Cities around the United States and the world see high-tech industries as a key source of economic advantage: Look no further than the incredible time, expense, and effort more than 200 cities put into competing for Amazon’s HQ2. Urban leaders know that, not only are jobs in technology good jobs, they also spur the creation of lots of follow-on jobs. In The New Geography of Jobs, economist Enrico Moretti argues that every high-tech job has a multiplier effect of an additional five jobs, spurring a virtuous cycle of economic development and employment growth.
Yet it is increasingly evident that major tech hubs (San Francisco, Boston, Seattle) and superstar cities with large high-tech industries like New York and London have become more and more unequal, especially with their high housing costs eating away at the incomes of blue-collar and service workers.
Now, a new study finds clear evidence that low-skilled workers fail to benefit from high-tech growth and development. Even in the face of very strong job-creating multipliers, low-skill service work pays so poorly that the average wage for these workers actually falls, with their income further eroded by high housing costs.
In a forthcoming article in the journal Research Policy, Neil Lee of the London School of Economics and Stephen Clarke of the Resolution Foundation in London, track the growth and effects of high-tech and digital industries across cities in the United Kingdom from 2009 to 2015. (The high-tech and digital industries combined, account for roughly 7 percent of total U.K. employment.) Lee and Clarke look at the effect of ..
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