Today, Tomorrow, and COVID-19 – A Conversation Today, Tomorrow, and COVID-19 – A Conversation

Runtime: 23:44 — This season of Six Hundred Atlantic focuses on growing regional gaps in variables such as income or health – trends that are decades in the making. Now, they’re being shaped by the global COVID-19 pandemic. Are cities in trouble? Are rural areas poised for a rebound? Urbanist Richard Florida and economist Edward Glaeser join Six Hundred Atlantic for a conversation about our post-pandemic future.

Overview Overview

The debut season of Six Hundred Atlantic looks at widening “geographic disparities,” which are regional gaps in variables like income and mortality rates. These trends are decades in the making, but the ongoing global pandemic has certainly impacted them.

Six Hundred Atlantic wanted some perspective on this, so we invited University of Toronto urbanist Richard Florida and Harvard economist Ed Glaeser to join us for a conversation.

In this bonus episode, Florida and Glaeser discuss whether the city is in trouble in an age of social distancing, consider the future of work, and talk about whether struggling rural areas are gaining new appeal during a pandemic.

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Transcript Transcript

In this season of 600 Atlantic, our podcast here at the Boston Fed, we've focused on widening geographic disparities in this country. These are simply the growing gaps between different regions in variables like income, educational attainment, mortality rates. These trends are decades in the making, but the ongoing global pandemic is certainly impacting them, just like it's impacting different areas of the country in different ways.

We wanted to talk to some leading scholars about this, so we've invited them. I am the host, Jay Lindsay, and we'd like to welcome Richard Florida. He's an author, urbanist, and a professor at the University of Toronto. His most recent book is ‘The New Urban Crisis’. I'm also joined by Ed Glaeser. He is an urban economist at Harvard, and he is the author of ‘Triumph of the City’.

I'd like to start out, I guess, with a question about de-urbanization. De-urbanization is certainly a hot topic during the pandemic because of social distancing requirements. It kind of conflicts with the basic nature of city life, and people talk about how they may not feel safe with basic city amenities, subways or features like crowded sidewalks. So, the question, I guess, is: Is the city in trouble right now because of this pandemic? Will people migrate away from cities?

Okay. Well, as a consumer of Ed's work, I think I could say that the city will continue to triumph, although it will be challenged. I think that what this pandemic really is doing is not really disrupting urbanization. In fact, over a three-decade career as an urbanist, I unfortunately wasn't very much aware of the role of pandemics in the process of urbanization, so they couldn't have made that much of a dent if it doesn't come up all that much.

But what it's likely to do is accelerate two trends that have been acting on cities for a long time. One, I think, for folks who have kids, families with children and also older and more vulnerable people, I think for sure they're going to be pulled away from dense city centers. They're going to be fearful of transit, rightly or wrongly, and they're going to head to the burbs or the rural areas.

But I think for young people, the people who have driven the urban revival, really driven the urban revival of U.S. cities over the past 20 or 30 years, I think they're going to continue to head to cities. I'll just say one last thing before ... I really want to hear from Ed. I think that U.S. cities are unique, somewhat unique. I don't want to say completely unique in this.

Sitting up here in Toronto, there is very little of this happening, and when I talk to friends in Paris or in London, there is less of a concern for the migration of lots of people out of cities. So, I think there are particular issues, idiosyncratic issues, with regard to U.S. cities, which make them less hospitable for families, harder to raise kids, harder to deal with schools, they may or may not be more violent, that make the U.S. a little bit more unique in the amount of people who might get pulled out of cities.

I agree completely with what Richard said. Let me just add a little bit. I think that if you look back on the broad 2400-year history of cities and pandemics, going back to the Plague of Athens in 430 B.C., you really have to go back a millennium before you find plagues that have deeply, deeply troubled the path of urbanization. So, it has happened. I think a reasonable view is the Plague of Justinian, which struck Constantinople in 541 of the Common Era, really derailed that Emperor's attempt to reimpose the Pax Romana on the Mediterranean world, and led to a poorer rural Europe for almost 800 years.

But pretty much since the 14th century, urbanization proceeded despite the reappearance of the Black Death in the 1350s. Urbanization proceeded despite the Great Plague of London in the 1660s. All of the great diseases that spread in 19th-century America, cholera, yellow fever, the urbanization just chugged along. Even the influenza pandemic of 1919-1920 was followed by a tremendous decade of city building. So, I think our cities have proven to be remarkably resilient. They will change. It is quite possible that the next five years, particularly, as Richard said, in the U.S., will be a tough one for many cities. But they will not be followed by massive deurbanization.

Now, I will put one coda on this which is, it is possible, given what we've seen of the U.S. over the past four months, that we will screw up the future so badly that there will, in fact, be a darker possibility. That possibility occurs if, for example, this pandemic lasts for three and four years, if we have another pandemic within the next decade, if we don't take the steps we need to to actually deal with the future and make sure that this basically never happens again. Then all of the advantages of urban proximity that so far are currently a source of pleasure, become a source of peril.

But that possibility is so dire, not just for cities but for every one of the 32 million American workers who currently labor in leisure, hospitality, and retail trade, that I cannot believe that our policymakers will screw things up so badly that this thing, this horror story of the past … months, becomes a reoccurring event.

One thing you had mentioned, Ed, is policy. You know, we can't screw up the way that we have. I'm curious from both of you, what do you mean by that? Can you be specific? What has gone wrong here, and what needs to happen to sort of prevent what has been happening with our cities, and with policy during this virus?

Why doesn't Ed go first? Ed, why don't you go?

Okay. I'm going to say something, but I'm actually going to be relatively reticent on this. Which is, it seems pretty clear that the U.S., as Richard had said, has not handled this well. We spend significantly more than any other country does on healthcare, about $11,000.00 per capita. The next highest is Switzerland, but then you come to Germany and the Nordic countries. But, of course, the pandemic experience of those countries looks nothing like ours. We are really unique among wealthy countries in the way that this thing has played its way out.

I am not a public health expert. I'm not going to opine on exactly what should have gone in different ways. It does seem clear that the push to reopen our cities very quickly seems to have been, at least in hindsight, a significant mistake. Or, at the very least, the reopening should have been accompanied by major league warnings about the threat involving proximity. But I think this is best left for doctors and epidemiologists.

I mean, the one thing that I will say is it does seem clear that America did not take steps before the crisis to preemptively invest in the kind of tools that would have been helpful, be it personal protective equipment stockpiles or extra ventilators. Or I think, even more pressingly, preemptive vaccination research so we would have had vaccines that were ready to go into Phase 3 testing immediately when this thing rolled out, in the sense that we knew that they were safe ‘ex ante’.

I hope that, going forward, we will recognize that spending tens of billions of dollars to engage in whatever is the appropriate medical investment to make sure that this is a thing that never happens again, we will consider tens of billions of dollars of protective investment to be a cheap price to pay to avoid the cost of trillions that this pandemic is currently causing to the world.

Just a couple of things to build on what Ed says, and from the perspective of being in Toronto. I mean, it is a completely different world. The fact that Toronto has, basically, almost completely eradicated the virus, and life has a semblance of normalcy here that is quite shocking to me. And I think there's a couple of reasons for it. I don't think it's just policy, per se. I find this fascinating. Canadian healthcare policy is decentralized. It's not a national policy. It is run by the provinces, as is public health policy. So, we've had a provincial policy, not a national policy, although the federal government says some nice things and provides some additional funding.

Canadians just listen to public health authorities more, and Toronto is a very multicultural city. It's probably the most diverse, in terms of ethnicity and country of origin, of any in North America. But people just pay attention and listen, and take advice, and are more empathetic towards one another. So, I think there is both the public policy dimension to this, and there's kind of a cultural ... I don't know the right word for that. Maybe Ed will have a better word for that. There's this kind of social/cultural dimension, or personal dimension, that Americans just seem to want to get on with life and want to reopen and want to go about their business, where Canadians are a little bit more careful.

I think that's played a big role, just looking at the difference between the U.S. and Canada. I'll just end by saying that the U.S. in many ways, for someone like Ed or I or you all who have health insurance, has a terrific health system. It's not like the Canadian system. I mean, if you need to make an appointment for an MRI, it might take a long time to get that appointment, or some kind of surgery. But the system does work better in the context of public health and with much less expenditure, as I said, than the U.S. system, and I think it's not just public policy. I think there's something in the cultural environment, and the norms and mores of places, that affect this.

Thanks for that. I want to shift gears a little bit and talk a little bit about work, because remote work has just become a part of life for so many Americans as a result of this pandemic. I know, Ed, you've done some work on this, showing that it's likely to continue at relatively higher levels post-pandemic. I guess what I'm wondering is, is this pandemic changing the nature of work, and is that changing the nature of cities in any way, since people are such an important part, the workforce is such an important part of cities?

We did two surveys of the Alignable Small Business Network, and the National Association of Business Economists, and in both surveys we asked, "What share of workers who switched to remote work during COVID-19 will continue working remotely after COVID-19?

In the Alignable survey, about 17% of the firm said 80-100%. Another 24% said between 40-80%. In the NABE survey, 13% said 80-100%, and then another 23% said 40-80%. So, those are pretty big numbers. Those suggest that, of the share that have switched to remote work ... and that's a non-trivial number. You know, 40% of firms say that 40% of workers who have switched to remote will stay remote.

Okay. So, that's a big shock, but let's think for a second about what that means, even if we accept that they were able to forecast correctly. They might not have, but that means that some significant number of workers are going to want to be moved away. But we have markets for urban real estate, and we have developers who manage buildings who want to keep those buildings occupied. And so, what happens is they start adjusting, and the most important way that they start adjusting is by cutting prices.

I would be shocked if, a year after the pandemic ends, we won't have urban office buildings in downtown Boston that are just as full as they were six months before the pandemic began. Now, that doesn't mean they're going to be the same price. I would certainly expect the price to be a little bit lower. That doesn't mean they're going to be the same demographic category. I would expect to see somewhat younger workers, somewhat younger firms. I think the advantages of density and proximity are most valuable, as I have learned from Richard, for the most creative workers, for younger workers, for workers who need to be inspired and emotionally connected to each other.

All of that's going to cause the city to change a little bit, but not necessarily in ways that are bad, right? I was certainly hoping that Boston was going to become more affordable before COVID-19 hit, and it probably will, and that's not necessarily a bad thing. Some more routine occupations will be sent to work remotely. Maybe some creative types who currently labor in San Francisco will dial it in from offices in high amenity cities in the American west, like Boulder or Vail. But again, it's sort of part of the natural evolution of the city, not any sort of wholesale challenge to the appeal of density as a place of creative work.

Again, a couple of things just to build on what Ed said. I actually think this is a nice opportunity for cities to remake themselves, something that cities have done very well in the past. I think part of it will be this opportunity for cities to become more affordable for younger people, for artistic and cultural creatives, or for service workers. Although I will add the caveat that I had hoped that would be the case in 2001 and again in 2008, and in both cases it may have happened in the short term, but the cities became very expensive.

What I think is even more possible, urbanists and city planners, urban planning types, have been talking about something called the 15-Minute Neighborhood for a long time. A 15-Minute Neighborhood means a place where you work, you take your kids to school, you live, you go out and you buy groceries, all within a 15-minute radius of your home. Which sounded like a pipe dream for most of my life. You know, people were commuting very long distances.

It could be the case that if there is less demand for office in the central business district, that we begin to rethink this. And actually, folks in New York, the Regional Planning Association, is actually talking about something they call regional rebalancing, which I never thought I'd hear in my entire life. The idea being that you could build up some remote satellite office complexes in the suburbs closer to where families lived. You could repurpose some office buildings in center cities for residential.

And no, not everything is going to look like this urban utopia 15-Minute Neighborhood, but you could get a metropolitan area where people are enduring less long commutes and living closer to work. So, I think one thing we might see is a reshaping of the urban center, less around office work and commercial work, and a little bit more around residential. And again, as Ed said, I don't think that will be a bad thing.

What I want to emphasize is, I think that the role of the pandemic, the cost it will have, is on the owners of the real estate developers and people who own real estate assets. I think cities will do just fine, and people will figure out ways to work and live. I think the folks who are likely to bear the pain of this are going to be folks whose rental base takes a hit, or who have to figure out a way to convert buildings from one use to another.

I agree with that. Two minor caveats, if I could. Not caveats, minor sub-points of that. One of which is, the conversion from commercial to residential, which I agree with Richard will be a push. Cities will be more durable in the demand for their consumer assets for their living amenities than they will be for their workplaces. That requires a land use regulation situation that is permissive enough to enable those conversions to occur. So, I think that's a really important thing, to make sure that the process of conversion is possible.

The second thing is, the one thing that we should always pay attention to is, it's fine for real estate developers to take a hit. They're big adults. They made their bets. But we do have to worry a little bit about what that means for cities that are dependent upon property taxes for their basic revenues.

I agree 100%, and I think you had mentioned this, Ed, earlier. I think it's not the pandemic ... The pandemic per se is tragic. It's the economic and, more importantly, the fiscal fallout. The fiscal fallout of this on cities, if a new federal administration doesn't think long and hard about a bailout for cities, this could be the really catastrophic thing. You mentioned that already. So, I think you're 100% right about that.

I want to ask about this, and we're nearing the end of the half hour. The podcast focused on geographic disparities in the U.S., and obviously there are different regions where these disparities are most evident. Certainly, the rural/urban divide is one place. I guess the presumption would be that it would take a long time to bring better balance to close these disparities. But I'm wondering, has the pandemic altered the landscape in any way in terms of making it either easier or harder for this country to close these geographic disparities? Richard, if you want to go first.

Sure. I worry about this a lot, and I've worried about it for a long time, and Ed worries about it a lot. My fear is that, and Ed has mentioned this before in this conversation, without really proactive strategic and intentional policy, and in this case from the national level, that this will grow, not get better. That the structural forces that are causing density, causing clustering, causing concentration, are such that it doesn't look like this is going to go away.

You combine that with a shift to remote work with the economic advantages to education and more skilled workers, boy oh boy, it seems to me something, and Ed has done a lot of interesting writing and thinking about this, that this will just compound. That this pandemic is no panacea, and in fact it wouldn't surprise me to see both between cities, at the macro geographical or inter-regional scale, and within cities.

And look, if you look at inequality increase, and if you look at just the effects of the pandemic by occupation, by socioeconomic status, by race, even the effects of the pandemic per se have hit much harder at racial minorities: Blacks, Hispanics, of course frontline service workers. This is the kind of thing that keeps me up at night. And this is where I think, hopefully, if we end up having a new administration, we will have a more coherent and robust federal policy to address what I personally think is one of the biggest problems of our time: geographic inequality.

I certainly agree that this isn't going to cause any problems to particularly go away. In fact, the only way that disparities go away is in my more unfortunate scenario, in which everything ends up being catastrophic; and in which you might see some disparities disappear, but only in the common shared experience of awfulness.

The pandemic has certainly been highly unequal. Working at home has been highly unequal. One of the things that we've seen in the patterns of working at home is that both the people who can work from home, and the productivity of people who work from home, is much higher in more educated industries. As is the case that is so often with technological change, it favors the better educated, and so the intereducational gaps are likely to increase.

Before the pandemic, I was obsessed with this problem of what was the future of low-skilled employment in the United States, apart from the most educated, most successful cities? So, I believed that there would always be a job for an energetic, urban service worker in a city like Boston, who would figure out some way to create a more fun restaurant experience, or a more fun café experience. I didn't know what less skilled people were going to do in West Virginia. The threat of an enduring pandemic that makes all of our face-to-face interactions potentially dangerous is it threatens to make the whole world like West Virginia, make all of the job opportunities like West Virginia.

But in the more optimistic scenario where cities do come back, albeit with lower real estate values and with significant fiscal challenges, I don't see how this does anything to solve massive regional inequities, or to make things in any sense better for the long-term jobless in America's eastern heartland. I think, if anything, it will distract policymakers' attention from trying to create policies which would be meaningful for them. So, I think the problems that we faced of the spatial inequities ahead of time still exist.

I want to stress, from my perspective, it's not so much that I've ever wanted to redistribute from New York or Boston to Appalachia, but I sure as heck want policies that are sensible for Appalachia. And those mean different policies. You never want the same housing market policies in Texas that you do in San Francisco, and you never want the same labor market policies in West Virginia that you want in Seattle. We need to make sure that we are making it possible to find a job anywhere, and to make your future anywhere, and to get a decent education no matter where you're born.

Yeah, and maybe just one last point on this, because Tim Bartik at the Upjohn Institute has just written yet another incredible report, for the Aspen Institute this time, talking about the need to move away ... He's talked about this a lot from incentive-based interstate interjurisdictional economic development policy, like bidding for an Amazon HQ2, and focusing those resources on helping exactly what Ed said: distressed places.

He makes a very compelling case that there are good things that we can do there. We can provide business support services. We can provide services to educate and re-skill workers. We can provide services at the community neighborhood level. So, I think that's an area, going back to the conference you all had, that Ed and I and a bunch of other people participated in, where I learned a tremendous amount. Thinking about policy to lift the boat of distressed places is probably a big agenda item for the next decade.

And I'm actually more optimistic. I used to be terribly pessimistic, but given what I've heard from good, solid, urban economists and folks like you at the Fed, the Boston Fed, I think it's an area we may be able to make some traction on.

Thanks for listening to Six Hundred Atlantic, and please check out the rest of our debut season, which includes five episodes and a bonus episode. Learn more and subscribe to our mailing list at Listen and subscribe to Six Hundred Atlantic on Apple Podcasts, Spotify, Stitcher, and TuneIn.

The producers would like to thank our expert contributors for lending their time and insights.

Six Hundred Atlantic is a Federal Reserve Bank of Boston podcast hosted by Jay Lindsay. Produced by Jay Lindsay, Allison Chase, and Peter Davis. Executive producers are Lucy Warsh and Heidi Furse. Recording by Steve Osemwenkhae. Engineering by Steve Osemwenkhae and Alex Cronin. Project manager is Allison Chase. The chief consultant is Christopher Foote. The podcast is written by Jay Lindsay and edited by Christopher Foote, Allison Chase, and Nicolas Brancaleone. Graphics and website design by Meghan Smith and Stephen Greenstein. Production consultants are David West and Thomas Stranberg.