If you are looking for creative talent, a University of Toronto economist suggests you target occupations rather than college degrees. Otherwise you could be skipping too many people. The reason? People with college degrees are likely to be in the creative class. But 6 out of 10 individuals who do creative class jobs did not graduate from college. Where are we going? To how the geography of creative talent has changed. The Geography of Creative Talent Between 2005 and 2017, the creative class was spreading. By 2017, cities like San Francisco, Washington D.C., Austin, and Boston could no longer claim a creative monopoly. On our “before” map, approximately 10 U.S cities were creative job centers. They were the regions with the science, healthcare, business, tech, art, and science occupations. They had the educated professionals. Before 2005 Map
2005:
After In 2017, the places with a vast proportion of creative talent increased. Reflecting a spread, the greater number of red splotches reflects a more highly concentrated creatively talented people. But also we have more orange:
The 2017 map shows the same top five cities (in different order) with a higher proportion of creative talent in their population than in 2015:
The key difference though for 2017 is more orange. The change in color illustrates the spread to cities like Salt Lake City, Pittsburgh, and Cincinnati where the creative class is growing. Our Bottom Line: Human Capital To understand human capital we can imagine the tools and equipment in a factory. Called physical capital, tools and equipment create your productive capacity. Like those tools and equipment, our creative talent makes our human capital more productive. Because the jobs that require more creative human capital tend to have higher salaries and boost diversity, their spread should fuel economic growth in stagnating Rust Belt cities and other similar regions. My sources and more: This City Lab article has a detailed look at the geography of talent. From there, if you want to read onward, Richard Florida’s research, here and here, digs deeper into economic geography.
Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.
According to “The Time You Have (In Jelly Beans),” with one jelly bean for each day, 28,835 jelly beans represent all the days in an average life. Then in that life, 8,477 jelly beans show how much we sleep, 3,202 reflect how long we work, and 1,635 indicate the total days we devote to eating and preparing our food. I do recommend using 2 minutes and 44 seconds (from the 42 million minutes in a typical life) for this jelly bean video:
So yes, we sleep for the equivalent of 8,477 days and work during 3,202 days. Now though, let’s take a closer look at how our our time use differs from the averages. The Cost of Spending Our Time In his new book, Spending Time, economist Daniel Hamermesh compares the ways that different groups of people allocate their time. The title is intentional. Just like money, the time we spend has a cost. Using it for one activity means sacrificing it for an alternative. The cost is the sacrifice. Dr. Hamermesh starts out by telling us that a typical 79-year lifetime has 42 million minutes. From there, he creates a slew of distinctions. Depending, for example, on our affluence, where we live, and our age, we use those 42 million minutes differently. (Dr. Hamermesh did look at gender but so too did we at econlife, here.)
Income
Faced with time choices, those with more affluence have more alternatives. Here, Dr. Hamermesh selected the top 5% who earn close to $300,000 annually.
Earning more creates the incentive to work more. You would see a professor working six hours more each week than the U.S. average. At 10 hours more, doctors work even longer than is typical and for lawyers, the extra weekly time is three hours.
But, by working longer, there is less time for other activities. It means fewer hours are available for “home production” since preparing a meal and cleaning up afterwards are time intensive while eating take-out or going to a restaurant are not. However, they do require more money. The top 5% also sleep fewer hours, watch TV less than the rest of us, and spend more time on other leisure activities.
From there, Dr. Hamermesh observed a demographic that does not work. In the U.S., non-workers who are quite well-to-do spend fewer hours in front of the TV than those with less. The more affluent who don’t work also sleep less.
Country
People in the U.S. work more than individuals in most other developed countries. German workers on average are on the job eight hours less per week than we are while for the French, it’s six hours less. Perhaps correspondingly, the U.S. labor force takes less vacation time.
Age and Geography
When Dr. Hamerhesh looks at age, he points out that as people age from 60 to beyond age 85, they do less paid work. Then, with the time available, they watch more TV and sleep more. Interestingly, “home production” diminishes with age.
He also compares those of us who live in rural areas to those in the city and suburbs. Here, the people in our biggest cities work longer hours and do less TV watching. The one statistic that stands out for the rural demographic is more home production than the other two groups and less time for other leisure and personal activities.
Our Bottom Line: Opportunity Cost
Putting it all together, we wind up in familiar economic territory. It takes us back to opportunity cost and the elusive free lunch. Time use decisions always require a sacrifice. Called opportunity cost, choosing is refusing the next best alternative. When someone takes you out to lunch, you might have used that same time reading your email. Watching Netflix could mean you did not talk on the phone. And when you earn more, spending time in the kitchen can become too expensive. My sources and more: As did I you might enjoy reading (actually skimming and focusing on certain chapters that grabbed me) the Hamermesh book. But, for the short version, this interview conveys what he says. If you are choosing though, this Econtalk podcast has the lowest opportunity cost.
Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.
The United States declared independence from Great Britain on July 4, 1776 and won the American Revolutionary War. But still, we were not truly independent. Our agrarian economy depended on Great Britain. They had the banking system, they had the factories, they had the knowhow. But we had Alexander Hamilton. Alexander Hamilton’s Development Plan As Secretary of the Treasury, Alexander Hamilton’s goal was to expand the U.S. banking system, our transportation infrastructure, and technological innovation. He wanted factories that would process what our farms and plantations grew. So, in Hamilton’s development plan, he explained to the Congress what they had to do.
1. Establish Public Credit
Hamilton said a national debt is a blessing if it’s not too large. Borrowed money had helped the U.S. finance the Revolutionary War. Also, though, those lenders had to know we would pay them back. With European creditors, the U.S. had to pay back the money that was due them while domestic creditors needed to know we had a viable plan. Only then could Hamilton establish the good credit that was necessary for a government to borrow the money it needed.
Since then, the U.S. has been borrowing money and paying it back. However, some of us are worried that the debt is becoming too large. Just like your own income determines the wise amount for you to borrow, so too does the GDP for our nation. Below you can see that recently the debt is an increasingly bigger proportion of the GDP. Almost equal to World War II highs, the debt is projected to balloon from 78% of GDP for this year to 92% in 2029:
2. Create a Banking System
By establishing the First Bank of the United States, Alexander Hamilton generated the beginning of a banking system that pumped money around the U.S. economy. His goal was a network of financial intermediaries that connects savers to borrowers. He knew that banks loan money to business start-ups and help firms finance inventory. They expand and contract the money supply and purchase the bonds that nations sell to raise money.
Now, while there are close to 4,600 banks in the U.S., the large ones predominate. Below, you can see how the system has consolidated:
Among the 10 largest U.S. banks, the four with the most assets are JP Morgan Chase, BOA, Citi, and Wells Fargo:
3. Encourage Economic Diversity
Economic growth through diversity was the third leg of Alexander Hamilton’s plan for independence. Recognizing that the U.S. in 1790 was a farming economy, he sought tariffs and subsidies to protect a young manufacturing sector. He supported a system of tariffs to encourage innovation. Correct again, Hamilton knew that the combination of agriculture, manufacturing, and invention could form an economic foundation from which we could build.
Looking back, we can say that Hamilton created our springboard. About a different kind of independence, Hamilton’s foundation facilitated the leap beyond our borders to globalization. It let us evolve from an agricultural economy to a productive behemoth that needs world markets and global supply chains to feed our growth.
The huge volume of goods and services that each U.S. state produces can be compared to these countries:
Shown above, the four largest state GDPs would equal the value of the goods and services produced by UK, Canada, Korea, and Mexico:
Our Bottom Line: Déjà Vu Hamilton’s goals are timeless. We still need to manage sovereign debt wisely, support a vibrant banking system, and encourage economic growth. My sources and more: This Fortune article sums up the Hamiltonian legacy ideally.
Please note that this post is an updated version of what we have published on past Independence Days.
Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.
Imagine for a moment that an out-of-control streetcar is hurtling toward five people. Sitting at the controls, the driver can do nothing and assume those five individuals will die. He can though flip a switch and instead hit a single person. Doing nothing results in five fatalities. Acting will cause one person’s death. What to do? It might all depend on where you live. But first, the reason we need to know. Autonomous Vehicles A group at MIT wanted to identify what people believe is ethical because self-driving vehicles will have to make decisions. Yes, most involve the everyday traffic rules we (are supposed to) observe. However, especially in emergencies, some will be about life and death. A machine will have to decide whether to strike someone who is old or young. It could have to choose between harming men or women, more or fewer people, animals or humans. An autonomous vehicle can act or do nothing. The Study To see the ethical driving decisions that should be made by self-driving vehicles, those MIT researchers created a survey. Called the Moral Machine, 13 scenarios were presented to millions of people in 233 countries. All had situations in which someone had to die. Their task was deciding who. The geography of the Moral Machine:
The Results Among the participants, there was general agreement about three moral dilemmas:
humans over animals
save many rather than a few
preserve the young instead of the old
However, it wasn’t quite that easy. Moving from general preferences to specific answers, researchers uncovered much more division. Geographically, the responses to the Moral Machine questions divided into three groups:
The Western Cluster: Values that related to Christianity characterized the answers from North America and some of Europe.
The Eastern Cluster: People with a Confucian or Islamic heritage from places that included Japan, Indonesia, and Pakistan tended to have similar opinions.
The Southern Cluster: The third group, not explicitly tied to specific religious roots, was from Central and South America, France, and former French colonies.
Nature Magazine illustrated the differences through a moral compass:
In addition to geography and religion, ethics varied by gender, age, education, income, and politics. Institutions mattered. In more affluent countries with established institutions (like Finland and Japan), survey participants were more likely to condemn an illegal jaywalker. As for age, respondents in the Southern Cluster tended to spare the young rather than the aged. Our Bottom Line: Externalities For self-driving cars, ethical programming has become a reality. Necessitating countless choices, the decisions will create externalities. Defined as the impact on an uninvolved third party, the externality can be positive or negative. Now though we can see that what people call positive or negative will vary. I wonder if that means having self-driving cars with a Western, an Eastern, or a Southern personality. My sources and more: I recommend taking a look at Nature’s article on The Moral Machine Experiment. From there, you might also enjoy this 99% Invisible podcast and this German Ethics Commission report, and do be sure to take MIT’s moral machine quiz.
Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.
