Even as the Covid-19 death toll rises in the nation’s most dense urban cores, economists still mostly expect cities to bounce back, once there is a vaccine, a treatment or a successful strategy to contain the virus’s spread.
And yet, this pandemic threatens the assets that make the country’s most successful cities so dynamic — not only their bars, museums and theaters, but also their dense networks of innovative businesses and highly skilled workers, jumping among employers, bumping into one another, sharing ideas, powering innovation and lifting productivity.
Covid-19 is not the deadliest disease to have ravaged cities through the ages. But it is showing us that they might not be as essential as they once were. “Cities are more in danger than in the 19th century even though this plague is less severe,” said the Harvard economist Edward Glaeser, “because we are rich enough to imagine a deurbanized world.”
Paradoxically, America’s big cities are becoming more valuable, churning out an increasing share of the nation’s economic output.
They have benefited from the rise of economic complexity and the explosive growth of technologies that reward the most highly educated workers. Complex industries like information technology, biotechnology and finance concentrate in large cities where they can find the most skilled employees.
These cutting-edge businesses don’t mind paying top dollar for the talent, not least because — research has found — highly skilled workers tend to be more productive and innovative when they are surrounded by others like them.
But if big-city businesses find that work from home doesn’t hit their productivity too hard, they might reassess the need to pay top dollar to keep employees in, say, Seattle or the Bay Area. A survey by the market research firm Reach Advisors found that companies facing high real estate and labor costs were the most interested in pursuing remote work into the future.