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UNCONVENTIONAL WISDOM
From Site Selection magazine, September 2014
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Jobs Lure Hipsters. Hype Doesn’t.

by MARK AREND
F

inally, clear thinking — and census data analysis — is being applied to the notion that US cities are brimming with recently graduated millennials and boomers. Conventional wisdom would have us believe these youngsters are lined up around the block, sipping their Starbucks venti Mocha Valencias —with room for soymilk — to interview at one of the 850 new creative agencies that opened last week in the coolest part of town. Not so fast.

Cities have been urged to market themselves as magnets of such enterprises
for years, and many have done so, including Detroit, where recently empty office towers are now populated during the day with technology workers in the "Webward" district, Quicken Loan mortgage operations (not as cool, but it pays the rent) and thousands of other mostly young workers benefiting from the Motor City's status in 2011 as the fastest-growing US metro area for technology jobs, according to Dice.com. Site Selection covered this phenomenon in its January 2012 issue.

Most major US cities already had creative types living and working in urban core areas — some more than others — by the time it became hip to do so. That's what college grads did if their circumstances permitted. For most, it was prohibitive to pay city rents and city amenity costs - basic or otherwise. So the kids that found these jobs commuted and lived in the suburbs. When their kids came along, relatively few chose to give them an urban upbringing. Besides which, with few exceptions, the creative enterprises so desperately sought by cities hoping to be the next San Francisco, Seattle or New York are not huge job generators.

Cities' Achilles' Heel

That's the real point - a lack of jobs in urban cores and elsewhere for millennials that will make it economically feasible for them to populate the neighborhoods that apparently await them. Some of the best analysis of urban demographic trends can be found regularly at NewGeography.com, a joint venture of Joel Kotkin and Praxis Strategy Group, and an excellent demographic and urban trends resource. Kotkin, in an August 4th post, "Millennial Boomtowns: Where the Generation Is Clustering (It's Not Downtown)," cites a Pew study estimate that 36 percent of people 18 to 31 are living at home, up from 32 percent before the recession.

Writes Kotkin: "This constitutes a population of over 20 million and not all are hopeless slackers —the vast majority have at least some college education. But they are also disproportionately unemployed or out of the workforce, and, living in their parents' homes, they are pretty much ignored by everyone except their friends and relatives. Other millennials may well be living in suburban apartments, which tend to be somewhat less expensive, and others, perhaps the oldest of the group, have begun to 'launch' starting families and buying houses, which would tend to put them in the suburbs and smaller cities as well." (Read Kotkin's whole post at NewGeography.com.)

It didn't take long for an actual millennial to weigh in on Kotkin's article.

"What about jobs?" asked Anthony the following day in the post's comments. "Employment statistics are conspicuously scarce in this digest of millennial desires. If over 20 million of my generation 'are also disproportionately unemployed or out of the workforce, and living with their parents,' then how can we tell what they want? People — no matter what their age — go where the jobs are.

"As an elder millennial myself," adds Anthony, "many of us would love to eschew suburban dwellings in favor of urban areas where we meet friends and engage in activities — all within walking distance. What keeps us from realizing that desire is the total lack of jobs that support the high rents that come with living downtown."

Exactly. More than a sociology lesson, this is a wake-up call to cities to be realistic and proactive about what they offer this demographic (affordability, safety and job opportunities to start with) if they are serious about bringing millennials to their urban cores. Detroit may be the best example yet of how to do this — it's at least a compelling one — and the credit there goes largely to private investment, not public initiatives.


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