So far we've kind of covered what cities are and why they matter. We've talked about kind of the growth of cities, not only in countries like the United States and Canada and developed countries, Europe. We talked about the explosion of cities and urbanization around the world, and we've covered the shift from the old industrial city defined by factories and infrastructure and big things, to a city where knowledge and creativity and these kind of human dimensions becomes more important. One of the things that we know is that in terms of the people who move back to cities, it's not the 1 percent, it's the most affluent 10 percent of our population. Techies have come back to cities. The techies who want to be in those same loft and gallery spaces that the artists pioneered, and some people even say it's not gentrification anymore. It's hyper-gentrification, as the Global Super Rich, you know, people who lived all over the world want to have a flat in London or an apartment in New York or Paris. I call that the Paradox of Land. We have a big world with lots of land, but it's the stuff that's so concentrated and clustered. So right now we have a new urban crisis. Most urbanists had agreed with me that these creative centers, these knowledge centers, these tech poles, wages were higher- not only for the advantaged, but for everyone. And if you do a statistical analysis, the larger and more technology based are created in metropolitan areas, the higher the wages. What no one ever did - but we did, is we looked at the wages groups of people have over after they pay for housing. And what we found is the creative class of knowledge workers was doing fine, even though their housing is more expensive and they're spending more. They had enough left over from their salary to pay for housing and live a good life. The working class, the service class if you will, the people who work in retail shops, the people who work in hospitality and tourism jobs, hotels and so forth, the people who take care of our kids, who take care of us when we're older, they were getting whacked. They were falling so far behind. So I said to myself, someone has to dig into this. Someone really has to understand the economics and the driving forces and geography of this new urban crisis. So with my research team at the Martin Prosperity Institute and my colleagues, I tried to dig in, and tried to define what this new urban crisis is. So, I think having done this research and having looked at the data, there are several dimensions of the new urban crisis that you probably are living through, and you should probably know about. The first is the rise of what I call a "winner take all urbanism". It's not an urbanism that everyone benefits from anymore. It's an urbanism that confers its benefits on a very narrow group of cities; you know, like in popular culture, a great athlete like LeBron James, or a great musician like Taylor Swift or Beyonce, they haul in a huge amount of money. And the same thing with CEOs- you know, they found that CEOs are hauling in more and more money while workers fall farther behind. That's not just something that happens to actors and actresses and musicians. That's something that's happening to cities. These great superstar cities are capturing finance industries and media industries. And in San Francisco technology industries, in Los Angeles the film industry. And the gap between these superstar cities and everyone else is growing. The second dimension is the superstar cities themselves are falling victim to this crisis of success, and across a couple of dimensions. Increasingly musicians and artists are telling us - whether it's David Byrne from the Talking Heads, or Patti Smith who said you know, don't come to New York if you want to make a career, go to Detroit. Musicians and artists are telling us that they could no longer afford to move to those cities. So they at least believe that some of this creativity is being drained away. It's a complicated question, but that's what they believe. But young people are being priced out - now maybe they can go there for a while when they're very young and live, you know, six or eight to an apartment and share, but as soon as they partner up and want to have kids, they're being priced out. More importantly, how do you run a city if the people who a city depends upon, police officers, the firefighters, the emergency technicians, people who take care of ambulances, staff hospitals, the school teachers - how do you run a city if those people can't afford to live and are commuting one or two hours each way? It's a crisis of how you can even keep a city going. So that's the second dimension. The third dimension is the growing crisis of the suburbs. The new urban crisis is bigger than the old one because it's not just a crisis of the center city. It's a crisis of the suburbs. Poverty has shifted massively from the urban core to the suburbs. As the affluent tend to have moved into the cities. The poorest tenth has been pushed out, but where are they going? To close in and nearby suburbs. Even though cities have more poor people still, the suburbs have seen a much faster growth in poverty and in concentrated poverty. You know, in a city, at least lower income people have access to social services and an infrastructure setup. In the suburbs, they're isolated from jobs, they're isolated from services, they're kind of out there on their own. To boil this all down, if the old urban crisis was about the city being emptied of its function - they called it "the hole in the donut", the hole of poverty and disadvantage, being surrounded by affluent suburbs, the newer urban crisis is a crisis of the missing middle. The middle class has not only declined in our societies - our middle class neighborhoods have been eviscerated. In the United States, in 1970 or 1980, two thirds of the population lived in middle class neighborhoods like I grew up in. Now it's less than 40 percent. In 203 of the 229 metropolitan areas for which data is available, the middle class shrunk. The middle class has shrunk the most in the most dynamic, the most affluent, the most educated, the most creative class cities, as those cities have divided. And the middle class has stayed the most stable in the most industrial, the least knowledge intensive, the least vibrant cities. So wherever we've seen vibrancy and dynamism and economic growth, we've seen poverty and inequality grow, this separation between the rich and the poor grow, and the middle class decline. In terms of coming to grips with this new urban crisis, there's two or three things I'd really like you to think about - some of them in the big picture and some of them about you. So the first thing is, you know, there are two kinds of ways people think we could address this. The first is a group of people, myself among them not too long ago, who believe if mayors simply had more power, if mayors could control their destiny, mayors would do it all. Now, I think mayors should have more power. I think mayors should control cities. They're the people closest to the action. But, you know, mayors don't control the resources. States and provinces and national governments do too. And I think one of the things that's so important in my own work, is to make sure that our national governments are doing what they need to do to support the fundamental economic and technology engines of our economy. So we need massive investments in urban infrastructure, massive investments in transit. We need investments in affordable housing. Look, we spent a lot of money building suburbs. We developed highway programs and subsidies for suburban homes. And in that time, suburbs drove our economy because as people moved to the suburbs, they not only bought a house, they bought a car, they bought a stereo system, they bought a television - all the stuff coming off the assembly lines. But in a knowledge economy, what drives growth is clustered, dense, diverse development in urban centers and in revitalized suburbs. So we have to make that a priority, and we have to invest in them as national governments. One of the ideas that I believe advanced nations should undertake, can undertake, is that in the United States for example, the President should have a council on cities, a council of cities involving mayors and city builders. But I think the most important thing from this class, I mean that's the big picture, is that you're aware of this and that you're making the right set of decisions for you. It costs a lot of money to move to a superstar city, and you need to balance that equation. Do I want to move to a New York or a London or a San Francisco or a Toronto - one of these expensive superstar cities or tech hubs, or do I want to pursue my career in a city that's more affordable like Nashville or Kansas City or Pittsburgh or Detroit? Do I want to look at a lifetime of decisions? Maybe it's not a one time fits all. There is no doubt that economic opportunity is clustered and concentrated. There is no doubt that we have developed this superstar economy in superstar cities. And the question is for you to be aware of that and to make the best trade-off with regard to your professional future, your economic future, the kind of lifestyle you want, the kind of future you want from your family, and the kind of housing and the amount of money you want to pay for housing to live in that kind of city, and to make the best choice for you.
