Industrial clusters and thick labor markets

I’m waiting for a huge piece of code to rerun and I should not be working on a cognitively intensive revise and resubmit on a Friday afternoon, so I want to go back to what I originally went to grad school for — urban economics and economic development — for a minute to respond to a seemingly populist and really dumb proposal to strip the federal government of expertise proposed by Andrew Yang.

Let’s think about Washington DC’s primary export industry as government and more specifically federal government leadership and top level analysis and management. The federal government is an industrial cluster in DC much like venture capital fueled technology firms are an industrial cluster in San Francisco-San Jose region, bio-tech is a cluster in Greater Boston and steel was a cluster in Pittsburgh. Clusters are interesting in that they are often positive feedback loops until they run into hard constraints or a massive external shock.

There is a huge literature on the positive feedback loops on economically successful clusters. One of the major drivers is that a cluster creates a rich and thick labor market. This means that at any given point, there are lots of good jobs available to anyone who is qualified to work in the cluster. People aren’t locked into a “good enough” job because that is the only job available that utilizes any specific human capital/education/tacit knowledge available to them, but that people can readily shift between positions to maximize their personal gain. In Washington DC, if someone is a research economist, there are a hundred opportunities within seven Metro stops of their current place of employment. If someone is a research economist in Sault Ste. Marie, there may be one or two within an hour of their current place of employment. The same applies for geneticists who work in Boston vs. geneticists who work in Boise.

Employment concentration creates specialization and optimization. It allows for work to be more productive as the cluster grows and the labor market becomes even thicker and deeper. This is all pretty standard.

There is another labor market point to make; large urban areas have lots of jobs that are not in the primary export industry. This could matter for me at some point in the future as I could easily see myself spending a couple of years working for either the federal government in the DC-Baltimore region or working for an entity that directly services the federal management and analysis industrial cluster. My wife has a skill set that could translate into this industrial sector but her current experience is in a general professional environment. If my options for moving to DC for federal work or Boone, North Carolina, my wife will far more readily find a good enough job in DC.

Dispersing the vast majority of the DC/Baltimore/NOVA government management and analysis cluster that has been built up over four generations is a great way to make the federal government less efficient and less attractive to top tier talent especially if the dispersion would be going to smaller urban clusters with far shallower and thinner labor markets.






70 replies
  1. 1
    satby says:

    Human beings are just widgets to be moved around at will by the people who propose ideas like this. Just pieces on a board, not people with families and tied to a community. Just another degradation of our public commons brought about by MBA type thinking.

  2. 2
    FlipYrWhig says:

    FWIW I am pretty sure Matt Yglesias has made this suggestion many times over the years.

  3. 3
    Baud says:

    The biggest problem with DC are the Republican politicians sent there by the red areas of the country.

  4. 4
    Jay says:

    "Terrible things are happening outside… poor helpless people are being dragged out of their homes. Families are torn apart; men, women and children are separated. Children come home from school to find that their parents have disappeared." – Anne Frank (Jan 13, 1943) pic.twitter.com/0BYYyzdPXG— Anne Frank Center (@AnneFrankCenter) April 6, 2019

  5. 5
    Baud says:

    Also, too, excessive dispersement of federal agencies ends up making them less accountable to political leaders and the media.

  6. 6
    Katdip says:

    This is not just some Yang fantasy. The Repubs are doing it right now, shifting the Dept. of Ag research and economists to Kansas City, and BLM land management to Grand Junction, CO. Both these programs will be gutted as 2/3+of the staff choose not to relocate, and good luck hiring equally qualified people in those places. Evil Mulvaney actually said relocation is “a wonderful way to streamline government.”

  7. 7
    Scamp Dog says:

    Didn’t the Trump administration just do this to a Federal agency? Checks on Google…

    Yep, moving 300 Bureau of Land Management jobs to Grand Junction, CO. I had a fairly good impression of Andrew Yang until now, I will be re-evaluating.

  8. 8
    justawriter says:

    Yang should also be aware that this is one of Trump’s malicious policies to screw up as much as he can while he can. There are a number of versions of the story on the web about the recent Ag Dept. Brain Drain, this one is from TPM…

    The journalist Michael Kinsley famously defined a “gaffe” as when a politician tells the truth. Mick Mulvaney seems to have gone and told the truth this weekend.
    At a GOP fundraiser back home in South Carolina on Friday, the White House chief of staff celebrated a decision announced recently by USDA Secretary Sonny Perdue.
    Hundreds of government economists and researchers based in Washington, D.C., the secretary said in June, were being given a choice: Move to Kansas City, or get out. They had 33 days to decide.
    “Guess what happened?” Mulvaney asked his audience. “More than half the people quit.”

  9. 9
    rikyrah says:

    This is but one reason why Yang is a muthaphuckin’ non-factor to me😠😠

  10. 10
    rikyrah says:

    @Katdip:
    Only Maddow has given this story the attention it deserves 😠😠

  11. 11
    rikyrah says:

    @Scamp Dog:
    Not just BLM, but also our scientific community too.

  12. 12
    Gretchen says:

    Half of the people being sent to Kansas City are quitting. They have a month to move and the govt hasn’t even chosen office space yet. This is a huge, spread out metro area of 8000 square miles and they have to choose housing before they know if the office will be 50 miles from home. And there is no public transportation to speak of.

  13. 13
    Chyron HR says:

    Why is thE GoVErnmENt LOCATEd in ThE CaPItoL?

  14. 14
    AliceBlue says:

    @Jay: After reading about the raids in Mississippi, this Anne Frank quote was the first thing I thought of.

  15. 15
    Chris T. says:

    If this were implemented differently, would you say that this could (eventually, perhaps) help Kansas City, through that kind of positive feedback? If so, how would it need to be implemented so that it helps? It’s clear that this implementation is meant purely as a wrecking ball.

  16. 16
    kindness says:

    How does Yang have 2% in the poles? Are we really a Boaty McBoatface nation?

  17. 17
    Baud says:

    @kindness:

    Anti-establishment young people, I assume.

  18. 18
    MisterForkbeard says:

    Yep. This is the sort of thing that makes me think that Yang really doesn’t know what he’s doing and needs to drop out.

    @kindness: Anti-establishment young people. Yang is also being pushed by some of the ‘chans. But then, even 2% is basically a rounding error, and he doesn’t get that in all polls. The rules for the next debate should have been 3-4% or 2% in several sustained polls, not just two polls.

  19. 19
    TenguPhule says:

    Dispersing the vast majority of the DC/Baltimore/NOVA government management and analysis cluster that has been built up over four generations is a great way to make the federal government less efficient and less attractive to top tier talent

    Feature, not a bug for Republicans.

  20. 20
    jl says:

    ” relocate Federal agencies that don’t need to be in DC to other parts of the country. ”

    The phrase ” don’t need to be in DC ” is doing a hell of a lot of work there. My guess is that this is meaningless boilerplate designed as a gesture of passing agreement with the dishonest Trump policy of damaging federal agency research by moving them around the country.

    A lot of federal agencies that should be distribute around the country are already distributed around the country. Are all USGS, Army Corps of Engineers offices in Washington DC? No they are not. Are all federal energy and agricultural research stations in DC? No, they are not. Is main office, (or campus is better word?) of the CDC in DC? No.

    Most of the USDA research that is done in DC is statistical analysis of data, or international data, some of it export import, some of it climate, some of it international trade, forecasting. They should be close to other statistical and research agencies that work on data. So, DC, NYC, area is fine.

    What field work do they do? Can they help with corn or soybeans out in the Midwest? Can they help with water conservation for tree crops in CA or what CA almond farmers are going to do now that Trump has nuked pretty much all Chinese ag export markets? I don’t think so. Plenty of agricultural extension offices have the expertise needed, that are funded by state and feds. And, hey, guess what? They are already in NE, CA, WA, GA, IA, etc.

    it’s all humbug, both from Yang and Trumpsters.

  21. 21
    The Moar You Know says:

    If this was a good – and workable – idea, does he not think Google and Apple would already have done it? I’m sure they’d both rather be paying Iowa salaries rather than Menlo Park.

  22. 22
    TenguPhule says:

    @kindness:

    Are we really a Boaty McBoatface nation?

    Do you even have to ask when one of the prime concerns about Iowa caucus voters is whether the candidate qualifies to eat a fried cheddar bacon stick?

  23. 23
  24. 24
    Jay says:

    It's been five years since Ferguson & I think a lot about how much the public discourse on racism has evolved since. There are a range of factors contributing to that, but we owe a lot to the protestors there who pushed this country to reckon with things it long tried to avoid.— Clint Smith (@ClintSmithIII) August 9, 2019

  25. 25
    Brachiator says:

    I don’t know. The locations of state capitals have been selected for reasons that made sense in the 19th century, but don’t make much sense today, and works against efficiency.

    I don’t automatically endorse Yang’s idea, and note Trump’s bad version of it, but it may be worth thinking about.

  26. 26

    @jl:

    it’s all humbug, both from Yang and Trumpsters.

    You forgot to tell those damn kids to get off your lawn.

  27. 27
    TenguPhule says:

    @Baud:

    Also, too, excessive dispersement of federal agencies ends up making them less accountable to political leaders

    I think you seriously underestimate the political leaders.

  28. 28
    Gozer says:

    Yang should STFU and the experience of the last, say, 30 years should permanently put to rest the attempts to graft management culture and “optimization” on to government operations.

  29. 29
    TenguPhule says:

    @🐾BillinGlendaleCA:

    You forgot to tell those damn kids to get off your lawn.

    Don’t forget your onion.

  30. 30
    Chyron HR says:

    @kindness:

    How does Yang have 2% in the poles?

    He’s one of the ones 4chan is pretending to back to fuck with the primaries.

  31. 31
    jl says:

    @🐾BillinGlendaleCA: Yeah, man, the Yang nonsense is the kind of stuff you get in your standard run of the mill BillinGlendaleCA comment. (the pix are great, though)

  32. 32

    @TenguPhule: Bacon…Cheddar… I fail to see a problem here.

  33. 33
    TenguPhule says:

    @Baud:

    The biggest problem with DC are the Republican politicians sent there by the red areas of the country.

    The problem is that they are sending their best. And they’re rapists, drunkards and thieves.

  34. 34
    RSA says:

    I work for a federal agency in the Baltimore/DC metro area, but a good 25 miles out in the rural countryside. Even that relatively small distance is enough to make it hard to attract good people.

  35. 35
  36. 36
    TenguPhule says:

    @🐾BillinGlendaleCA: Usually you’d want some bread to go along with that, not a just a whole log worth of nothing but cheddar and bacon.

  37. 37
    humboldtblue says:

    This is echoing some shit Mulvaney brought out earlier this week. Something along the lines of “send these Washing DC-based government workers to bumfuck Iowa and they’ll quit and that’s a great way to shrink wasteful government.”

    In fact, a plan similar to that has been introduced for BLM and according to the Public Lands Foundation, it’s yet another abominable idea from the GOP.

  38. 38

    @TenguPhule: I still fail to see the problem.

    I actually had bacon and eggs with cheddar this morning.

  39. 39
    Baud says:

    @🐾BillinGlendaleCA:

    Like it. Sensual landscape.

  40. 40
    Baud says:

    @Brachiator:

    He’s not talking about moving the capital. He’s talking about decentralizing the government.

  41. 41
    TenguPhule says:

    Scandal-ridden NRA head Wayne LaPierre digs in against gun control

    In the aftermath of the back-to-back shooting massacres in Texas and Ohio, the debate over gun control has returned to the National Rifle Association and its immense power to stymie any significant legislation on the issue.

    The man largely responsible for the NRA’s uncompromising stance is its decades-long CEO, Wayne LaPierre, who has been engulfed in turmoil and legal issues as he orchestrates the group’s latest effort to push back against gun control measures.

    Law enforcement authorities are investigating the NRA’s finances, and the gun group has ousted top officials and traded lawsuits with the longtime marketing firm credited with helping to shape LaPierre’s and the NRA’s image.

    LaPierre’s seven-figure salary, penchant for luxury clothing shopping sprees and reports that he sought to have the NRA buy him a $6 million mansion have drawn scrutiny amid allegations of rampant misspending.

    Ardent gun rights supporters have turned on LaPierre in recent months. Some are calling for his resignation and questioning how he can turn the tide against the push for more robust gun control measures after the Dayton, Ohio, and El Paso, Texas, rampages.

  42. 42
    humboldtblue says:

    And for seafood lovers, specifically oysters (not my cup of tea), a just-released study from UC Davis points at climate change having an impact on the development of juvenile oysters due to increased ocean temps, increased acidification and river runoff.

    Oysters are a $25 million business in California and Humboldt Bay is an excellent spot for oyster farmers to grow their stock. We’ve already seen the local fishing fleet nearly wiped out, commercial salmon seasons are under increasing pressures from environmental degradation and commercial crab fishing continues to struggle as warmer ocean temperatures create havoc.

  43. 43

    @Baud: Thanks, I was trying to do the same thing I did with the beach scenes with the lifeguard stations and get some stars in the shot. We were just waiting around for it to get dark enough to photograph the Milky Way and other stuff.

  44. 44
    Jay says:

    @Chris T.:

    The BC Liberals (our conservatives) did this here, 20 years ago to pander to the rural vote.

    They tried to do it “well”, but it still failed big time and the relocated Ministries have never recovered. P2P “partnerships” filled the gaps created, so policy is now heavilly corporatized.

    You don’t get all the education needed to work at even mid levels of a Ministry to work in Prince George, and what does your spouse do in Prince George. So instead of “revitalizing” rural centers, talent left BC in droves and has never come back.

  45. 45
    Jay says:

    Here's a list of Tucker Carlson's current advertisers.We just added @vroomcars as they've been running ads lately, well after dozens of companies fled when Tucker said immigrants make America "dirtier and poorer" & now his white supremacy comments:https://t.co/rSFO3idHrb— jordan (@JordanUhl) August 9, 2019

  46. 46
    PJ says:

    @Brachiator: How would moving the capital of the US, or the federal agencies currently located there, make anything more efficient? Would sticking any agency in Des Moines, or Butte, or St. Louis, somehow make it more efficient? Or (the more pertinent question for citizens), would it somehow make the government, or the services it provides, better? Yang doesn’t begin to ask this question, let alone answer it, and we know that the Republican answer is “no, it will make them worse, which is what we want.”

  47. 47
    Jay says:

    I would’ve liked for my @CJR debut to have been on just about anything else, but such is 2019. This is the story of how an attack by FOX’s top white supremacist propagandist—and my “activist stance”—cost me a @nprmusic freelance gig I’d had since 2011 https://t.co/Ln1QsjK4k3— Kim Kelly (@GrimKim) August 8, 2019

  48. 48
    Fleeting Expletive says:

    Back to lesbian time travel for just a moment (that’s my best sentence so far today for sure!): When the OP mentioned that these stories were coming out in 2016 my mind went to a different set of questions about genders and what not. A future where HRC doesn’t win, toxic masculinity blooms, to where it has to be excised. Not so much lesbian as a new exploration of the reproduction imperative via new adaptations*. Genders plural, not even a spectrum which would imply linear progression, more like a scattering, ever changing pattern of colors and new patterns, less a rainbow than the irridescence flowing on the surface of bubbles. Add some future, mine the past for direction, and there’s your story maybe. Or not, just rambling.

    *Like the really mind-blowing creatures that live in deep ocean waters with evolution’s most creative innovations.

  49. 49
    L85NJGT says:

    The eternal political appeal of idiocy masquerading as “common sense” 80% of federal employees work outside of the DC metro, and inside skews heavily DOD.

    This won’t save any money, make VA red, KS blue, or restore the economic glory of St Louis.

  50. 50
    J R in WV says:

    @Baud:

    In addition, it makes it much more difficult for people dispersed around the continent to combine on special projects that may require a wide variety of expertise, if such expertise still exists within the government.

    Of course, the intent of the Republicans is to do away with expertise, so they can govern by their despicable gut.

    I suspect there will be lawsuits to prevent this arbitrary and capricious action from being implemented, since Mulvaney has stupidly admitted to the news media that the intention is criminal, to induce employees to quit whom cannot be legally fired. Not to mention neglecting to procure office space prior to making the move!

  51. 51
    David C says:

    And where does corporate attorney/financier Andre Yang live? According to Wikipedia, NYC. Hmmm… What does NYC have that Boise doesn’t?

  52. 52
    NotMax says:

    OT.

    Font change on post tiles or just FYWP mucking about?

  53. 53
    Jay says:

    Because Gebert as "Coach Finstock" produced such a huge amount of propaganda, there were things I missed on the first pass. Here's one. He appears to brag about helping European fascists skirt immigration laws in March of 2018. 😬 pic.twitter.com/lavwxe35yk— Michael Edison Hayden (@MichaelEHayden) August 9, 2019

    The doxxed but still getting paid Nazi at the State Department.

  54. 54
    Jay says:

    Walmart removing violent video game displays following mass shootings https://t.co/1JzgbI0yNR pic.twitter.com/eARCf8Mbtx— The Hill (@thehill) August 9, 2019

  55. 55
    Brachiator says:

    @Baud:

    He’s not talking about moving the capital. He’s talking about decentralizing the government

    I like Jay’s real world example about (presumably) British Columbia at note 44.

    Some state capitals are no longer located in places that promote efficiency or attract the best talent, but we live with it, or don’t even think it through. Yang’s idea might be wrong headed. Somebody should challenge him to think it through and respond to various objections. This is a mild diversion compared to the foul crap coming from the Trump administration.

  56. 56
    NotMax says:

    @Brachiator

    Short version response to Yang:

    Like Communism, sounds good on paper.

  57. 57
    jl says:

    @🐾BillinGlendaleCA: Nice pic, thanks. Lots of atmosphere. Where did you take it? Earth?

  58. 58
    CliosFanBoy says:

    a remarkably stupid idea. It’s not like people from different agencies ever need to work together (and no, video-conferencing is not the same).

    And, as was noted earlier, good luck getting good people. Who wants to move to small-town Iowa if their spouse can’t find a good job there?

  59. 59
    karensky says:

    Thanks, Dr. Anderson!

  60. 60
    waspuppet says:

    This was useful. Now I know Yang doesn’t know there are, to take one example, farms in every state in the country, and offices of federal agencies all over the country too.

    I wasn’t gonna vote for him anyway, but I’ll take this as a sign of how little he knows about anything he does, so with any luck I can avoid anything he gets involved in anywhere.

  61. 61
    Sergio Lopez says:

    @Baud: So just like Trump/Mulvaney?

  62. 62
    mad citizen says:

    @Brachiator: I agree with you. I don’t know the literature, but the problem is simply too much government. But I would drastically cut the homeland security/military industrial complex. There is a problem when something like 5 of the 10 richest counties are in the DC area. The country’s busiest Costco is Pentagon City, I believe.

  63. 63
    L85NJGT says:

    @Brachiator:

    States with small city state capitals and large metros have the majority of employees in the metro areas.

    @CliosFanBoy:

    Ethnic and religious minorities are difficult gets to Trump country.

  64. 64
    Procopius says:

    @Scamp Dog: I have dismissed Andrew Yang since I learned that he pronounces his name to sound like “yank” instead of as yahng. I still can’t bring myself to pronounce it the way he does. It’s one of the most common of the “old hundred surnames.” He’s really a fringe kook. How do people like him get so rich?

  65. 65
    randy khan says:

    Leaving aside the points that the OP makes, shifting federal agencies to other places means, even with a lot of planning and lead time, that you will lose a ton of experienced, expert workers. People don’t like moving when they have settled lives in one place, and a lot of them won’t. It would take a long time to rebuild that expertise even without considering whether people who are qualified would want to work in one of those places where the cost of living and the salaries are lower.

    Heck, when the agency I work with moved about 2-1/4 miles 20+ years ago, a good number of the people decided it was time to retire. (Granted, given DC traffic, it added up to half an hour to some people’s commutes.) The same agency is moving again next year, this time less than 2 miles, and I’ve been hearing about people who are planning to retire to avoid the move for the last year.

  66. 66
    Ruckus says:

    @randy khan:
    When I worked in OH the company discussed moving to CA because most of our related companies headquarters were located in southern CA, with one in the bay area. But the cost to the company would have been to give us comparable salaries would take 60% increases, mostly due to housing in the most likely area of moving. And to live in a less pricy area would take about a one hr drive, each direction. We stayed put.

  67. 67
    sam says:

    In addition to the losing of the expertise at actual agencies, this doesn’t even get into the absolute devastation this would do to second and third order employment that surrounds these jobs. What happens to retail and other support-related businesses that serve all of the people that currently live and work in the DC metro area who just…no longer live there? What happens to the school system when a significant portion of the tax base disappears? We may think that much of the DC media establishment is worthless, but there will be A LOT more journalists out of work if their jobs get relocated to Des Moines (or, more realistically, there just won’t be anyone actually covering whatever agency gets relocated to Des Moines), and on that front, what happens to our ability to be informed about what goes on in our government if the entire media infrastructure that currently covers the government (not the white house press corps, but the daily grinders that do actual work) need to suddenly figure out how to disberse themselves around the country to 100 different places while budgets and newsrooms are being cut all over the places already?

    Sorry, but this whole fucking thing just makes me so mad I had to delurk to chime in.

  68. 68
    What Have The Romans Ever Done for Us? says:

    As a federal worker I find Yang and (even worse) Mulvaney’s comments depressing, because they betray a complete misunderstanding of what the federal bureaucracies do, who they do it for, and why they are located where they are. We’re here to carry out the orders of Congress and the Executive Office – i.e. the POTUS. There are legal and ethical limits on what we can and will do but within those constraints that’s what we do. Given that elected officials are one of, if not our most important, primary clients, it makes sense for us to be where they are, which is the nation’s capital. We brief the executive office and Congress regularly on our activities, provide expert advice and information on various issues under our purview, affect the orderly spending of funds appropriated by Congress, and engage in the activities – including regulatory activities – that Congress and the President have ordered us to engage in via legislation.

    DC is no different or “in it’s own bubble” than any other metro area. Federal Bureaucrats are, by design, largely unplugged from political wheeling and dealing. We’re not the swamp, we’re not beholden to special interests other than through Congress and the POTUS, who most certainly are. We’re not out of touch with our constituents because of where we are. I grew up in the Midwest and if they want to move me back there fine…but next time they need an answer to a question ASAP!!! they better think about how much more trouble it might be to find someone to give them that answer if that someone is halfway across the country rather than down the street. I mean, Yang has never been in government so I guess I don’t expect him to understand all this, maybe, but Mulvaney is being willfully ignorant about our relations to his ilk. When they need info from that office they’re moving to Kansas City for lolz, it’s gonna be pretty funny when they can’t get someone on the phone. I know they don’t always like the info and maybe think the lobbyists know it all, but you know, that’s just not the case. E.g. Monsanto may spin a good tale about how great something they want is for the U.S. economy and consumers, but this USDA office might be able to tell you that what Monsanto is omitting from their push is that thousands of farmers would be screwed over by what they want to do…and if you want farmers to vote for you maybe you want that information, even if it’s inconvenient or conflicts with your ideological bent. They’re cutting off a prime source of information and expertise by doing this. It’s so short sighted and stupid, but that’s a feature I guess.

  69. 69
    CliosFanBoy says:

    @What Have The Romans Ever Done for Us?: and EVERYONE lives in a bubble. Why is my bubble, in highly-educated northern Virginia, somehow less grounded in reality than some small town or small city in the midwest?

    If you want to eliminate the influence of bubble-dwellers who do not know what the majority of people in the country worry about, don’t depopulate DC, end the monetary influence of the 1%. My house in Fairfax County may cost a lot more than my cousin’s in Beavercreek Ohio, but we still both worry about paying to have the furnace replaced or will it last one more season, and who has time this week to get the car’s oil changed, and WTF is driving the price of meat up this week at the store. It’s the 1% who have multiple yachts and can fly their teenage daughter to Europe for an abortion if need be who are out of touch..

    OK, I don’t know what it’s like to live in Big Stone Gap VA, where the coal jobs disappeared. They don’t get why I don’t want my kid’s school to allow guns on the property (a real example, “but what if they want to go hunting after school?” For what? Deer on the Beltway?) But if we listen to each other we can “get it.” It’s the people making policy who think $500,000 a year is a middle class wage who do not “get it.”

  70. 70
    low-tech cyclist says:

    A totally unrelated thing about Andrew Yang: his approach to the climate issue is that it’s too late to do anything about it, so just give everyone in the U.S. several thousand dollars to relocate somewhere less affected. Meanwhile, rich people like him will have millions and billions to move to more hospitable locations and insulate themselves from the effects of climate change.

    It’s basically the libertarian approach, with just enough of a sop to hide that fact.

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