The economics of the newest blue state.
 | | A Biden supporter waves to cars near Freedom Park in Atlanta on Nov. 7.Audra Melton for The New York Times |
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Today’s column was mainly about the political implications of Joe Biden’s apparent win in Georgia. I did mention, however, that one crucial piece of background was the rise of greater Atlanta; having a big, highly educated metropolitan area inside its borders tends to turn a state blue. And in my email to you today I want to take a break from politics to talk more about the economics of big metros in general and Atlanta in particular. |
As some readers may know, economic geography — the study of where stuff happens, and why — is actually one of my academic specialties. When I did most of my work in the area, mainly during the 1990s, I was especially concerned with the reasons economic activity often tends to cluster in a relative handful of locations. |
What I didn’t realize at the time was that we were already in the early stages of a new wave of geographic concentration. The old industrial economy was in decline; a new knowledge economy was on the rise. And knowledge industries wanted to locate in places with an abundance of highly educated workers. |
This set in motion a process of economic divergence. Big metropolitan areas rose at the expense of rural areas and small towns; as highly educated workers moved to the big cities, their economic advantage grew, bringing in even more industry and educated workers, while large parts of the country were left behind. |
Atlanta was one of the big winners in this process. But what’s the secret of its success? |
Growing cities typically have a “core competence.” Even though most people in any city do pretty much the same things as people in other cities — they provide health care, or retail services, or car repair — part of each city’s work force concentrates on a set of related activities that distinguishes it from other cities. These are activities it’s particularly good at, and the very concentration of those activities is why it’s good at them. |
Some examples are obvious: These days New York’s economy centers on finance, the Bay Area’s economy centers on information technology, and so on. |
Atlanta’s core competence is less obvious at first glance. Its big companies include Home Depot, UPS, Delta Air Lines and Coca-Cola. What do they have in common? The answer seems to be logistics: getting people and things to the places they’re wanted. A lot of that advantage in logistics seems, in turn, to both grow out of and reinforce the status of Atlanta’s Hartsfield-Jackson Airport as America’s biggest air hub. |
But this seems fairly prosaic compared with, say, the glitzy high-tech of Silicon Valley. So why has greater Atlanta grown much faster than America’s most famous technology cluster? |
The answer is also prosaic: it’s mostly about affordable housing. Atlanta suffers much less than coastal cities from the NIMBYISM that blocks construction of new residences. As a result, while the price of houses in the Bay Area, adjusted for inflation, has risen almost 80 percent since 2000, the real price of housing in Atlanta is basically unchanged. |
And there’s a lesson here — not just about cities — but about economic success in general: the fancy high-tech stuff may grab our attention, but it’s often the humble details that make the biggest difference. |
It’s true that Atlanta suffers from excessive sprawl and lack of public transit, which among other things makes it hard for residents of poorer neighborhoods to get to jobs. But that issue — and the ways cities could combine higher density with affordable housing — is a subject for another day. |
The point for now is that in an America politically divided between dynamic metropolitan areas and lagging hinterlands, Atlanta has put Georgia on the side of the new economy. |
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