Sunday, July 15, 2012

Review of The New Geography of Jobs by Enrico Moretti

Enrico Moretti doesn’t present a complicated thesis in The New Geography of Jobs. At its’ core, its’ quite simple actually: Communities that have become innovative, have plentiful job openings and are looking for people, while the old manufacturing belt failed to innovate and is in a decline.
 The thesis is a challenge to the conventional wisdom that manufacturing is the key to job growth. He’s found that innovation actually creates more jobs than manufacturing, yet he admits that not every community is going to be or can be Silicon Valley or Seattle.
I also appreciate that Moretti doesn’t come across as a “wonderboy” economist telling city leaders “Do x and you’ll have prosperity.” He states quite openly he doesn’t have an absolute answer.
My concerns with Moretti are more practical. In several places, he talks about increasing government expenditures on education and innovation, under the premise that the investment will come back several times.
Let’s say we accept the premise. In an era of budget deficits that are necessitating deep cuts in many states, how do you convince politicians, who are more worried about their next elections to undertake such a course?  While these investments may prove valuable long term, they won’t offer much bounce to a politician’s poll numbers.
Overall though, an interesting take to the never ending problem of jobs.

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