Last week Richard Florida found himself defending his research from an amusing little pissing match started by Joel Kotkin. The argument was over whether “creative class” metros drive the economic engines (Florida) or whether suburban sprawl has it all (Kotkin). Florida himself dubbed this dustup Flo-Ko. So instead of looking at just which areas are the most “economically advantaged” (a PC way of saying loaded with rich bastards), he addressed X’s objection and decided to subtract out the cost of housing from the index.
What’s left is a disposable income advantage index of the 20 metros with the most money left over after paying the housing nut. And, you guessed it. Silicon Valley, as represented by the MSA called San Jose-Sunnyvale-Santa Clara, is totally first on the list. Let’s take a gander at the top five.
|Rank||Metro Name||Income after Housing: Month||Income after Housing: Year|
San Jose-Sunnyvale-Santa Clara, CA
|4||San Francisco-Oakland-Fremont, CA||$3,342||$40,104|
New York was Lucky #8, Seattle came in at Less Lucky #13 (right behind a couple of Connecticut metros), and Philly brought up the bottom at #20. This scatter graph shows how the housing costs versus income data looks, and that’s Silicon Valley in the extreme upper right. You should see datapoints labeled as you hover over them.
What makes a metro have so much disposable income? There’s a high correlation between number of knowledge worker jobs (that creative class thing again), at 0.73, high incomes (0.60) and number of college grads (0.53).
Inotherwords, Florida 1, Kotkin 0. x1000.