The Geography of Affluence

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The Geography of Affluence

For years, we’ve heard that the rise of digital technology and the resulting increase in telecommuting was going to render distance and geography irrelevant. 

It is true that there are already many examples of people working remotely, removed from a physical office by distance and even time zones, connected virtually and contributing as if they were physically “there.”  So it seemed intuitively obvious that a person’s location was no longer going to matter because “there” was now everywhere. 

But, it turns out that these examples are not glimpses of a “placeless” virtual future; rather, they simply represent a small niche of work that happens to lend itself to being created, sent, and “collaborated upon” in an exclusively digital context.  The vast majority of jobs, it seems, still require a physical presence and a certain degree of face-to-face spontaneous interaction. 

As Enrico Moretti points out in his new book, The New Geography of Jobs,1 in spite of the advent of the Internet and the connectivity of social sites such as Facebook, people still learn more from the colleague down the hall, where interactions run much deeper than they do online.

One can add that once face-to-face relationships have been established, virtual communications can profitably substitute for much of the subsequent back-and-forth.  But, purely virtual contact cannot fully replace one-on-one interfacing in the vast majority of situations. 

What this means is that futurists were wrong about location not mattering.  Even more surprising is how much the geography of job location still matters.  In fact, it has become even more important than it was before.  So, more than ever, improving one’s lot in life will likely require being in the right place.

For Americans, this is not a new concept.  Currently, roughly 33 percent of American citizens do not live in the state in which they were born.  This is up from 20 percent in 1900.  This mobility is reflected by the fact that around half of Americans move from one home to another every five years.2 

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On the other hand, Europeans tend to stay near their families and even spend their whole lives in their hometowns.  Young Italians clearly follow this pattern, with 83 percent of males younger than 33 still living at home.

Traditionally, Americans have accepted the downside of moving in order to realize the gains.  We’ve grown accustomed to the social and personal costs, such as living farther from our families and being less attached  to our neighborhoods and neighbors...

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