JOB LOSS | U.S. Metro Areas, July 2020

What metro areas are suffering most and least from job loss as of July 2020? 

Most loss: New York State. Three of the five metro areas suffering most from a loss of jobs over the last five years are in New York State. The New York City metro area lost 8.4 percent of its jobs between July 2015 and July 2020.

Least loss: Sunbelt Cities. Low-density sunbelt metro areas have had the least loss of jobs, like Austin, Texas; Phoenix, Arizona; Jacksonville, Florida; Salt Lake City, Utah; and Nashville-Davidson, Tennessee.

Were July Metro Jobs Higher than Five Years Ago? Most Were Lower.
Percent change in employment, 49 metro areas with Census 2010 population of 1 million or more, July 2020, not seasonally adjusted. Ranked by 5-year % change.
Metropolitan area	10 year	5 year	1 year
Rochester, NY	-7.8	-11.2	-13.0
New Orleans-Metairie, LA	-3.4	-11.1	-11.4
Buffalo-Cheektowaga-Niagara Falls, NY	-4.8	-9.0	-10.2
Cleveland-Elyria, OH	-3.6	-8.8	-11.9
New York-Newark-Jersey City, NY-NJ-PA	0.3	-8.4	-13.6
Boston-Cambridge-Nashua, MA-NH NECTA	2.2	-6.9	-12.1
Detroit-Warren-Dearborn, MI	4.5	-6.7	-11.3
Pittsburgh, PA	-3.8	-6.4	-8.8
Milwaukee-Waukesha-West Allis, WI	-0.1	-5.8	-7.7
Providence-Warwick, RI-MA NECTA	0.9	-5.4	-8.2
Hartford-West Hartford-East Hartford, CT NECTA	-0.9	-5.3	-7.2
Chicago-Naperville-Elgin, IL-IN-WI	3.6	-5.0	-8.3
Los Angeles-Long Beach-Anaheim, CA	5.8	-4.0	-10.1
Minneapolis-St. Paul-Bloomington, MN-WI	6.7	-3.7	-8.7
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	0.9	-3.3	-8.6
Baltimore-Columbia-Towson, MD	4.1	-3.2	-6.9
Memphis, TN-MS-AR	3.7	-2.5	-6.0
St. Louis, MO-IL	3.1	-2.4	-5.6
Columbus, OH	11.2	-2.3	-8.8
San Diego-Carlsbad, CA	9.2	-2.3	-9.7
San Francisco-Oakland-Hayward, CA	14.9	-2.2	-11.3
Cincinnati, OH-KY-IN	6.7	-1.8	-6.4
Louisville/Jefferson County, KY-IN	8.3	-1.7	-6.8
Richmond, VA	8.0	-1.6	-6.7
Las Vegas-Henderson-Paradise, NV	12.3	-1.2	-12.6
Houston-The Woodlands-Sugar Land, TX	15.3	-1.0	-6
Birmingham-Hoover, AL	4.4	-0.9	-5.3
Kansas City, MO-KS	8.9	0.1	-4
Oklahoma City, OK	12	0.4	-3.5
Miami-Fort Lauderdale-West Palm Beach, FL	15.2	0.5	-7.6
San Jose-Sunnyvale-Santa Clara, CA	21.4	0.7	-8.2
Sacramento--Roseville--Arden-Arcade, CA	11.7	0.8	-8.9
Portland-Vancouver-Hillsboro, OR-WA	15.3	1.1	-7.8
Seattle-Tacoma-Bellevue, WA	15.7	1.8	-8.2
Raleigh, NC	19	2.9	-8.4
Indianapolis-Carmel-Anderson, IN	15.2	3.0	-3.6
Riverside-San Bernardino-Ontario, CA	22.5	3.9	-9.4
San Antonio-New Braunfels, TX	20.5	4.0	-4.7
Denver-Aurora-Lakewood, CO	21.7	4.1	-5.6
Orlando-Kissimmee-Sanford, FL	21.6	4.2	-8.9
Charlotte-Concord-Gastonia, NC-SC	22.3	4.3	-7.0
Atlanta-Sandy Springs-Roswell, GA	18.8	4.9	-4.8
Tampa-St. Petersburg-Clearwater, FL	20.0	6.1	-4.2
Dallas-Fort Worth-Arlington, TX	24.1	6.6	-4.0
Nashville-Davidson--Murfreesboro--Franklin, TN	28.9	6.9	-6.7
Salt Lake City, UT	23.0	7.2	-3.9
Jacksonville, FL	20.5	8.2	-3.5
Phoenix-Mesa-Scottsdale, AZ	24.4	9.9	-3.5
Austin-Round Rock, TX	37.6	11.4	-4.0

Covid-19 has raised questions about the value of density, although the average wage of workers is linked to population or employment density. This has been tied to skill density, commonly defined as the share of the local population with a college degree. 

The "density is destiny" theory implies that the main effort of government officials seeking prosperity for their communities should be to attract, train and keep skilled workers. 

Agglomeration theory, as outlined by Rosenthal and Strange, encourages the idea that a dense city population means a high level of skills, which encourages work force productivity and higher average wages. This theory is based on the idea that people vote with their feet, as first described by Charles Tiebout in a 1956 article, by moving to places where there are more government-provided goods. These tend to be in certain parts of prosperous cities, with top-rated public schools. The same goes for clusters of local private goods, as demonstrated in a 2006 paper by Joel Waldfogel. Being near good restaurants is worth something, or it was before Covid-19 exploded.

The idea of agglomeration is linked to Adam Smith’s concept of quality skills requiring a critical mass of market size or extent: 

“As it is the power of exchanging that gives occasion to the division of labor, so the extent of this division must always be limited by… the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment… A country carpenter deals in every sort of work that is made of wood…” (Wealth of Nations, I:3)

A city’s size creates demand for high-quality specialized services, and the demand creates the supply of skills that attracts those who care about quality. 

What first determined a city’s size? Adam Smith noted the importance in his time of water transportation. He noted that European cities grew up because they could trade with one another in the sheltered harbor of the Mediterranean. He also noted that:.“[I]n our North American colonies the plantations have constantly followed either the sea-coast or the banks of the navigable rivers,” because water transportation was then the cheapest form of moving goods and people. 

Harvard Professor Edward Glaeser observes that in 1990 the 20 most populous U.S. cities were all on water. As railroads opened up the interior of the United States, railroad terminals became as important as ports. Manufacturing located near the terminals, so that as late as 1950 seven out of the eight largest cities, including New York, were manufacturing centers based on employment concentration relative to the nation. 

With the spread of national highways and car ownership, the railroads diminished in importance. People moved inland to sun and sprawl, to what Glaeser calls “consumption cities” designed for leisurely living. By 1990, manufacturing had decentralized (and shrunk), to the point where six of the eight largest U.S. cities had a lower-than-average share of manufacturing employment. City size is no longer being determined by the cheapness of water transportation, or the importance of railway terminals, or the existence of manufacturing.

All of these ideas will be subject to review as we rethink cities under the shadow of Covid-19. 

Notes
1. Agglomeration: S. S. Rosenthal and W. C. Strange, “Evidence on the Nature and Sources of Agglomeration Economies,” in J.V. Henderson and J.-F. Thisse, eds., Handbook of Urban and Regional Economics, Vol. 4. Amsterdam: Elsevier, 2004, 2119-2172.

2. Vote with Their Feet: Charles Tiebout, “A Pure Theory of Local Expenditures,” The Journal of Political Economy, 64(5) (Oct 1956), 416-424. 

3. Local Private Goods: Joel Waldfogel, Wharton School, Univ. of Pennsylvania, “The Median Voter and the Median Consumer: Local Private Goods and Residential Sorting,” Preliminary Draft, November 22, 2004, 25-26. Types of restaurants indicate nearby clientele.

4. Division of Labor Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. Edwin Cannan, ed. Book 1, Chapter 3, “That the Division of Labor is limited by the Extent of the Market,” para. 1. www.econlib.org/library/Smith/smWN.html,

5. Smith, Book 1, Chapter 3, para. 4. 

6. Remarks to the Manhattan Institute, New York City, January 10, 2006.

TRUMP | "Fitness" for the Presidency

Former Defense Secretary
James Mattis.

September 9, 2020—Today we learned that Donald Trump was described as totally “unfit” to serve as President by Former Defense Secretary James Mattis. 

This label appears in Bob Woodward’s soon-to-be-released book, Rage. Mattis was talking with then-Director of National Intelligence Dan Coats, says  Woodward (https://bit.ly/32f6XVd). 

Mattis resigned his position in late 2018 because of disagreements with the president on defense policies. He told Coats that the President was “dangerous” and “there may come a time when we have to take collective action” against Trump, according to excerpts from the Woodward book reported on by The Washington Post this morning (https://bit.ly/35qM8rV). 

The “collective action” Mattis is referring to is presumably Article 25 of (25th Amendment to) the Constitution, which provides for either (1) a President declaring himself/herself incapable of carrying out his/her duties or (2) those around the President, i.e., the Cabinet, so declaring (https://www.law.cornell.edu/constitution/amendmentxxv).

However, Article 25 was designed for addressing a disability rather than a mental or temperamental disorder. 

What Makes a President Fit or Unfit?

Two key factors make someone fit to be President, apart from general sanity. They are experience (including education) and temperament. 

Going back to the ten presidents before Trump, all had either legislative (four as Senators— Barack Obama, Gerald Ford, Lyndon Johnson, Jack Kennedy—and one as a Representative, George H. W. Bush) or government executive (five Governors: George W. Bush, Bill Clinton, Ronald Reagan, Jimmy Carter, Richard Nixon). 

Trump had neither legislative nor government executive experience. He had some business experience, but one that viewed government as the enemy, an environment with little connection to the constraints of government administration and leadership.

Historically—The Best Presidents

C-Span has an interesting list of qualifications that make for the best presidents. It has an ongoing tabulation of the best ones ever, updated to 2017. In first place, consistently since 2000, is Abraham Lincoln. (If George Washington's presidencies created the nation, Lincoln's preserved it.) 

George Washington and Franklin Delano Roosevelt take the next two spots (they traded places between 2000 and 2009). Theodore Roosevelt comes in fourth. See https://www.c-span.org/presidentsurvey2017/.

George Washington and Lincoln get respect for creating and preserving the United States. But the two Roosevelts had challenges more like the ones we have today. They needed a lead a team to address problems that the private marketplace was facing to address.

Franklin Delano Roosevelt

FDR in particular inherited a country that was in a deep Depression, with bank failures panicking depositors and unemployment at 25 percent. It required political savvy and administrative skill to steer the country through that era and then through a World War.

FDR was well prepared to take on these challenges because he had both the experience and the temperament to do so. He had two terms as Governor of New York State, during which time he led the country in innovative responses to the Depression.

He gained important experience operating in Washington from his eight years as Assistant Secretary of the Navy under President Wilson. He was appointed by the Secretary of the Navy, Josephus Daniels, who had been editor of the Raleigh News & Observer. He learned to work with members of Congress. He helped reorganize the Navy Department. He mastered the facts of the Navy Department and stuck to them at Congressional hearings. He learned to work with his party in Washington and in New York.

When the United States went to war with Germany on April 6, 1917, FDR got a taste of wartime decision-making. He presided over a four-fold increase in the Navy's strength in six months, involving the building of new ships and stockpiling of supplies.

Donald Trump did not have anything like this kind of preparation for his presidency.