science, technology, engineering, math, and business.

It is important to note, however, that Portland’s economic woes are not entirely attributable to our tendency to choose lower-paying majors and careers. For every major and occupation studied (including those in higher paying fields such as business, technology, law, and finance), Portland workers earn less than workers in that same field in other metropolitan areas. Ultimately “differences in majors, occupations and education beyond college can explain about 15 percent of the income differences between Portland-metro and other regions.” While increasing the availability of high wage jobs and workers with degrees in high paying fields will help to address part of the income disparities we see between Portland and other cities, questions remain regarding why college educated workers in any field and with any major earn less than their counterparts elsewhere. Not only do the vitality of our income-tax-funded infrastructure and social services depend upon rectifying this income gap, but our region faces the potential of fewer college-educated workers choosing to sacrifice earning potential to live here in the future.

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1. "hipsters in hipster park" by Smilygrl via Flickr