City Life and Remote Work: Matthew E. Kahn
July 14th, 2022
“I do believe work from home will be good for America.”
Matthew E. Kahn is Provost Professor at the University of Southern California and the author of six previous books about environmental and urban economics issues. His latest book is Going Remote: How the Flexible Work Economy Can Improve Our Lives and Our Cities. We discuss the future of our cities and the future of work--whether that's remote or in person.
The pandemic revealed a new geography of economic opportunity. Some jobs that were only in person before are now possible remotely, which could be good for working mothers or for those who might want ready access to the outdoors. Cities could transform into places that are more attractive because of the lifestyle as opposed to the job opportunities. Matt also wonders if working from home will lead to more life satisfaction, less divisive politics, and more civic engagement.
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Credits:
Host: Mila Atmos
Guest: Matthew E. Kahn
Executive Producer: Mila Atmos
Producers: Zack Travis and Sara Burningham
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Matt Kahn Transcript
Mila Atmos: [00:00:00] This episode is sponsored by the Jordan Harbinger Show, a podcast you should definitely check out. I enjoy the show and I think you will as well. Search for the Jordan Harbinger Show. That's Jordan H A R BINGE R, in Apple Podcasts, Spotify or wherever you're listening now.
Mila Atmos: [00:00:22] Welcome to Future Hindsight, a podcast that takes big ideas about civic life and democracy and turns them into action items for you and me. I'm Mila Atmos. And today's big idea is the future of work and the future of our cities. I'm speaking to you from a studio in midtown Manhattan today, a part of the city that has been transformed by the pandemic. Midtown used to be the bustling commercial core of New York City. Throngs of office workers would spill out of the subway, fast-walk to high rises, cram into elevators, and slump in their cubicles. Day after day, lunchtime deli counters were ten people deep and happy hours were swamped. And then COVID and the white-collar workers stayed home. And the only folks you saw in Midtown were in scrubs, wearily walking to or from the hospitals. That was the acute phase. Two years later, as I sit here in the studio in Midtown. We are in a different phase now, but we haven't totally sorted out what it is, what it means for our cities, and for civic life. Today's guest is going to help us figure all of that out. Matthew E. Kahn is a provost professor of economics and spatial sciences at the University of Southern California and focuses his research on urban and environmental economics. His most recent book is Going Remote: How the Flexible Work Economy Can Improve Our Lives and Our Cities. Matt, welcome to Future Hindsight. Thank you for joining us.
Matt Kahn: [00:01:59] It's great to be here.
Mila Atmos: [00:02:00] So I think to start, how in your mind has work from home
redefined work?
Matt Kahn: [00:02:07] So a silver lining of the horror that we've lived through is this experience-good effect that we have collectively experienced. Those of us privileged to be able to work from home, we've imagined and we've experienced what our life can be like when we don't trudge to work every week day. And so my new book is trying to think about in our post-COVID future, fingers crossed, how we have the win-win of
community at work, but new opportunities at home with family and friends when we don't commute to work every day.
Mila Atmos: [00:02:42] So in this land of opportunity and you're an urban economist, what does it mean for cities?
Matt Kahn: [00:02:48] A theme of my work has always been that cities with great quality of life, that the mayor can sleep well at night because people will want to be in that city. And so a key idea that I want my few readers to be thinking about in my book and the many listeners to your podcast is those cities that lean in and improve their quality of life, that these cities will be just as desirable as before the pandemic, because cities have always had two features. We've gone to work in cities and we've plated cities. Going forward, I think cities are going to be more what economists call the consumer city, the civic city, of having fun in these places versus being our epicenter of work.
Mila Atmos: [00:03:30] Yeah, I mean, I live in New York City in large part because of all of the things that New York City has to offer. Right. There's culture there, museums there, there's dance, there's opera. There are all these things that I love to take in. I'm a huge lover of the performing arts, and so I think it's always fascinating and exciting to live here. So before we get into the nitty gritty of the theme of our episode today, I want you to tell us a little bit about why you wrote this book.
Matt Kahn: [00:03:59] When the pandemic hit in March 2020 and I went home--I had been teaching at Johns Hopkins--I went back to Los Angeles. My son returned to our house from the University of Chicago, very frustrated to come home. I am always thinking about silver linings, Mila. When I was a young professor at Columbia University, I wrote a paper on the silver lining to cities like Pittsburgh when they de-industrialized. My mother had said to me, "Matthew, isn't it horrible that we're losing manufacturing jobs in the Rust Belt?" And I wrote a paper on the silver lining of Rust Belt decline of the cleaning of the air and water in cities like Cleveland and Pittsburgh. And so I started to think about in the midst of the pandemic, what would be the silver lining of what had been unleashed, that we had to adapt and learn to work from home? And I started to think that, of course, the horrors of COVID are real, but of the long run benefits to our nation going forward. And that was the beginnings of dreaming up my new book.
Mila Atmos: [00:05:00] So you said in the beginning of this conversation that remote work has a number of benefits like increased productivity, let's say greater flexibility for parents and caregivers, that you can, in fact, do the work remotely. You don't have to trudge to work. But it does keep us away from one another. And people do bemoan the loss of, you know, the watercooler moments. And I think that we, society at large, needs those moments like, you know, the everyday small conversations where we make a human connection, the physical public square, if you will. What, in your view, is the effect of remote work on civic life?
Matt Kahn: [00:05:38] So in the book I talk about Robert Putnam's Bowling Alone. His work has greatly influenced my thinking, and I have had the chance to get to know him a little bit. We only have 24 hours of the day and we were commuting too much in our recent past. And so when we're not commuting as much, what do we do with that time? I think I'm going to be doing more chores. I've already been doing more chores. Am I more engaged in my residential community? Am I more engaged in my children's life? Where you're absolutely right is at the modern workplace, at a Google, at an Amazon, will the firm have less esprit de corps? Will people know each other less well? Will there be less serendipity? If I'm a manager at one of those firms and I anticipate that younger workers aren't being mentored, I will reward the middle-aged mentors who lean in to mentor the young. We will have casual Fridays at a bar to have more of this informal give and take between coworkers to build up the social capital, which we might have been taking for granted when we went in five days a week. So something I'd ask you to think about is if middle management is aware that there is an emerging social capital gap at work, they can take proactive steps to build this up. If we're going into work less, we can have quality over quantity of when we go to work to the mothership of making the most of it. But I think we're going to build up social capital in our residential communities of people being more engaged in the traditional economy. "Men went to work" and please put all these words in quotes. Will they now be more engaged in their residential community because they're going to be there more as they'll be working more days from home?
Mila Atmos: [00:07:16] That's a good question. I don't know if men will do that, but that, you know, brings me to this next question, which is, you know, the greater flexibility of remote work really offers a lot of opportunities for parents and caregivers. And I want to
talk about women specifically and remote work. Do you see remote work offering an opportunity for greater equity for women? And if you do, how -- and I want to make sure, you know, like I'm asking this question because of course, our ability as women to participate equally in the workplace has had also profound implications for our place in civic life.
Matt Kahn: [00:07:54] Agreed. Claudia Goldin of Harvard, her work on the gender gap has greatly interested me in her work. She emphasized that in the past, many women chose to be schoolteachers or to work as pharmacists because these offered flexibility, you could balance work and family life. While those are fine occupations, that's limiting. It didn't offer the full gamut to many talented women with ambitions outside of those fields. A hypothesis in my book which might be false is that work from home will open up new possibilities for people of both genders staying Home with kids. An example: if you only want to work 4 hours a day because of commuting, that used to be impractical, but with work from home, almost like an Uber driver doing a small shift, you can stay involved with your firm and work part time on your terms, during key times when children are small. Mila, I would add to that that if firms anticipate that workers are not going to opt out of the workforce and are going to stay involved with the firm, at least on a part time basis. The firm will keep mentoring them. And so an idea in my book is in the past we were in a bad equilibrium. That mentors at firms perhaps stopped mentoring young women, anticipating that they were going to leave and because they stopped mentoring them, that actually accelerated their leaving. I optimistically posit and I'd like to hear your reaction, that because of the rise of work from home, firms will continue to invest in mentoring young workers and won't make any assumptions about them opting out. And this will actually lower their propensity to opt out, and this will help to close the gender gap. In a diverse population, this can be true for some segment of women.
Mila Atmos: [00:09:38] Right. I think it's definitely true for a segment of women. I would say I briefly worked part time. I used to work full time on a trading desk and those were crazy hours. I worked something like 12 to 13 hours a day, and when I stopped doing that, I had a child. I worked part time. And the part time job was in many ways very rewarding, but in other ways it was really not worth the cost benefit, you know. Meaning they were paying me so little and my responsibilities as a part time worker, this is actually I don't know how other women feel about this, but, you know, as a person who is well-educated and who's had a real career, a full career on Wall Street to do this job
and, you know, not to make it sound like it was a bad job, but it was the kind of thing where I thought, well, for this amount of money and this kind of responsibility, I'm getting so little reward in work in, you know, having the satisfaction of doing real work that it wasn't worth it for me. I would rather be at home with my children. And so I don't know how other women feel about this, but I thought at the time for me to be at work with young children, I would need a full career. I need to be on the track to become a partner or otherwise. I'm not doing this.
Matt Kahn: [00:10:55] I greatly respect your point. I would add that there are new firms. One example is Upwork. What Upwork is doing is it is a matching firm on the internet and they match you with employers in tasks you want to do, and then they take 25% off the top, a little bit like Uber. What this does is it allows you, if you have specific skills or passions, it allows for increased interesting opportunities on the Internet. And so this would be a different path for people who want to work from home, who don't stick with their original firm. And so in some sense, work from home, work from anywhere is taking many different permutations to celebrate our diversity.
Mila Atmos: [00:11:34] I definitely see that. I mean, I think there are many opportunities in remote work, right? And so whatever your skill set is, you can hopefully find a way to make that work. But Upwork is also a little bit, a little bit like gig work, meaning that it doesn't have the pay and it also doesn't have the prestige that often people do seek when they're working, you know?
Matt Kahn: [00:11:58] So the proof that you're right is I put an ad on Upwork for myself as an economic consultant, and I put a very high salary and the demand was zero.
Mila Atmos: [00:12:07] Okay. Thank you for sharing that. Well, to stick with the women a little bit, there's a question also of many feminized areas of work, for example, teaching and nursing. And you mentioned teaching before. And a lot of women do these jobs, right, but they cannot do them remotely very successfully. I mean, you can teach remotely, but I think that's really not that great. If you're an elementary school teacher, it's not impossible. But my aunt is an elementary school teacher and she said, it's really impossible. It's so hard. The students don't pay attention. They are too young and a lot of teaching has to be done in community.
Matt Kahn: [00:12:44] I agree with you. And so a theme I discuss in the book is my my editor turned to me and said, "Matt, there's many interesting ideas in the book, but is this an elitist book such that because more educated people tend to work in industries and occupations that are work from home possible." And what I said and what I believe is with the rise of work from home, people are going to be more footloose. If Manhattan declines in quality of life, if Eric Adams doesn't succeed with his efforts to improve quality of life, work from home workers are going to split. They're going to move to a Poughkeepsie. They may move to a ski resort. Cities are going to have to raise their game to keep footloose workers. But many workers have skills. They're in construction. They work in the service economy that they're not directly working in the work from home economy. If Matthew is a school teacher and if enough work from home families move to a ski area, there's going to be new schools at that ski area. And if I'm a teacher who loves to ski, then there's a new opportunity for me. So. So, Mila, you are absolutely right that this face to face service economy is going to continue. But in the past, you needed to be in San Francisco, Boston, New York. If the work from home workers start to spread out because of family responsibilities or passions for amenities, this will create new opportunities for face to face workers to go along with them, sort of like moons around a planet. It's sort of a gravitational pull, if I can make a bad analogy.
Mila Atmos: [00:14:18] Oh, it's a good analogy. But so let's, let's turn to some of these, you know, second order effects of remote work. You know, you mentioned that people can move to ski resorts. And so I'm thinking, in fact, about, let's say, Jackson Hole, where remote workers are actually distorting the housing market and service sector workers are placed out and some of them are sleeping in their cars because they can't find housing. Or in Nantucket, I heard three restaurants closed because they cannot find housing for their staff. So what's, what's the free market approach to that?
Matt Kahn: [00:14:52] So this is a very, very important question. What my colleague, Ed Glaeser of Harvard has argued is there's been something elitist in America that in our most beautiful cities, in our most productive cities like San Francisco, New York and Boston, and now Jackson Hole, NIMBYism means we're not building housing. And so Mila, from my favorite subject, Econ 101, I want all of your listeners drawing supply curves to demand curves. If demand soars and it increases in an area where we don't build housing, you're right, prices are going to soar. And so a key issue to economists is how do we encourage local incumbents who live in places to welcome new blood to
move to the area, to allow real estate builders to build. Las Vegas has allowed for development, and a more sophisticated city has emerged than what the mob was building in the 1950s. And so Joni Mitchell talked about "we paved paradise and put up a parking lot." We need to balance our environmentalism with actually allowing new blood and allowing development to take place. In some Asian cities that I visited; Singapore has figured out how to retain quality of life while building up. I'm hoping that America will allow for more housing density. Why is America solely zoned for single family homes so often? Why haven't we built more multifamily housing? And so in these beautiful areas that you listed, there's going to be gentrification if we don't allow developers to build multifamily housing. And I agree with you, that's absolutely essential.
Mila Atmos: [00:16:31] I kind of want to circle back here to your paper about Pittsburgh. Did you address the housing question there? Because, for example, in New York, in Manhattan, right, in Midtown is like a ghost town right now. A lot of office buildings are empty. In the meantime, we definitely don't have enough housing. And rents have gone up, I think 80%, 70% in some areas of the city and people are being priced out. And so when it comes to NIMBYism, is it simply a question of zoning that we can't convert, let's say, old office spaces into apartments? Or is there something else?
Matt Kahn: [00:17:07] So you nailed it. I am fascinated by this question of if you and I toured some commercial law buildings just north of of Grand Central Station, what would it cost to convert that into condos? I think that that's an excellent question. And when would the owners of these buildings pull the trigger on that? Mila, two different ideas for increasing our housing supply: purchasing adjacent single family homes, knocking them down and then building a six story multifamily housing there. That would be a way to increase our housing supply. Just as you said, converting commercial real estate into residential real estate. I want to see much more creativity about the future of our cities when fewer and fewer people are going to the city to work, but they want to live and play in these cities. So I think future mayors are going to need to allow the free market to be more creative. While recognizing Jane Jacobs' points about communities and neighborhoods, and small is beautiful, so some very Goldilocks issues are going to arise.
Mila Atmos: [00:18:10] Yeah, Goldilocks issues. That's a good way to put it. Well, this show, of course, you know, is a show about civic engagement. And so I wonder if we have empty and struggling city centers and desirable locations where the only option for the working poor is to sleep in cars, how can we build a healthy civic life out of that?
Matt Kahn: [00:18:28] So for two years I lived in Baltimore and I lived in the city center of Baltimore. I lived on a former Superfund site in Harbor East, which had been turned into fancy housing. I'm a big walker because of my bad eyesight and because I try to walk. And what would interest you about Baltimore is there were all these parking lots, so there was all this land being inefficiently used. If I can use an ugly economics term, it was being wasted. Let let me speak English. It was being wasted as parking lots. If America takes up automated vehicles and let's assume the liability lawyers, let us do this. Imagine a world where we have automated vehicles and don't need as many parking lots going forward. So many of America's cities have so many parking lots right now outside of Manhattan, Los Angeles is just filled with parking lots when you fly in. This land, that would offer a tremendous opportunity to the mayor to think about parks, to think about housing. Los Angeles has a homelessness problem. If you build new homes for the homeless in some of these parking lots, there's all sorts of ways to reimagine urban land, to reclaim downtowns, which traditionally had all this parking, as guys would drive from the suburbs to their center city job and park. And none of that has to be, going forward in a world of work from home and automated vehicles.
Mila Atmos: [00:19:51] Let's take a quick break to thank our sponsor, the Jordan Harbinger Show. The Jordan Harbinger Show combines in-depth interviews with some of the world's most fascinating minds, like lifelong journalist Anderson Cooper. You'll always learn useful advice from his heavy-hitting interviews. For example, Anderson Cooper shared lessons for navigating breaking news and establishing rapport with larger than life figures. And that's just the beginning. On Feedback Friday episodes, Jordan responds to listener questions about everything from conventional conundrums, like asking for a raise at work to doozies, like helping a family member escape a cult. Whether Jordan is conducting an interview or giving advice to a listener, you'll find something useful that you can apply to your own life, like learning how to ask for advice the right way, or discovering a slight mindset tweak that changes how you see the world. Search for the Jordan Harbinger Show. That's Jordan H A R BINGE R in Apple
Podcasts, Spotify, or wherever you're listening now. And now let's return to our conversation with Matt Kahn.
Mila Atmos: [00:21:00] Well, I have to say, I love your optimism. This is really great. I mean, you really are into city life and rebuilding city life. I want to ask you a political question. Isn't part of the issue beyond zoning also a density and urban population question about being underrepresented in our politics and suburban and rural voters are overrepresented.
Matt Kahn: [00:21:23] This is a very important question. My book editor rejected the following title from my book. I originally wanted to call it Musical Chairs, where we've built up all this housing and all this commercial space in Manhattan. And what I wanted my readers to think about is over the life cycle, I used to be young, I'm now age 56. I'm getting older. At different stages in my life, where do I want to live? At certain stages. I was born in the suburbs because I was getting beat up in the New York public schools of the 1970s. I taught at Columbia University as a young man and loved living in the city center. My wife didn't think that we could raise children in the city center on our incomes, and thus I moved to Boston and we lived in a suburb there. And so throughout one's life, where do you want to be? Do you want to be in the middle of the action or do you want to be somewhere quieter? On your point, what fascinates me about your point is the typical American lives in a metropolitan area and lives in the suburbs center cities like New York and Baltimore. Relatively few Americans live there and we see there's very few Republican leaders in these cities. These are hotbeds of progressive thought and it attracts people of a similar persuasion to live there. So Mila, a question. Are you a fan of Birds of a Feather flock together or does America lose something in terms of diversity if the stake-making people live at a Houston suburb and if AOC supporters live in a Brooklyn? Would we have stronger civic engagement if we were more diverse within our areas? We're very well sorted, is what I'm trying to say.
Mila Atmos: [00:23:04] Yeah, we are very well sorted. I don't know what the answer is to that question. I would think that, or at least this is what we say on the show, is that if we have more diversity within areas, within districts, that we will have more competitive races for our leadership.
Matt Kahn: [00:23:23] Agreed.
Mila Atmos: [00:23:23] And also then therefore we are really competing on the ideas as opposed to the personalities. So, you know, it will be less of a popularity contest.
Matt Kahn: [00:23:30] So that's very nice point. And to build on your point, because I didn't fully answer your question before. I appeared on a midwest radio show and one sophisticated caller said, "Matt, in a world where we can live anywhere. Red state, blue state are actually going to more thoroughly sort. That we're going to actually get a real in the bad language of economic separating equilibria because just birds of a feather will really flock together." And so an unintended consequence of the rise of work from home is we won't have that local diversity that you're a champion of.
Mila Atmos: [00:24:03] Yeah, I think that's true.
Matt Kahn: [00:24:04] So one hope of mine. Let's come back to my ski resorts and I know that this is a little contrived. If both red state and blue state people both love to ski, that if we could now live and work at a ski resort, that would lead to political integration. And so you're remembering that I'm an eternal optimist. So if people choose where to live based on recreational preferences, does that create a possibility of diversity? If both Democrats and Republicans love opera, does that lead to integration of neighborhoods? Because you can now live in the best opera town, even if there's no finance jobs there?
Mila Atmos: [00:24:40] Well, you could go to a red state ski resort or a blue state ski resort, but I think all the good ski resorts are in red states. So it's the kind of thing like in Utah or in, you know, Montana or in Wyoming. But Colorado is a purple state. Have you heard this plan that there was going to be an artist colony in Cheyenne, Wyoming. Built like an artist colony of 50,000 people there. And then basically they would overwhelm Wyoming, meaning voters wise, and would turn Wyoming from a red state to a blue state. And I thought this is a fascinating plan. I don't know if it'll work. I don't think it has worked or we would have heard about it. But all this to say when I first heard about it, which is now a few years ago and I'm remembering again, it really makes sense, perhaps this will make us mix and have more competitive races and more representation across all views.
Matt Kahn: [00:25:33] I think you're right about that. In my own nerdy peer reviewed work, we've found evidence that in high amenity places that didn't have many jobs in finance or tech, tech and finance people are moving to these places because you can now have the win-win of those amenities and still keep your piece of the action on, in a in a Silicon Valley or New York as you work from anywhere. But I love your point. I'm a fan of competition and I love the idea of... at the modern university, part of the free speech movement is an exchange of ideas. And I think the thesis you're advancing is can we build more trust if we're physically closer to people and to hear their arguments and to exit our echo chamber. I don't really discuss this in my book. So this is a weakness of my book of I argue that work from home will strengthen communities because it will address the Putnam social capital issue. I didn't spend enough time on whether we're face-to-face more with people who hold different views than us and will we use work from home to shelter ourselves from these individuals? And I think that's a very powerful question to ask, right?
Mila Atmos: [00:26:45] Yeah. I think I'm sure it's, it goes both ways, right. Depending on who you are. That some people will seek out more community and make community depending on what their personal propensity is to do this kind of thing. And there are some people who will shelter themselves and stay shut in. I mean, I know people who are now still basically not going out. And I think they may be don't have the same kind of longing to be among community in the way that some other people have.
Matt Kahn: [00:27:11] One other point I'd make there, and this is another and I'm always an optimist. My mother says to me, "Matthew, no magical thinking." Is if we have better balance in our life because of work from home, if we have greater life satisfaction, would that chip away at some of our political polarization? I don't fully understand the causes of polarization in this country, but if I can say something new age, if we have more life satisfaction and if we're happier with where we are, our role in our community, engagement with our family and children, would there be less anger? And if there's less anger, would red state, blue state, Fox News, MSNBC battles, could the situation cool it a little?
Mila Atmos: [00:27:54] That's a very optimistic proposition, and I hope that it's possible. I hope it's possible. Well, I have a question that is about whether we should go all in or all out. I think it's pretty important at this point to mention that this is not necessarily a
zero sum thing. Right. So most companies or organizations are not choosing one or the other. In fact, they're doing hybrid, meaning they're not all remote, they're not all in person. But what's your view? Should we go all or nothing? Or hybrid?
Matt Kahn: [00:28:24] Since I know that I don't know the answer, I have been talking to some companies about doing A/B testing here. Firms can use their big data. Have they had trouble recruiting and retaining young women? If the answer is yes, do they use the work from home approach to see if that improves their performance on metrics? And if yes, keep climbing the hill until you've optimized there. If there's a firm that feels it doesn't have, worries about diversity, that there aren't enough African-Americans working at the firm and rising, do you allow workers to live in a Baltimore and sometimes to show up at your mothership in Virginia or wherever you are and see if your diversity recruiting goals are better met? And so since I know that I don't know the answer to your question, I want to see this experimentation. And those firms that fail to experiment are going to get knocked out in capitalism that the competition between firms will mean that will quickly get to the frontier here.
Mila Atmos: [00:29:21] Oh, interesting. Well, since you just mentioned race, how do you think work from home will help or not help race inequities?
Matt Kahn: [00:29:31] So one example I talk through in the book is African-Americans being underrepresented in tech. The tech companies have traditionally been in cities like Seattle, San Francisco, and Boston were African Americans on average -- And we have to be very careful here -- on average, don't live in these cities. In a in a world where an ambitious, qualified African-American can live in a Baltimore, but then work at a mothership in another location, you have the win-win of not losing your cultural roots and your friendship networks while still ambitiously pursuing your career. And so I, as usual, I'm going to make an optimistic point that Baltimore would gain. Baltimore is a city with few tech jobs, a city, a proud city with a wonderful history and tradition. But the modern economy has not made a big investment there. If one could live in a Baltimore where housing is 75% cheaper than a Washington DC and work in an Alexandria, Amazon HQ2 headquarters, there's a nice synergy there. Now an issue arises concerning mentoring. If I were one of these young African American workers living in Baltimore, this better not be tokenism of Amazon saying, you know, look look at our numbers. And the win-win here is for Amazon to engage in quality over quantity. You
bring in the remote workers twice a month for intensive mentoring and to get to know everyone. And then as folks know each other through Zoom, you can stay connected. So you can work very well over Zoom with people you already know. But but if you don't have these connections, then you could feel isolated and it could feel like tokenism. And and so the proof is in the pudding to make this work.
Mila Atmos: [00:31:16] Yeah, well, I think for sure that's true. Young people have a harder time in networking on Zoom, you know, because they have not had the experience in the flesh. But to your point, this can be addressed. I think this works very well. My husband works in Midtown and half his office is not back. And what they do is periodically they go off-site and spend a long weekend together and they have meetings, they work, but they also play, you know, they hang out. So they have face-to- face time and I think that helps a lot. So we have been talking about the effect of work from home on some big dirty old cities like New York, Pittsburgh, Baltimore. But you're also interested in new cities. What are you imagining or predicting these to be? And how can they be built with fostering a thriving democracy and a healthy civic life?
Matt Kahn: [00:32:04] I love this question. Paul Romer won the Nobel Prize a few years ago in Economics and is a fascinating person. One of his ideas that he didn't launch is called the Charter City, and he would point to Shenzhen in China as an example of a charter city. And I've been to China ten times, but I've actually never been to Shenzhen. That that Deng Xiaoping created this area in what was a farming village and said capitalists in our communist nation, we're going to set up this place with new rules and let's see if it booms and Shenzhen turned into this world city very close to Hong Kong. And what economists celebrate here is if you could take a tabula rasa and if you said we're going to let this place have new rules and let's see if weeds grow or flowers grow. If I could mix up metaphors. So Paul Roemer's idea and I'm going to come back to work from home in a second, is for ten years, he tried to launch a charter city in the developing world. He hoped that a leader in the developing world would set aside a piece of land and would set up Canada's rules for that parcel of land and that a growth miracle would occur there. Now work from home. Cities like Baltimore have many young people who are not receiving a good education. And I conjecture that in -- I'm a fan of competition -- if new work from home communities pop up in the exurbs of our major cities in a Poughkeepsie in areas that is unincorporated land where we don't have current rules. If a new community could pop up and children need to go to school. And
policing needs to take place. We would run new experiments on how to educate people and how to police with dignity. And our major cities like Milwaukee, Buffalo, Baltimore, Cleveland could learn the lessons from these new communities that will form. So to say that one more time, because I'm mixing up 50 ideas. Work from home workers can go anywhere. If they choose to cluster in what had been a rural part of Ohio, they can form a new community there and new rules can be adopted there for policing, for transit, for entrepreneurship, and for for all these facets. And New York Times reporters can visit and write a story and say to the big city mayors, Why aren't you adopting their ideas? This is one of the themes in my book that we haven't launched enough experiments to learn what works of, there isn't enough imagination. And if I can say something rude, many urban public sector unions block such experimentation, and so I'm a fan of experimentation to learn what works. And if work from home creates new communities that try new rules, the brilliance of Paul Roemer's Charter City Idea will actually be piloted, and those children in Baltimore might in the future receive a better education. From the lessons we learn about education in the new work from home communities that launch new schools.
Mila Atmos: [00:35:05] Well, I like the idea of starting fresh because I think some of the problems that plague us really plague us because we have come up with Band-Aid solution after Band-Aid solution, which don't address the root problem. And often we cannot go back, right? If we had an opportunity to start anew, start fresh, this would be it. So. Well, I hope that somebody will start a new city. We'll see. I don't know if it will work in real life. So I'm going to ask this next question with an apology. And that is I can't believe I'm asking you this towards the end of our time here, when it really is top of mind. And its urgency, of course, cannot be overstated. But let's talk about climate change. The assumption has been that remote work is a benefit in terms of tackling climate change. Right, because we are not commuting as much. We are shrinking our carbon footprints. But is it a straightforward win? Like what are the costs and benefits here? And how should we be thinking about our cities and where we work as we move into the more acute phase of the climate crisis?
Matt Kahn: [00:36:03] This is an excellent question. There's two issues in climate social science. There's shrinking our carbon footprint. That's the mitigation challenge. And there is the adaptation challenge. Mother Nature is punching us harder. We know this. What steps do we take as individuals and as a society to reduce the very real threat of
these harder punches of Mother Nature? And that's the adaptation challenge. Mila, on mitigation, cities like San Francisco and New York have built up these great public transit systems and often geared to get us downtown at rush hour. If people aren't going in in the future as much and if they're not going in at rush hour, we've sort of overbuilt our public transit system because we assumed that people were going to do a Dolly Parton 9 to 5, five days a week, if we could sing that song together. And so if we decentralize, if people spread out, if people go remote with work from home, they're going to drive more. If we have electric vehicles fueled by solar panels, that's not a big deal. But if we are driving pickup trucks in a Bozeman, Montana. If you and your family moved to Bozeman and each everyone has their own pickup truck because everyone in Bozeman does drive a pickup truck regularly there, then our carbon footprint would increase if Jerry Seinfeld moved from Manhattan to Bozeman. And I've done work on that point. When we live at lower density, we drive more. And if we're not driving electric vehicles fueled by green power, then our carbon footprint increases. When we live in cheaper places, we buy bigger homes, and if it's hotter outside, it costs more to air condition those. And so that is one setting where work from home would increase our carbon footprint.
Matt Kahn: [00:37:44] I've argued, and you know what an optimist I am, if work from home workers spread out and move to communities where new homes are built, they're more likely to have solar panels. And if you bundle that with electric vehicles, you can actually have the win-win of living your life where you want to live, but you've just zeroed out your carbon emissions. So I just told two different stories for carbon mitigation and work from home. A final idea about adaptation. I mean, suppose that Matthew is asthmatic and that I have lived in Seattle because that's where my tech job is. The fires in the American West are getting worse. If I am highly sensitive to PM 2.5, I could move to a cleaner location if I'm asthmatic and work from home and still have my job. And so in my optimistic work about adapting to climate change, I've argued that we know ourselves and if we have the ability to decouple where we live from, where we work, people can move to a place that if you're very risk averse, you're not going to want to live in Miami in an area that faces sea level rise, of seeking out your own niche. Before we were talking about moving to a great ski resort. Now we're talking about moving to the top of a mountain. If you want to avoid sea level rise or moving to a very clean, pristine place to avoid PM 2.5 exposure. So work from home for those with the privilege
to work from home will have greater freedom to pick out a point on the map that's climate resilient for them.
Mila Atmos: [00:39:12] Well, so what's the cost benefit? Are we saying we should be working from home or we should not be working from home?
Matt Kahn: [00:39:19] So my mother often says to me, "Matthew, you know, what's your bottom line?" And I am too wimpy of a two handed economist to give such an answer. I've always been a little like the Riddler from Batman of pointing out intended and unintended consequences. You've known me for a while. I've never been brave enough to to add this up. And I do believe that work from home will be good for America, and I can be definitive there. Economists always think by counterfactual. In the year 2019, we had the following problem. We had a couple of superstar cities in New York, Boston, San Francisco and my Los Angeles. But because of local NIMBYism, housing was incredibly expensive and you had to live in these cities to get a job in these places. Even if you want to be a waiter there, you had to be next to the action to to to get a job there even if you didn't want to be there. On some level, that wasn't fair. An unintended consequence of our COVID crisis is a new geography of economic opportunity, where some people are going to spread out and this is going to create opportunities for many different places on the map and to accommodate our diversity. And so I do think work from home is a net win. You're right. You've pointed out a number of key issues. What will happen to civic engagement, what will happen to the infrastructure? We've built up these commercial buildings, this public transit. All of this is a work in progress. But I'm an optimist. If New York City can preserve its genius, young people will continue to want to live here even if they're not working on Wall Street, because the future of these cities will be as consumer cities and as a place to play. And we're an aging population. And so seniors and the young will actually have more opportunities in cities as 56 year olds like me maybe clear out to a Santa Barbara.
Mila Atmos: [00:41:18] Yeah. Yeah, I hear you. I hear you. Well, so let me ask you an economist question. What are two things everyday people can do to optimize work from home for our society? From a civic perspective.
Matt Kahn: [00:41:30] I'm a fan in the Biden administration's infrastructure bill. This access to infrastructure for everyone. When I was in Baltimore, this digital divide is a
very serious issue. So I do support the civic engagement of of access to a trusted, stable Internet. That wouldn't be a great bumper sticker, but I believe in that one. I actually need a prompt there. So what is your thinking on that one? I'm actually having a full senior moment thinking of a second one.
Mila Atmos: [00:41:56] What's the second one? To make work from home, work? You know, I would say if you are not commuting, then one thing you should do is get engaged in your local community. You know, I don't know if you're a religious person, show up at your church, your synagogue or if you have a school age child, volunteer for the Parent Teachers Association or participate in the bake sale, but really take part. Go and make time to go to City Hall for town hall meetings with your elected representative. Those are the things that I would be suggesting.
Matt Kahn: [00:42:28] I agree. And to pick up on one of the points you just made in the conclusion of my book, one point I make is our society is dynamic. If there's a family where neither of the parents are in industries and occupations where you can work from home, they will recognize that this is the future. What investments in school, in education could their children enjoy such that they'll be eligible? And so what point I make is will we see parents being more proactive in their children's education and in curricular reform and of of nudging for better education in the public schools, when there's this recognition of the opportunity that work from home workers have. I'm very concerned about expanding the access to work from home, because I believe that work from home is terrific for those who are eligible. I've argued that there's spillover benefits for those through the local multiplier effect of working in service jobs. But we need in a fair America where the American dream exists, if my parents were not work from home eligible, can I get a good enough education such that I can be eligible in the future? Because this can't be a 1% benefit. We can't live in that country.
Mila Atmos: [00:43:43] Oh, I agree. We could not live in that country. It does need to be widely accessible work from home. So here's my last question. Looking into the future, what makes you hopeful?
Matt Kahn: [00:43:55] So I discussed this with my son and with my undergraduates at USC. I talked to them about the time machine. If you get to live for 85 years. I was born in 1966 and I would be willing to pay to be born in the year 2022. So the time machine
gives a test of whether if you're willing to pay to get into a time machine to be born in the future, you're an optimist about our future. And that's a bit of a tongue twister. Despite the climate change challenge, despite the COVID challenge, despite the unusual circumstances in the rest of the world, the joy of being a college professor is there's always a new cohort of 18 year olds. And now I'm kind of like a grandpa. When I was first professor, I was their age, I was professor like Doogie Howser. But but but now I'm like grandpa, like, Fester from the Munsters. And with the young people, I see their optimism. And one can change the world through politics and one can change the world through ideas. And I sense their optimism. I don't think that they're on psychedelics of what's the root of their optimism. They're cautiously optimistic that they can change the world. And I think for a cynical old economist, it's very good for me to interact with these young people. And of course, there's doom and gloom when they think we're about to vote on a carbon tax, to build momentum, to solve our collective action problems. But they want to live their lives and they're excited for their future. And I sense that with my son. And that's the root of my optimism going forward.
Mila Atmos: [00:45:26] Hear, hear. I'm also optimistic because my son is very engaged and, well both of my sons are, but especially my older one. He's definitely raring to go and he is very invested in making sure that the climate will be habitable into the future. And so I think to your point, a lot of young people are, and I think that's incredibly hopeful for all of us because they know what the stakes are. So thank you very much for being on Future Hindsight. It was really a pleasure to have you on the show today.
Matt Kahn: [00:45:53] Thank you.
Mila Atmos: [00:45:54] Matthew E. Kahn is a provost professor of economics and spatial sciences at the University of Southern California and focuses his research on urban and environmental economics. Next week on future hindsight, we'll be joined by Miles Rapoport and E.J. Dionne to discuss the big idea at the core of America: democracy. They co-authored 100% Democracy, The Case for Universal Voting at a time when the erosion of democracy is real and undisputed. They argue that every adult American citizen should be made to vote.
E.J. Dionne: [00:46:35] When our republic started, in most places, voting was confined to white men who own property. And we've gone on a long journey as a country, largely
positive, with some setbacks at various points toward including everyone. And we think this is the, if you will, game changing step that really says we want to welcome every citizen into the process.
Mila Atmos: [00:46:59] That's next time on future hindsight. This episode was produced by Zack Travis and Sara Burningham. Until next time, stay engaged.
The Democracy Group: [00:47:18] This podcast is part of the Democracy Group.