I’ve written in the past that Provo has a low median income compared to similar cities, as well as a high poverty rate. I’m not an economist, so these problems seem like the hardest, if most important, to fix.
Yesterday however, Slate’s Matthew Yglesias tackled this issue, framing it in terms of scarcity:
[…] if we’re wondering about the jobs of the future and whether the typical person in 2052 will be able to afford a visit to the doctor this turns out to be basically a question about how many doctors there will be, not what kinds of jobs people have. Insofar as doctors are scarce, lots of people won’t get to see the doctor. By contrast, if doctors are plentiful then a decent society shouldn’t have a difficult time organizing things so that people can see the doctor. […] It used to be that doctors made house calls, but they’re too scarce now for any reasonable person to pay for that.
In other words, if there are a lot of doctors they become cheaper. And if something is cheaper, wages don’t need to be as high to afford it.
Income in a city goes up when people earn more, as well as when things begin to cost less.
Yglesias goes on to mention that technological advances — a computer that can do the work of a doctor, for example — could make medical care less scarce and cause a de facto raise for everyone.
So what does this mean for cities with comparatively low median incomes?
Most obviously it provides a way to “increase” salaries without directly tackling wages. But Yglesias also connects this idea to housing:
By the same token relaxing anti-density regulations would not only increase numerator wages by improving productivity and agglomeration, it would increase wages on the denominator side by reducing the cost of housing in desirable locations.
Yglesias is saying in that quote that increasing housing density would do two things: increase actual wages (the “numerator”), and allow people to save money on housing by making it more common and affordable (the “denominator”).
Fixing anti-density issues is a recurring theme on this blog, but Yglesias’ post is great because it directly connects that agenda with the biggest problem in a city like Provo. It just remains to be seen if city governments — in Provo and elsewhere — will force themselves to buck the trend and do what is obviously most beneficial.