Regional President Speech

Federal Reserve Bank of San Francisco ABOUT US OUR PEOPLE JOIN US What We Study Our District Research & Insights News & Media / NEWS & MEDIA / EVENTS The New Future of Work: Future of Cities DATE Monday, Nov 23, 2020 TIME 10–11 a.m. PST LOCATION Federal Reserve Bank of San Francisco Virtual TOPICS Economic Inclusion Employment & Unemployment Labor Markets Workforce Participation 1:02:02 How is the COVID-19 pandemic reshaping the way we work? What’s next for the workplace once the pandemic is behind us? San Francisco Fed President Mary C. Daly discusses the New Future of Work with Keisha Lance Bottoms (City of Atlanta, Georgia), Earvin “Magic” Johnson (Magic Johnson Enterprises), Lauren McLean (City of Boise, Idaho), and Enrico Moretti (UC Berkeley). November 23, 2020 (video, 1:02:02). Summary As new remote work options decouple employees from their employers’ physical locations, what becomes of city centers across the country? Does the divide between urban and rural communities narrow or widen? What will happen to onsite essential workers and small businesses? Join SF Fed President Mary C. Daly in conversation with Mayor Keisha Lance Bottoms (Atlanta, Georgia), Earvin “Magic” Johnson (Magic Johnson Enterprises), Mayor Lauren McLean (Boise, Idaho), and Enrico Moretti (UC Berkeley). We will explore how changes brought on by COVID-19 are affecting our cities and what that means for the people who live and work there. This is the second event in a series of discussions on the new future of work. Transcript Hide this section Mary C. Daly: Good morning, good afternoon, good evening. From wherever you’re watching we’re very excited to welcome you back to our second conversation about the new future of work. I’m Mary Daly and I’m president and CEO of the Federal Reserve Bank of San Francisco. We’re hosting this series on the new future of work so that we can come together and build a post-pandemic future that is inclusive, productive, and sustainable, and reflects directly who we want to be in the world. So today we’re going to pick a big topic: the future of cities. I’m sitting right here, right now in San Francisco and if you look outside, you might think the future is bleak. This is really something we’re seeing everywhere. In fact, I’d like to read you a few headlines: “Mayor puts lid on city businesses to save lives.” This came out of Seattle. “100 masked slackers held on charge of disturbing the peace.” This happened in San Francisco. “Theaters, churches are closed by the mayor.” That came out of Oakland. And “Board protests school closing.” That happened in Salt Lake City. But here’s the thing, those headlines I just read, they happened not this year, but ran in October and November of 1918—102 years ago. The Spanish flu, the last pandemic, was the most severe in all of our history. Lockdowns were in effect and people fled cities in droves, trying to find any way to be outside of densely populated areas. And everyone proclaimed—and you could read it in the history books—in 1918, that the death of cities was upon us, that it was the end of days for city living. Then came the 1920s, and it was the single biggest boom of cities in our history. Cities thrived like never before. So our question today is: Will this time be different? You might think it could. We’ve uncovered so many of our hidden capabilities, including the ability to work from home and live elsewhere. And so if we don’t really need to work together and in businesses, then what does it mean for our urban centers? What does it mean for the fate of cities? The question really is: Have the headline writers of 1918 finally got it right 102 years later? So to help answer that question, I’m really delighted to be joined by four panelists who have real expertise on cities, not only in study, but in practice. They’re going to help us think about these questions and give us their own views on what the future of cities looks like. So let me introduce them. My first distinguished guest is the mayor of Atlanta, Keisha Lance Bottoms. Now, many of you might know her for being brilliantly vocal about the importance of racial justice in our society. But what you might not know is that she has been the mayor of Atlanta since 2017 and is committed to building an inclusive and equitable city. Our second guest is Earvin “Magic” Johnson, an entrepreneur, an investor, an NBA legend, and a philanthropist. Something you might not know about Mr. Johnson is that through his company, EquiTrust, he has invested hundreds of millions of dollars to help ethnically diverse urban communities survive the pandemic. My third guest is the mayor of Boise—Boise, Idaho—Lauren McLean. She took office in January of this year, and at that time became the first female mayor in the city’s 150- year history. She is also the mayor of one of the country’s fastest growing cities and is committed to building a smart and sustainable place where everyone is included. And our final panelist is Enrico Moretti. Now I’ve known Enrico for a long time, as he’s a fellow economist. He is a distinguished professor of economics at UC Berkeley, and he’s also an expert in the geographic differences in economic wellbeing across our country. His new book, The New Geography of Jobs, was translated into eight languages and has been on the nightstand of many prominent policymakers, including myself. So thanks to each one of our guests for joining us today. Now I’m going to kick it off with a really provocative question, I think, and that is: Are you bullish or bearish on cities and why? And let me start by asking Magic Johnson. Earvin “Magic” Johnson: Well, I think, for me, I’ve always been for cities. I think that especially when cities have great leadership—we have two great mayors on here today—and I think that when you can think about the future, it has to be in a public-private partnership, right? If cities are going to come back strong, they don’t have the funds that they used to have, so now you have to really look for outsiders in terms of the business world to come in and bring new development, which creates jobs, look toward infrastructure, which again, creates jobs. So I think that it’s all about great leadership. And when leadership understands where their city is in terms of the economy and economic wise, then you can say, “Hey, we need to partner with some great partners in terms of… in the business world. And we can create new jobs and new opportunities in our cities.” I’m sure both mayors would agree with me on that. Mary C. Daly: Well, let’s ask one of the mayors. Mayor McLean, can you talk to us about why you’re bullish on cities, if you are bullish? And I think you are. Lauren McLean: I am bullish on cities and for a couple of reasons. First off, I mean with a long view, is that humans have flocked to cities for thousands and thousands of years. We’ve withstood pandemics, economic crises, wars, and we still keep coming back. So I really believe that while cities will look different potentially after this, we all have reason to be bullish on cities. And here in Boise, I think Magic’s right. We need to have a sense of how the economy is going. We’re experiencing an incredible amount of growth, both pre-pandemic, and now with pandemic, where people are choosing to call Boise home. And that means that we’ve got to be really smart about the investments that we make to catch up with infrastructure, because we were somewhat behind before, and then really address equitable access to opportunity as well as parks, open spaces, and other things within the city as we grow. Mary C. Daly: So, thinking about these fundamental elements of cities, I’m going to turn to Enrico Moretti. Enrico, why are you bullish on cities, if you are? And you heard Magic and Mayor McLean—what do you think about how cities will be evolved? What’s the value proposition for cities? Enrico Moretti: I’m generally quite optimistic about the future of cities. The media are obsessed with the prediction that the cities are dead. A lot of this hype, it’s really focusing on the short run. On now. The question is: What will cities look like after we have a vaccine and after we go back to the new normal. And I suspect that the new normal will look a lot like the old normal, and there are good, fundamental economic reasons to think that the future of cities is not going to be all that different from their past. Until January 2020, cities were the most productive part of the US economy. Cities were the places where most innovation in the US economy was created. Cities were the place where people could have the best careers. In fact, there is a lot of economic evidence that suggests that cities were not just great magnets for the best and the brightest, but were also causally making careers better. So people who moved to cities had increases in salaries, increases in productivity… they became more creative and more innovative. I don’t think that those fundamental economic forces will be all that different in the long run, say 2022 and onward. After we have enough time after [the] vaccine to go back to a new equilibrium, there is no reason why those economic forces that made cities so successful and the workers in those cities so successful will be all that different in the future. Mary C. Daly: Mayor Bottoms I’m going to end this part of the question with you. And so many of the things that Enrico was talking about seem to match with the fact that you’re presiding over a very old city in the United States, but also one of the largest cities in the United States. So what’s your view on whether cities are still going to be with us in 10 years, and why do you think they will or won’t? Keisha Lance Bottoms: So, Mary, what I was struck when you read those headlines—I’ve always known that my family moved to Atlanta around 1920—but I never once thought of it in the context of moving here on the heels of the Spanish flu. But, they were children of those who were once enslaved, then they moved to Atlanta looking for opportunity and something better for their children. And five to seven generations of our family are still in cities. So it’s for that reason—that same type of resilience and that same type of hope for the future—that I know that people will continue to live and invest in cities and believe in cities. Obviously, this has been a challenge for us and it’s made all of us rethink how we operate and exist in our cities. But as you pointed out, we are not the first generation that’s endured hardship, and other generations have overcome it. And even in overcoming that hardship, the core of it has been within our urban centers and I believe that will continue. Mary C. Daly: That’s a really nice way to kick off my next question to each of you. We talked about resiliency of cities, we talked about the fact that people are just drawn to live together, and that there’s this dynamic part—but what are the risks to being able to make this work well? I mean, I’m just thinking back to pre-pandemic. Cities were not a panacea. They had so many great things, but here in San Francisco, at least—and this was common across the nation—there was issues about overcrowding and commuting and homelessness. And so what do you see as we evolve into the new city, the next city, with all those economic fundamentals, what do you think will really be the risk that we have to attend to and how are we going to manage those risks? And here, I’d like to start with Enrico. Enrico Moretti: I think that one of the main risks that I see is for the future of the retail sector. The retail sector before the pandemic was already struggling with competition from online vendors. And I think that in the last six months, a lot of people—even those who were not already using Amazon all that much—have moved toward online buying. And the retail sector employment is a crucial part of the overall employment in a city. So I’m sure that Mayor Bottoms and Mayor McLean will agree that cities need to do everything they can to keep that part of the city economy alive once we start reopening. More in general, I think that the issue of overcrowding and cost of living really reflects policy choices on the part of cities. There are wise and smart investments cities can make, for example, to invest in transit and to make it so that that crowding and that traffic and that congestion actually, it’s reduced. We can learn from European cities. It’s not like rocket science. We know that if you invest in transit, we will get results, we will reduce that congestion. So a lot of it has to do with policy choices, as Magic was saying, the right policies for the communities. Mary C. Daly: I’ve heard, and several of you have mentioned the leadership. Magic, you started by talking about the leadership issues that we need, and Enrico, you just mentioned, “It’s not rocket science.” We know how to do the things, we just don’t necessarily have the political will. So Mayor Bottoms, would you put that as one of the big risks to our future of cities going forward and whether they’re livable and wonderful like we want them to be? Keisha Lance Bottoms: What has really struck me, the whole conversation of 2020 has really been this divide in who we are: urban versus rural, et cetera. And I think we’re going to have to consider this in as much as a social context as anything, but again, going back to the point that Enrico just made about it being a policy push: I think when you have consistent policy, whether it be from the state level or the federal level, that enriches our rural communities in the same way it enriches our urban communities and education opportunities and workforce opportunities… I think that goes a long way in healing that divide. There’s this saying in Atlanta: “There’s Atlanta and then there’s the rest of Georgia.” Well, that’s for more reasons than one, because Atlanta is a big city in the state, but there for so many years have been huge differences between Atlanta and the rest of Georgia. But as we see an expanding metropolitan area, we’re seeing the push of Atlanta pushed outward. But what we’re seeing, especially in light of COVID, many of the challenges we have in our rural communities are the same ones that we have in our urban communities, whether it’s access to broadband, whether it’s access to fresh food or medical care, many of our problems and challenges are still the same. That’s why there’s going to be a need for consistent policies that no matter where we decide to live, that we can at least feel as if we all have an opportunity, an equal opportunity to be successful. Mary C. Daly: It reminds me again and again that one of the big lessons from 2020 is going to be that we all may feel differently depending on where we sit in the nation, urban or rural, but we very much all want the same things. We want to have opportunities, raise families, make contributions, and that’s really what links us together. But in thinking about this divide, I was really struck by you saying there is a rural, urban divide, which we really have witnessed. Magic, I’m going to turn to you because there’s also a divide in an urban area between those that are not often or not always fully being able to take advantage of the expanding economy often left behind, and those who have really taken advantage of the expanding economy. So can you talk a little bit about, how do you see us? Is that a risk to the future of cities… those divides that take place? I know in LA, whether you go to one neighborhood or another really determines, in many places, the fortunes of the kids who grow up there. Magic Johnson: Well, unfortunately the divide has been here for a long time. And so when we think about it, just think about just recently now. The Paycheck Protection Program did not trickle down to the Black and brown community. So when you think about Black America, we lost over 400,000 Black businesses because we didn’t have relationships with banks or credit unions who got the money, or they said that we didn’t have enough employees, which still, I don’t understand that at all. A great business is a great business. We needed those Black-owned businesses to survive because they provide so many services to our community. Now, when you think about health care, you think about hospitals and all of that, we don’t have those in our community. So those clinics that were in the Black community were so important, and I’ll tell you why this is so important. I landed in DC, it would have to be a year ago, and a mother, a Black mother, her son had a toothache, but she couldn’t afford to take him to the hospital or the dentist and so that infection went up to his brain and killed him, right? So we’re seeing so many of these problems that shouldn’t be a problem. When we think about urban America and what we were able to do at EquiTrust, my company that I own, I had to save these Black-owned and Latino-owned businesses because if I didn’t, they were going to close. And not only losing them, but also that meant thousands and thousands of Black and Latino employees also lose their jobs too. Now they can’t take care of their family, and the community is not as strong anymore if we lose these businesses and more people are unemployed. So, man, when you think about the divide, it’s been here, it depends on what city you’re in. I know in Los Angeles, we have a big community of minorities. And so we want to make sure we can get back to being strong again, and we shouldn’t judge people by the color of their skin. We’ve had all these protests and unrest for a reason. And so what we have to do now is really come together and give everybody an equal opportunity. And we’ve got to invest in these small businesses because they make America go. And let me just point this out: Yesterday, we closed down all the restaurants, right? So where are all those employees now who are going to lose their job? And think about this, and Mayor Lance Bottoms, she knows this, when you think about the service sector, that’s really driven by minorities, right? Restaurant help, when you think about hotels, those types of jobs, actually, that’s where our community thrives in those types of jobs. Now we’ve lost all of those jobs and we don’t even know if they’re going to come back. So it’s really been a divide for a number of years. This is not just happening now because we have a pandemic. Mary C. Daly: That completely resonates with everything that we read and we study as economists. I mean, the idea that the pandemic has really just put a magnifying glass on so many of the things that have gone on in our societies… these divides. And these divides, they’re a yoke. They bridle our growth going forward, and I think you’ve pointed out many of the reasons why that’s true. I want to turn to Mayor McLean and just ask, so you’ve heard the rural, urban issue, which you certainly have in Idaho, and then you’ve heard about the fact that we have many problems in cities. What do you think of as… how do you not import those to Boise, Idaho, and how do you think about building a resilient community coming forward? You’re bullish on cities. Are there any risks you’re worried about? Lauren McLean: Sure. And I just want to pick up on something Magic said too, and that is that this pandemic really did lay bare for more people to see, I think is what it is, the inequities that our communities have really had for so long. Here in Boise, as we’ve continued to grow, wages keeping up with cost of living has been tough. Cities have needed to keep up with infrastructure investments and with tax policies that make that hard. But with the growth, for many people, it’s felt as though or it has seemed as though everything is okay. This pandemic has made it clear that there are issues that we have to address even here. And just like in every other state across the country where you have this urban, rural divide, we do here as well. And our metro area, even, as it grows, I think is still dealing with some of the old vestiges of rural, urban divide, even though most people would consider us to be an urban metro area. But I am bullish, but concerned about our ability to keep up with the growth because what we’ve seen with COVID is that while we were growing before the pandemic, we have people that are continuing to come here because they’ve recognized that our open spaces, our vibrant neighborhoods, our smaller, but vibrant downtown has a lot to offer, especially for those that can port their jobs anywhere. And so that exacerbates further the cost of living in our community and the ability of folks who are making minimum wage in the service sector and others within the city to be able to live where they grow. So as mayor and our team, what we believe is really important is that we address head-on the issues around workforce development. And as my Recovery Task Force said, its workforce development, housing, and health that a city has got to make sure that we can help take care of through partnerships. And then from a resilience perspective, I really believe that those communities that remember who we are and how important it is to work together and then address and in many ways imagine what’s next for cities—so address climate and look for economic opportunity by doing that, remember that investing in people, what this is all about, whether it be urban or rural—are the cities that will come out in some ways ahead. That’s what we’re trying to do here. Mary C. Daly: Well thank you, all of you, for those issues. I can just keep asking those questions and dig a little deeper, but I want to shift and ask each of you individual questions that are related to the expertise you’re bringing in. One of the things that really struck me as I follow all of you is that you had really good and evidence-based views about what we should do in cities and why they were so important long before the pandemic. And so Enrico, I want to start with you since you’ve written a book on this, and every time I think of your work, I think of this: that one skilled job in a city generates two-and-a-half more jobs in the goods and service sector that support it. So if I read your book correctly, the whole way this works is when we live close to each other, there are these multiplier effects. And that really contributes to growth in the cities—they’re very productive—but also to growth nationally. So I guess my question is: What happens if we all move away, if we all decide that living in rural areas where we’re very far away from each other… what happens to our growth? Not only in the cities, but as a nation. Enrico Moretti: Yeah. This is one of the most important points in understanding the vitality of cities. We’ve seen over the past couple of decades, a very torrid growth in skill jobs, especially in the most dynamic of US cities. But when you look at the data, the beneficiaries of that growth are not limited to skilled workers in those cities, but there are a lot of beneficiaries in the local service sector, which is made of a broad and diverse set of industries from the less professional jobs, like in say construction or retail or entertainment, but also professional jobs like doctors, lawyers, and architects and nurses and teachers. All those jobs, essentially, they are service jobs that sell their service in the local economy. So when the local economy thrives because it attracts good skilled positions, especially in the most dynamic of industries like innovation, finance, health care, what you see is an increase in both employment and wages in the local service sector, which benefits quite a diverse set of workers. I think it’s really important to understand that because what it means is that there is not juxtaposition between the interest of one group and the interest of a different group, but what it means is that when the local economy grows, it benefits all workers in a given location. And that’s important because it sort of shift our perspective. This is not like a zero-sum game. When a city grows and when jobs grow, most people in a city tend to benefit. I think this is one of the real reasons why cities, especially the most dynamic of US cities have grown a lot in the last 20 years. So when those skilled jobs start spreading out and going to rural areas, [inaudible] you lose that multiplier effect. If you look outside your window in downtown San Francisco, I’m pretty sure that a lot of those stores, those restaurants, those retailers are closed and that’s the loss of the multiplier effect. But I think that in the long run, after the vaccine and after we go back to the new normal and after the office jobs and the skilled jobs come back to the cities, we’re going to see the same multiplier effect that we’ve seen in the past with the renaissance of those jobs. My main concern is the one I was referring to earlier, is that for the retail sector, it could be that consumers are now used to buying way more online and that some of those retail sector jobs might be gone for good. But most of the other ones presumably will be back. Mary C. Daly: Well, this will be a boost then to you, at least from my family. We do shop online, like so many of us have had to do during the pandemic, but when we were allowed to go, especially into our local stores that are run by small businesses, I was so happy to get back in. And I even bought a few things I didn’t need because I was just so excited to be back in a retail outlet and mostly seeing the people in my community who I cherish. You said a couple of things I just want to highlight. One is that another way to think about this multiplier effect is it’s a virtuous cycle, that when one person gets a job, that person’s job actually contributes to other jobs in the community. And the virtuous cycle is stronger when we’re all more connected, when we’re together. The other thing that I wanted to highlight that you said was that you have a version of the… I think it’s called the Sunshine Theory. I remember Paul Wellstone using it. We all do better when we all do better, that it’s not a zero sum game where there’s some who get and some who don’t. We actually do better as a nation and as a community if everyone gets to be a participant in it, and all of us do better. So those are two things I just wanted to highlight from your remarks, because you’re Enrico Moretti and work on this for a living, are deeply seated in the evidence, in the data, not only the aspirations. Mayor Bottoms, I want to turn to you next. And there’s something that when I think about you in the Atlanta area, you have this vision of One Atlanta. In particular, I was struck by the vision that commerce and compassion, they go together. I think it would be really useful for our listeners to understand, why is it so important for compassion and commerce to go together? And then I think even more importantly, how do we do that? Keisha Lance Bottoms: Well, thank God for the vision because entering 2020, had we not laid out a game plan, I don’t know where we would be as a city. But our One Atlanta vision is based on equity. And it’s based upon this theory that every resident and business needs to be equipped for success in it. And Atlanta, it’s what Ambassador Young so eloquently coined as the “Atlanta Way.” Meaning there is this long-standing history in our city where government and the civic community and the corporate community have come together seamlessly for the good of the community as a whole. The example that Ambassador Young often gives is that when Dr. King was awarded the Nobel Peace Prize, and nobody wanted an integrated audience to welcome him back [inaudible] his community, the Coca Cola company and the Woodruff family who stood up and said, “Not in our city.” And there was an integrated dinner held to celebrate his winning the Nobel Peace Prize. It’s really under that guiding light that Atlanta has been able to thrive for so many decades. I have a body that I meet with once a quarter, the Atlanta Committee for Progress. There are numerous Fortune 500 companies headquartered in Atlanta. Many of these CEOs, representatives of philanthropic organizations, colleges, and universities meet with me once a quarter. So I have the luxury of having dreams about things that I have no idea how they will be funded in our city budget, but if I’m able to take it to our corporate community, it gives me a little more flexibility. The most recent example of that is as we are looking at police reform and criminal justice reform in Atlanta, we brought in an outside entity to help with this work. And it’s this group that is funding the process for us. Whether it’s the building of the Mercedes-Benz Stadium and we were able to create a displacement tax-free zone in the community, where people are able to access money to pay rising property taxes, because the neighborhood is redeveloping… and I could go on and on and on. And as I talk to mayors across the country, I recognize how fortunate we are in that many other cities don’t have this type of synergy, but it really has helped us tremendously to help bridge that divide. It doesn’t mean that we don’t have our share of problems in Atlanta. Equity is still a huge problem. We still have a huge income gap in Atlanta, but again, the corporate community helped me stand up a technical training program so that our young people can enter this training program and access many of the jobs at Delta Airlines, Home Depot, Georgia Power, et cetera. And so, it’s worked well for us. And it’s something I hope will be replicated across the country. Mary C. Daly: I completely agree. My aspiration for the country is that One Atlanta becomes our mantra for One America. You said something really helpful there that I think just naturally leads me to talk to Magic next, in that you talked about public/private partnerships and that it’s the public can’t do it—the public sector won’t and can’t do it all alone—and Magic, you mentioned that right out of there. So I always think of you as a businessman with a mission. And the business proposition is to make LA and the communities around it integrated and strong. But talk to us more about this idea that it’s not going to just be one entity… that it really takes this public/private partnership. And also, why do you think this idea you had of Black and brown businesses being a part of the solution, why is that so important for our nation to grow? Magic Johnson: Well, first of all, we already know that these cities, as well as states, are struggling financially, right? And so, when you think about what Mayor Lance Bottoms was talking about was now, “Hey, I can’t fund it, but maybe I can get one of the great corporations who are based in Atlanta to fund an initiative that is good for everybody; good for the corporation, good for the city, and then especially good for the community.” And so, I think that that’s the type of partnerships we’re talking about. It’s going to have to happen all over the country. If we’re talking about putting people back to work or getting things done in a city, now these partnerships become more important today than it was yesterday. And then when I think about, I’ve been investing in urban America now for over 35 years. So I work with every mayor, every governor, so I know what’s important. Like right now, we still have a shortage of housing. I think Mayor McLean talked about workforce housing. Well, we need workforce housing in urban America, and we need affordable housing in urban America. So those types of things, I’ve been a part of. Matter of fact, in Atlanta, I built two mixed uses because in urban America, what we have is a shortage of retail and a shortage of housing. And those things now have come together and when you build mixed use and you can create jobs at the same time, right? These are the type of things that I’ve been about my whole career: How can I bring these urban communities the quality services and products that they need to be successful? Enrico, you talked about something about the money in terms of how much money people make and so on. See in urban America, that dollar only touches two or three hands, right? Where in suburban America, a dollar touches 10 hands. And so, that’s where we have to somehow get it to be even by creating more jobs that pay well. Enrico was talking about that. These are the type of things that I’ve been pushing for a long time, trying to make sure that those who live in urban America can have access to incredible jobs, but not just good-paying jobs, but jobs that they can grow in, too. Jobs that they can say, “Hey, one day I can be promoted,” because that’s also been the problem when we think about people of color. And then also, contracts with these companies, vendors, suppliers. These urban companies, they want scale, they want to grow, but how can they do that if they don’t get contracts with these Fortune 500 companies? And then last but not least, they have to sit on boards. The best companies I know have a diverse board. So diversity and inclusion is so important, too, at the same time. So when I think about urban America, I’ve had some awesome success, but we have so many challenges today that we didn’t have yesterday because of this pandemic. And it’s going to take what Mayor Lance Bottoms just talked about, which is the public sector, the private sector coming together and saying, “Hey, how can I help you, Mayor, achieve your goals and agenda that you have for not just the city, but also for the inner city, the city that you live in?” Because see, we have to still be equal, right? So somehow we got to make sure that it trickles down. And Mayor Lance Bottoms talked about equity wise, it trickled down to everybody. And that’s a great city. If it trickles down to everybody, now you have a great city and a city that will be strong, and it can survive anything. Mary C. Daly: It all goes back to resiliency, if you will. If everyone’s included and we don’t make it into a zero-sum game or haves get things and have-nots do not, then we actually have something that’s resilient and sustainable. And I think that goes right back to the idea of how do we build a city going forward that draws on all the rich traditions that Mayor Lance Bottoms mentioned? But also goes beyond that and becomes even better, a visionary city that is more inclusive. I’m going to ask a couple more questions about that in a moment to all of you. But I want to end the individual questions by going to Mayor McLean and asking you. You mentioned this earlier in the discussion, that you’ve been the recipient of enormous numbers of inflows, especially coming from San Francisco and Southern California. In fact, when I meet people and they say, “Well, I’m moving.” I say, “Where are you going?” They always say, “Boise.” So how are we not—and maybe you’re not worried, maybe you are worried—how are we not just transplanting problems that we were unable to really solve in big cities into now growing cities? How do we make sure that doesn’t happen? What’s your vision for how you incorporate all of these people without just basically importing the problems that we had here before the pandemic? Lauren McLean: Well, I’m smiling and almost laughing because it really is so true. And I think part of it is just human nature. We’ve got people that are fleeing the traffic congestion, want a shorter commute. And so, they find Boise and I’ll talk about why, and then it starts to recreate the very things that they were trying to get away from. And as we grow, what our residents say is so important, our vision here is a city for everyone. So we recognize that growth is coming, people are going to come here. They’re going to come here because we offer an incredible value proposition with a community of people that are committed to the place and the neighborhoods and the neighbors that they now have. But we’ve got to stay ahead, or at least for Idaho and for Boise, catch up with the infrastructure needs. And all too often, what we find is, that folks are coming here and they like that from a coastal perspective, it’s cheaper to live here. But then are more hesitant when it comes to a willingness to pay property taxes or make other investments. As a city, we have so few financial tools to make sure that we can invest in mobility so people can move from work to home more easily. To invest in the open spaces and parks that we have right now so that as we grow, we have more. To make sure that our schools have the space that they need. And that requires property tax dollars and a recognition that investing in people is so important. From our perspective, that’s one of the things we’re often up against is that ability to keep up with infrastructure and also protect what we love about this place, as so many people are coming here because they love what we love about it. Mary C. Daly: Well, when I’ve spoken to you before on this issue, I’m always struck by it, that people flee places that they feel have problems and then they go to new places that don’t have those problems, but then get a little hesitant to pay for keeping those places inclusive and wonderful and lovely. And it’s the equation we’re all going to have to get used to, that we do have to pitch in as a nation, all of us, whether you’re in the rural or urban areas, or in the urban versus suburban, in order to make the places we live inclusive and robust and resilient. So it’s an interesting dilemma, but I think one we’re going to have to begin to grapple with as a nation, really. I want to ask, I was so struck by the really, very clear ideas each of you have for what we need to do to keep our cities thriving. But I want to do something that you may not have expected me to do, which is I’m going to give each one of you a magic wand for one answer. And the magic wand I want to give you is: If you could change a single policy that we have, or make a single policy, what would you do in your areas to really help contribute to the thriving of cities going forward? And Mayor Lance Bottoms, I’m going to start with you. Keisha Lance Bottoms: Oh, wow. So many, but if I had a magic wand, likely it would be something centered around education and easier access to quality education for all of our communities. Nelson Mandela said, “Education is the most powerful weapon that could be used to change the world.” And when we talk about—and the mayor doesn’t control the schools in our city—but what I know when I was a judge in another life, everything related to crime goes back to education and lack of access to education. Talk about children in communities with schools that aren’t performing that great, and whether or not they should have access to other schools and what that should look like, then it gets into transportation costs, then all of these other barriers. So my magic wand would be to give me the ability to succinctly articulate how we solve our education issue in our city. Mary C. Daly: Terrific. “Hear, hear” on that one. Magic wand, who am I going to pick next? Let me pick Magic. Magic wand for Magic. Magic Johnson: Okay, I’m waving it right now. Mary, thank you. I would really piggyback on Mayor Lance Bottoms and what she said. Two years ago, we had raised money to build a STEM lab in probably the most famous inner city school we have in Los Angeles, Crenshaw High. But we had to jump through hoops, and we had to go not only through the school, then we had to go through the city. It took us a long time just to get the okay. Now, most times, you want somebody to come in and say, “Hey, you don’t have to pay a dime. We’re going to fund it all.” So we built this incredible STEM lab in Crenshaw High. And I want all four of you to know, I cried on that day when we went down there and we cut the ribbon, and we walked in. And we had a great educator. I mean, an awesome young man, who was leading the effort teaching the kids. But when we walked in, here are these Latino students and African-American students who now just created some amazing robots. One young man created a whole thing on making images on sneakers, and he had sold out to everybody in the school wanted him to put the different things on the tennis shoes. Another person had something else going on. It was just amazing. So I cried. I lost it. I said, “Man, this is what America should be about. This is what the school system should be about. This is what the inner city school systems should be about.” And so for me, it was a great moment, but it just took us so long to get there and where we weren’t asking the school board or the city or the school itself for nothing but the space. We came in with everything else. I would hope that in the future, because I built technology centers and, matter of fact one in Atlanta, all over the country… so that kids from the inner city would have access to a computer so that they can do their homework, and so on. But this was my first STEM lab, and I want to continue to build them. But I would love for it to just be easier. I’m bringing everything, I just need the space. Mary C. Daly: So that’s amazing. I actually choked up while you were telling me about this and telling us about the students at that STEM lab, because wow—what an opportunity, and so well-deserved for them. But one of the key takeaways then is we just need to get out of our own way. Regulation is a double-edged sword. It’s good and it defends people from things… from behaving in ways that we wouldn’t be wanting, but sometimes it’s so burdensome that doing good becomes very hard. So that’s another part of the magic wand: Let’s cut the red tape and get things done. Next, I’m going to turn it over to Mayor McLean. What’s your magic wand wish for policy? Lauren McLean: So these are the types of questions that are supposed to be easy. And I just think it’s so hard. So a couple of things, one, I think one policy is hard because I really believe that housing, the economy, climate innovation, opportunity, all tie together. So there’s no siloing of programs or policies. I guess right now, if I could have a magic wand, there’s two things I want. First off, the fun one would be almost just to be able to have a future version of what could happen to ensure people that we will get through this pandemic. That together we will recover our economies. That investments in people and policies right now will have a difference… would make it so much easier to move through the time right now. So that’s the non-policy one that would be somewhat magical if I could just walk around with the image of that to make it easier to do things. But from a policies perspective, I’d probably focus on housing, affordable housing. Because there’s such a basic piece of having a roof, a stable place to live that you and your family can afford so you can feel good about getting to school. So you can, right now, have a place that’s safe to do online learning. That you have less of your pocket book going to those monthly costs or that you can find it closer to where you work. And that’s definitely been a priority that I came into office in January with and remains so incredibly important given the times. Mary C. Daly: The pandemic again has put a real spotlight on this. If you don’t have a safe place to live and you don’t feel good in your environment, it’s extremely difficult to participate fully in the economy. So many of us take that for granted that we don’t really internalize how hard it is if you don’t have it. But I think it’s critical and I’m so glad you highlighted it because it is—homelessness and just poor sheltering, unsheltered and poor sheltering—is becoming such an issue itself that if we didn’t have a health pandemic, we would definitely have a housing pandemic. So thank you for bringing that up, certainly something a magic wand should be used for. So Enrico, you’re the last man to have the magic wand. What’s your magic wand policy change, policy innovation that you would want? Enrico Moretti: Well, I must say I would steal Mayor Bottoms’ wand. Education for me is the key. And not only because it’s the right thing to do as Magic was saying, but especially because it works. If you look at the data, there’s no question that the cities that have done the best over the past two decades are the cities that have the highest share of well-educated workers in the workforce. There are about 300 metropolitan areas in the US as defined by the Census. If you do a ranking based on which cities have experienced the fastest labor earnings since 2000, it’s clear that those are the cities that have the highest share of workers with a lot of schooling in their workforce. And more importantly, it’s not just that cities where you have a lot of well-educated workers, they offer well-paying jobs for the well- educated workers, but it’s also true for the least educated workers. So the cities where you see a lot of workers with college degrees and master’s degrees are also the cities where the labor incomes for workers with high school degrees or less have grown the most. I think there’s a growing body of economic research that points to the fact that a dollar invested in education, whether it’s a low, elementary school, middle school, high school, community college, college… a dollar invested in education in the long run has a much higher return for the community. But in terms of private return, for those who are lucky enough to have that education, higher earnings for them, but also social return for everyone else who lives in that community. I think it’s one of the best economic and industrial policies we can have in US communities is to invest in education because it’s going to pay off many times over, over the long run. Both for those who have that education, but also for the broader community at large. Mary C. Daly: Completely. I mean, the research is unequivocal here that Enrico just mentioned his own. I’ve worked on education research myself, and it’s just the best investment a person can make, the best investment a society can make. The thing that I will add to this is that I spend a lot of time as a Federal Reserve Bank president going through the district, talking to families in low- and moderate-income communities, first-generation immigrants, et cetera, people of color. And it’s so interesting. We often ask: Do really people need to go to college? Do they need to get these certificates? But no one in those communities ever asked that question. So I just want to emphasize that the only people asking that question are people who already have those degrees. So let’s really be honest here that those individuals in those communities, they want access and opportunity. I think that’s really something that is highlighted here in whether it’s Magic’s story about the STEM lab and those kids, or Mayor Lance Bottoms’ and Enrico’s acknowledgement that, wow, if you don’t have education, we really can’t even start. So I think that’s a super important thing for us to continue to bring up in these post- pandemic and even during the pandemic discussions about what we need to do to build. So I see time is waning and I have one opportunity to ask one more question of each of you. And so here’s the question. I hope it’s a, well, maybe even a little harder, but probably not. It’ll be easier than the magic wand question. So you have all recognized, we’ve had a really robust discussion about the problems we face, the optimism you have for cities, all of those things together. But we are in the week of Thanksgiving here in the United States, and we have seen a surge in coronavirus cases and people are worried. I think Mayor McLean, you said you wished your magic wand could just make people think of the future. So I want to ask each and every one of you the simple question: Why do you still hope? And Mayor Bottoms, Mayor Lance Bottoms, I’d like to start with you. Keisha Lance Bottoms: My children—the very simple answer. I don’t have a choice but to be optimistic. I began by speaking of my grandmothers, grandparents. And during the course of the past several months, I’ve kept their picture near me. They were once enslaved and something about hoping and dreaming for a better tomorrow has allowed me to now be the mayor of Atlanta. And I truly believe that I owe that to my children and my children’s children. And if I’m not optimistic and if I don’t work and get up each and every day believing that there is something better in store for us, then I know that my children’s future won’t exist. So I’m thankful for my family and my children keep me hopeful. Mary C. Daly: Thank you. That was beautiful, really. Enrico, why do you still have hope? Enrico Moretti: I think that… I have a son and of course that’s a big part of it. But more in general, I think young people have a very different perspective on the problems that we, the old generation, have been struggling with. If you look at how they perceive a lot of the social issues and how they perceive environmental issues, they’re much more open-minded, much more sensitive, and, honestly, much more reasonable than the older generations. I bet you that this polarization that you see in the US today, if you measure it only among young people, will be much less pronounced. And I think there will be much more agreement on the big question that they need to deal with. Most importantly, climate change, which for me is one of the things that keeps me up at night. And so I think they’re a good reason to have hope because they’re much more pragmatic, much more focused on the real problems and much less on the divisions—the so- called divisions—that we’re all feeling. Mary C. Daly: Thank you. I also love the vigor with which young people come to all of the things that we are dealing with. So I appreciate that. Mayor McLean, what’s your reason for why you still hope? Lauren McLean: Mine is somewhat similar. I’ve got kids and I do see in them this amazing ability to move through this really tough time. Whether it be my son who’s almost 17 and able to make light of how school works and whether or not he’ll see people and when, and those pieces. And my daughter in college trying to figure it out and doing well. But even beyond just my kids, it really is for me at this time as—and Thanksgiving this year is special because historically Thanksgiving has been this time of reflection and to give thanks for the tough times that we’ve gone through—and this year more than ever that’s happening. And where communities are divided, so many people are pausing and thinking and being grateful for the fact that… Here in Boise, the people of this community have not forgotten how important it is to come together and address these tough challenges to reach out to their neighbor, to take care of each other. We’re grounded in that connection to place and people. That, for me, really sustains me on these tough days and gives me hope for the future. In addition to, as Enrico said, the number of people in our own city that are young, that more than ever have challenged us to address these really big challenges of our time: income inequality, health care, climate change. And through all that, we’ll find opportunity and be able to grow together. And it really is that combination of addressing tough challenges head on, seeing young people and the resilience and ability to do it, and then reminding myself daily how lucky I am to be connected to this place and the people in it. Together we’ll make it through this time. Mary C. Daly: Thank you. Magic, why do you still hope? Magic Johnson: Well, first, God blessed me to wake up this morning and all of us to wake up. And I’m always going to have this big smile on my face, right? When I wake up and I look at my wife, Cookie, my three children, and then now I have two grandchildren. I tell you a moment that really made me feel good. I’m part owner of the Los Angeles Dodgers. We had just went up 3-2 against Tampa Bay. So I call my son back in Los Angeles. I say, “Get on a plane and bring my grandson with you.” And so they flew out to Dallas and we actually clinched the World Series the next day. And my grandson started pulling on my pants leg and said, “Pop Pop, this was the greatest day of my life.” And I said, “Oh wow.” It just hit me, right? That he got a chance to see the Dodgers clinch. Then the other thing that really gave me hope is when people were protesting, it was all colors of people out there protesting. That made me feel good that everybody saw what happened was wrong and is wrong. So that made me hopeful as well. Then the next thing that really tore me up was yesterday. I’m watching CNN and they highlighted that South Dakota now is, man, one of the hotbeds when it comes to the coronavirus. And they were interviewing the patients and the doctors, and they got to the nurses. And just recently a Black nurse had come in from Florida to help out in South Dakota. And they asked her, “Why did you come to South Dakota out of all the places?” “Because I want to help. I want to save lives.” And I was like, “Wow. That’s what we all have to be about.” Right? She could have stayed in Florida. She could have went to Atlanta. She could’ve went to Detroit, Philadelphia, New York, Los Angeles. But she said, “You know what? I saw the cases rising. They needed more nurses in South Dakota who were qualified to take care of these incredible people.” And she wanted to be a part of the solution. So that gives me hope. Those are the three things: my two grandchildren, and people protesting of all colors, and then what that African-American nurse did to go to a place that she knows that not many African Americans live in South Dakota, but she wanted to be a part of the solution. That gives me hope. And Mary, what you’ve done today in bringing all of these incredible people together, that gives me hope also. So thank you. Mary C. Daly: Well, thank you. I will say to our listeners, if you didn’t find those answers inspirational on the week of our Thanksgiving in the United States, then watch it again because you really will. So I’m afraid we’re out of time for our discussion. I could have stayed and talked with each of you all day long. Thanks to everyone who’s tuned into our conversation and a big thanks to our guests, Magic Johnson, Mayor Lance Bottoms, Mayor McLean, and Professor Moretti, for such a wonderful dialogue. And thanks again for joining us, everyone. I want to just leave you with a few thoughts. The few thoughts I had are I’m very bullish on cities as well. I asked my guests that, but I will tell you I’m very bullish on cities and it all comes back to one single reason: I’m bullish on people. And we heard that today in the remarks. People, we want to be together. We understand the virtuous cycle that we all can do. And we understand that together we’re better. That if we collaborate, if we connect with each other, we can build resilient, sustainable places where all of our people can live. Ultimately, I think you saw this and heard this in the conversation today. I’m also inspired by the fact that we have such great leaders. I had four of them with me today. Those leaders are the people who commit—and I hope all of you join—to the idea that we want to collectively give our next generation of people, our children, a better future than the one we inherited. So next time on The New Future of Work, we’re going to tackle the topic of education. You heard how important that is right now. We’ll do that in the beginning of next year. In the meantime, happy Thanksgiving to you and yours. Be safe, wear a mask, hug your loved ones virtually, or if you’re lucky enough to, in person. And thank you to everyone for joining. Happy Thanksgiving. About our speakers Mary C. Daly is president and CEO of the Federal Reserve Bank of San Francisco and helps set American monetary policy as a Federal Open Market Committee participant. Since taking office in 2018, she has committed to making the SF Fed a more community-engaged bank that is transparent and responsive to the people it serves. Keisha Lance Bottoms is the 60th mayor of Atlanta. A daughter of Atlanta, Mayor Bottoms is committed to realizing her vision of One Atlanta—an affordable, resilient and equitable Atlanta—which stands as a model city for both commerce and compassion. A lifelong public servant, Bottoms is the only mayor in Atlanta’s history to have served in all three branches of government, serving as a judge and city councilmember before being sworn in as mayor. Leading with a progressive agenda focused on equity and affordable housing, Bottoms serves as chair of the Community Development and Housing Committee and the Census Task Force for the United States Conference of Mayors. A product of Atlanta public schools, Bottoms graduated from Frederick Douglass High School and received her undergraduate degree from Florida A&M University. She earned her juris doctorate from Georgia State University College of Law. An active member of the community, Mayor Bottoms is a member of the State Bar of Georgia, Jack and Jill of America, The Links, Incorporated, and Delta Sigma Theta Sorority, Incorporated. Having left the basketball court for the boardroom, Earvin “Magic” Johnson has successfully parlayed his skills and tenacity from the court into the business world as chairman and CEO of Magic Johnson Enterprises (MJE). MJE provides high-quality products and services that focus primarily on ethnically diverse and underserved urban communities. Still a commanding presence in popular culture, Johnson made history in 2012 when he became co-owner of MLB’s Los Angeles Dodgers. He also co- owns the Los Angeles Sparks of the WNBA, Major League Soccer’s Los Angeles Football Club, and eSports franchise Team Liquid. He continues to expand his influence through his many businesses that include: EquiTrust Life Insurance Company, and SodexoMAGIC, a food service and facilities management company. The Lansing native is constantly evolving and remaining relevant in a dynamic digital age by broadening his scope into infrastructure and technology. Through a newly formed fund, Johnson is investing millions of dollars on infrastructure improvement in the United States. He is also one of the leading investors in a number of minority- owned technology companies. Lauren McLean is the 56th mayor of Boise. She is the first elected female mayor in the city’s 150-year history. As mayor, she has led the fight against climate change, setting ambitious goals to lead the city into an environmentally and economically resilient future. Her vision is to create a city that is truly for everyone—one that offers equitable access to housing, living wage jobs, transportation, and a seat at the table for residents when decisions about the future of Boise are being made. Public service has been an integral part of McLean’s career and personal life. In 2001, she successfully led the historic Boise Foothills Open Space Levy campaign, securing the Boise Foothills’ for future generations. She served on Boise City Council from 2011–2019 and was voted Council President in 2017. She is an Aspen Institute Rodel Fellow, member of New Deal Leaders, and was accepted into the Bloomberg Harvard Leadership Initiative on Economic Recovery. McLean graduated with honors from the University of Notre Dame and earned a master’s degree in public administration from Boise State University. Enrico Moretti is the Michael Peevey and Donald Vial Professor of Economics at the University of California, Berkeley. He serves as the editor-in-chief of the Journal of Economic Perspectives and is a visiting scholar at the Federal Reserve Bank of San Francisco. He is also a research associate at the National Bureau of Economic Research (Cambridge) and a research fellow at the Centre for Economic Policy Research (London) and at the Institute for the Study of Labor (Bonn). Professor Moretti’s research covers the fields of labor economics and urban economics. He has received several awards and honors, including the Society of Labor Economists’ Rosen Prize for outstanding contributions to labor economics, the Carlo Alberto Medal, the IZA Young Labor Economist Award and a Fulbright Fellowship. His book, The New Geography of Jobs, has been translated in eight languages and was awarded the William Bowen Prize. RELATED The New Future of Work: Future of Education (March 22, 2021) What’s the fate of America’s cities? The New Future of Work: Remote Work (August 20, 2020) COVID-19 Is a ‘Forcing Function’ for Remote Work—What It Means for Your Future Office SHARE WHAT WE STUDY Inflation Labor Markets Monetary Policy Banking Financial Markets Cash & Payment Systems US Economy Global Economy Explore more topics OUR DISTRICT Alaska Arizona California Hawaii Idaho Nevada Oregon Utah Washington American Samoa, Guam, & Mariana Islands Tribal and Indigenous Communities RESEARCH & INSIGHTS Data & Indicators Blog Posts Publications NEWS & MEDIA Events Speeches News Zip Code Economies Subscriptions About SF Fed About Us Our People Join Us Subscribe to receive our newsletter and emails. SOCIAL LINKS: Also of Interest US Economy Business Cycles Artificial Intelligence in Banking What We Study © 2024 Federal Reserve Bank of San Francisco Site Policies Privacy Contact Us

Mary C. Daly (2020, November 22). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_20201123_mary_c_daly

@misc{wtfs_regional_speeche_20201123_mary_c_daly,
  author = {Mary C. Daly},
  title = {Regional President Speech},
  year = {2020},
  month = {Nov},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_20201123_mary_c_daly},
  note = {Retrieved via When the Fed Speaks corpus}
}