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The Challenge of the Creative Class – A Follow Up

by | April 3, 2013 5 SERA General, Urban Design + Planning

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).

park nap

“hipsters in hipster park” (1)

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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Photo Credits:
Banner Image - SERA stock image with "Jason Straatmann Actor Japan Suit..."
by satomodel via Flickr
1. "hipsters in hipster park" by Smilygrl via Flickr

5 Comments

  1. Robert Bierma says |

    “The study concludes that the key to regional economic growth is to attract and retain employers who offer higher-wage jobs” I agree with retain, but there is growing evidence to show it is far form effective to create rather then attract employers. Portland’s been heading in that direction with things like helping fund business incubators, and the early results look fairly promising. In my opinion Portland should double down on strategy. It is not even close to taping out this economic development strategy to where it would be getting diminishing returns.

    • Michelle Marx says |

      Yes, local economic development groups seem to be increasingly focusing on supporting promising emerging businesses. Currently, the Portland Development Commission is sponsoring the Startup PDX Challenge, wherein the agency is awarding $10,000 in a working capital grant and free rent for one year to as many as six startup compainies with promising business plans in an effort to help promising compainies expand their businesses. The application perioed ended just yesterday, and over 200 companies applied.

  2. Nigel Fenton says |

    This is a great article that’s very relevant right now. I’m glad I read it but I have to admit I’m sad to find out Look Over is now a ‘hipster park’.

    When I first moved to Portland it was at the beginning of the Great Recession but I was hopeful of the cities future when I learned that creative cities tend to bounce back quicker from recessions. However, now that things seem to be turning around it seems as though our recovery is slower than I imagined it would be. A recent article from the London School of Economics states that innovations in business technology is helping to spur growth in businesses. So based on that I have to agree with your statement that degrees in technology, engineering, math and business will be a valuable in the future economic growth of Portland. Although I am excited to see what comes out of Intel, and have been saving my pennies for what’s coming this summer from them, Portlanders can’t hold their breath and hope that they save the day. In regards to the Produce Row startup competition that Michelle referred to in the previous comment, that area of SE Portland is full of creative types that produce crafts and products unique to Portland. I would argue that it would be more imperative to not only attract business savvy individuals but to marry them with the creative types prevalent in the city and to focus on developing community in the area and further develop a stronger sense of place in the (and maybe access to the river).
    Although our recovery is a bit slower than other cities in the nation I believe that our unique creativity in Portland will help to produce a vibrant and sustainable economy in the future.

  3. Great thought process – It seems to me that the myriad of small, unique businesses or craft-based brands in Portland is enough for people who are able to create a unique idea based on their own creativity, wherever that may lie. In many ways it is clearly still working for the city in regards to attracting people and so forth, despite the rankings referenced in the article. On the other hand, I know I am one of many overeducated + underemployed (OEUE?) individuals in this city despairing over funding options and waiting for a small “cool” company to have the perfect opening in the meantime. Getting the job these days means being ahead of 300 applicants, which is clearly not how it used to be, especially with a higher degree. I’m extremely place-based; I would rather live here and struggle than somewhere else, perhaps, for many reasons… I suggest reading Brew to Bikes by Dr. Heying for the positive site of this dichotomous situation. Though, I wonder if there is a critical view on Portland’s paradox as well?

  4. Nate Burton says |

    I guess it doesn’t worry me that Portland isn’t an economic powerhouse with the most competitive wages around. I’d like to think it has a lot to do with the idea that in Portland, we prefer passion over profit. That the vision of a local and sustainable economy is not necessarily built on continual growth and high wages for those who are fortunate enough to gain education and opportunity. I wonder if a fierce localism that tends to make communities so much richer overall will be the means by which more people can enjoy the great life of Portland, even if at a more modest level across the board. Perhaps we tend toward a slightly different definition of economic prosperity?

    Along these lines, I’ve seen a happiness index for different countries, but now wondering if some data exists to compare cities; might be an interesting aspect of this conversation. Great post!

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