Reconnecting Work to Place
Lately I’ve been contemplating Enrico Morreti’s 2012 book “The New Geography of Jobs”. In it, Morreti makes the case that urban winners and losers are determined, in large part, based on the extent of geographic concentrations of high-tech employment. San Francisco was perhaps the most prominent example of the thriving economic ecosystems that can emerge when tech employment is aggregated in one region. I believe Morreti’s core thesis remains correct. But his ecosystems are more fragile than we may have anticipated. In fact, it seems they can unravel in much less time than they took to build.
Having lived in the Bay Area, working in commercial real estate (office sector) for over 30 years, I’ve seen the region’s transformation, firsthand. I’ve witnessed the exact effects Moretti details in his book. San Francisco, in the late 1980s, was a stable, if not sexy, regional headquarters market. Most regional tech was concentrated with hardware companies in the Silicon Valley (Cisco, Apple, etc.). The Dotcom era ushered in a new generation of software tech innovation, activating the internet. This new economy was centered in San Francisco. While many of the companies driving growth in that era failed, San Francisco nonetheless became the place tech workers wanted to live and work. From the mid-1990s to early 2020, San Francisco’s appeal continued to grow. Yes, it became increasingly expensive, but the jobs were here, as were the best salaries, the best opportunities.
The pandemic separated worker from place. First from their offices, then, in some cases, from specific geographic centers, altogether. Initially, tech workers seemed unaware of the broader implications of remote work on their local economy. Many still can’t connect the health of their city with where they choose to work. Workers don’t believe a thriving city has anything to do with where they choose to work. They see such suggestions as little more than pandering to the interests of office investors and corporate leaders. To them, these interests look to profit at the expense of the worker. It’s not the worker’s fault the health of modern cities relies on their presence. No one asked them.
Downtown financial districts (like San Francisco’s) were built on the premise that workers aggregate there to work. Today, we have a new class of so-called experts who’re quick to point out the obvious strategic flaws in the planning of cities this way. They say, San Francisco planners were short-sighted in creating a downtown centered around the presence of daytime workers in offices, the vast majority of whom commute into the downtown market from other parts of the region. Planners obviously should have created a more diverse downtown, with more housing and related uses. They argue the city’s concentration on the tech sector was a strategic blunder. Planners should have promoted diverse industry. Where have these experts been the past 2 decades? If the San Francisco playbook was so wrong, why did government officials across the US (many likely clutching Moretti’s book) race to replicate it? No, it wasn’t wrong. It worked and would still be thriving today if not for the separation of work from place.
Cities all over America (not just San Francisco) are searching for new ways to thrive without concentrations of workers. So far, none have devised a winning strategy. Like American factories before them, modern office markets were purpose-built. Indeed, the transformation of manufacturing jobs in America is an apt proxy for the ways in which distributed work may play out. Those pro-distributed work argue it creates a more equitable economy by spreading the wealth of highly paid workers more evenly across the US. But they fail to see that when employers are not limited to local, regional, or even domestic labor markets, when they’re hiring from a global labor market, competition increases while compensation decreases. The US worker, let alone the Bay Area worker, is substantially devalued. Negative impacts on the workers themselves is thus the next phase in the deconstruction of the economy caused by dislocating worker from place.
It’s imperative that corporations reestablish connection between work and place. This connection is vital to the welfare of our cities, and workers alike. Yes, workers should have more flexibility and agency in how and where they work. But we need guardrails. Leaders, both corporate and government, seem to be increasingly aware of the urgency of this situation, and we’re seeing an evolution of better thinking, of better strategies. Hopefully, this trend will continue.