Interesting op-ed on the Wall Street Journal by Enrico Moretti about job creation in the US and the different multiplier effects of booming sectors.
"The American labor market is recovering from a painful recession. But the
recovery is geographically uneven. While some parts of the country are booming,
others are still stuck in a deep recession. Two groups of localities have been
doing particularly well over the past two years. Both are supported by
fast-paced technological progress, but one has by far the bigger jobs-multiplier
effect.
The first group includes cities endowed with a large number of highly
educated workers and innovative employers—places like San Jose, Calif.; Seattle;
Austin, Texas; Raleigh, N.C.; Washington, D.C., and Minneapolis. The recession
had less impact on these areas, and job growth has been brisk since the recovery
began, thanks to sectors like the Internet, software, digital entertainment and
biotech.
....
The second booming-economy group includes areas endowed with oil and
gas—Oklahoma, parts of Texas, New Mexico and Colorado. Here too the labor market
is thriving thanks to technological innovation such as fracking, horizontal
drilling and computer-based seismic imaging. The most striking example is
western North Dakota. Like San Francisco, this area is becoming a magnet for
workers attracted by raising wages and seemingly insatiable labor demand.
Despite some current similarities, these two groups offer vastly different
models of economic development and their fortunes are likely to diverge in the
long run."
