Why are New York, Paris and Seoul losing people? To some observers, particularly the champions of the small and the suburban, this suggests an increasing irrelevance. To me, that’s missing the point.
The shrinking of big-city populations has been both oversold and misinterpreted. Population is growing in some global cities, like Shanghai, London and Chicago. And in global cities where population is falling or stagnating, from New York to Manila, there is an inflow of highly educated 20- to 35-year-olds, along with an outflow of the very young and the old. What’s happening is a brutal triage: apartments that once held families now hold one single investment banker. And the space required by that single banker for offices, restaurants and shops can be two, three, four times more than that required by the family he or she replaces.
This is, in part, why the urban glamour zone is expanding in all these cities, often dramatically. Shanghai has built 5,000 high-rises in just the past seven years, New York has transformed Times Square from derelict to prime real estate, and despite more than a decade of warnings about its imminent demise, Hong Kong’s property market still has so much momentum, it’s continuing to eat up more of its famous harbor. In global cities, fewer people often means more intense economic activity. If anything, the elites who populate these glamour zones need more specialized services than ever, because the more countries one operates in, the more complex the challenges become. Indeed, one of the most powerful but overlooked forces in the world economy today is the simple fact that firms, from agriculture to finance, are buying more services. Consider that while U.S. output grew at a 4.1 percent rate from 1999 to 2003, the U.S. output for finance, insurance and real estate grew 7.6 percent overall. Most economists have yet to pick up on the power of this trend, or what it means for big cities.
The general rule is that the most complex and international services (high-end law, accounting, finance and management) congregate in the center, while more standardized and national segments of those same services get farmed out to midsize cities. Thus Goldman Sachs has moved a whole series of more standardized jobs including automated mass trading to New Jersey and Connecticut, but is building what is probably the world’s largest private trading floor in the Wall Street area.
42. What can be inferred from the first paragraph?
43. Shanghai, London and Chicago are mentioned in Paragraph 2 to show ( ).
44. The smaller population needs more space in big cities because single bankers ( ).
45. What do Shanghai, New York and Hong Kong have in common?
46. How do most economists respond to firms’ buying more services?
47. What is true about Goldman Sachs?