What have cities ever done for us?

10th August, 2007

My wife grew up in the countryside. To the extent that I have ever grown up, I did so in a series of small towns. Now we live in London and we are always dithering about whether to stay put with our young family, or move out to the countryside.

It is a decision for us, of course, but it is a decision that affects others – and is affected by the mixed signals provided by the government’s involvement in schools, infrastructure and the planning system. To the extent that governments get involved at all, they should be defending cities, strengthening their infrastructure and allowing them, within reason, to grow. In the UK and to some extent the US, they seem determined to do just the opposite.

Most people would prefer to live in cities. We know that because they currently accept a big financial penalty for doing so. Once you strip out the effect of the higher cost of living in cities – chiefly housing and tax – average city wages are lower than those in the countryside and small towns. Daniel Gross, the New York writer, recently totted up the purchasing power of the New York dollar: a mere 61 cents; and higher New York wages compensate for less than half the difference. The Harvard economist Edward Glaeser finds that a similar pattern holds across the US: real wages are lower, not higher, in the bigger cities. I don’t propose to shed a tear for New Yorkers or Londoners here, just to point out that we are not in it for the money.

Continued on ft.com, subscription free.

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