Written in 1995
by Alex Marshall
When the computerized letter sorter at the central post office in Washington, D.C., can’t read the handwriting on an envelope, it flips it into a slot where a live person can look at it.
A person in Greensboro, North Carolina. There, the worker sees an image of the letter on a small computer screen, reads the address, and types it into the computer. Back in Washington, a printer spits out a thin black bar code across the bottom of the envelope-which routes the letter to its destination.
The facility in Greensboro is one of the remote encoding centers that the Post Office is setting up around the country. In these facilities, rows of workers will help computers in other parts of the country route letters.
The mechanism is an example of trends that are restructuring the economy of cities and thus their physical face as well. New technology, principally computer related, is allowing companies to get rid of jobs, move jobs out of center cities and consolidate jobs in back-office suburbs.
Various prognosticators have speculated on this trend and the effect if will have on the economic and physical structure of center cities and metropolitan areas. One of the first to put some solid numbers and facts around the speculation is a new report by the federal office of Technology Assessment, entitled the The Technological Reshaping of Metropolitan America
The 232-page report says new computer technology is leading to further abandonment of downtowns and core cities, and new development on the fringes of metropolitan areas.
In other words, sprawl. “The new technology system is creating an ever more spatially dispersed and footloose economy, which in turn is causing metropolitan areas to be larger, more dispersed and less densely populated,” says the report.
We are in a post-industrial metropolis, the report posits, an era that begun in roughly 1970. Its no longer as simple as downtowns versus suburbs. Instead, old dichotomies between cities and suburbs give way to a more spatially diversified and complex ordering of economic space.
In this new order, some downtown business districts and center cities have thrived, even if most haven’t. In general though, outer suburbs have boomed in population while core cities have stagnated or declined. The Northeast as a region has lost a million manufacturing jobs between 1980 and 1990.
Most recent commentators have focused on the effects of very visible new technology – the personal computer, the modem and the fax machine – and what it will do to re-arrange how people live and work.
Architect Michael Pittas predicted in 1994 (June 1994 Metropolis), that in a decade or two telecommuting would turn center city office districts into “dinosaurs” and “may be the prelude to the extinction of the modern office building as we know it.”
Pittas has redesigned office buildings to allow companies to operate with only a fraction of the usual office space by having many workers telecommute. Because of this work, Pittas was speculating on the end result of a trend that allows the graphic designer in her mountain cabin in Idaho to modem her work to New York.
But even more significant trends on cities and working are being caused by less visible and less publicized technology that is shifting the way entire industries do business, according to Robert Atkinson, who directed the Office of Technology study.
Atkinson spoke not from an office but his home in Northern Virginia. The Office of Technology Assessment, for which Atkinson directed the study, no longer exists. The Republican Congress killed the OTA in a round of budget cuts in 1995. The Reshaping report came out after the office had been killed and Atkinson was speaking on his own time.
Computer technology not related to the personal computer can allow a company to consolidate far-flung offices into a few back offices set up in outer Indianapolis or even India. Many of these workers come from downtown locations, where practicalities forced companies to house relatively non-elite jobs. Because of computers, companies have eliminated many such jobs or moved them outside downtown.
Take the U.S. postal service, said Atkinson. It centralizes human letter readers in Greensboro because it is cheaper than having each central post office, usually located in or near downtown, have its own set of workers.
A variety of unlikely services are still kept downtown, Atkinson said, but this may change as technologies continue to evolve. Banks, for example, still locate check processing facilities near or in downtown, despite the fact that these are low-paid, relatively menial jobs taking up expensive real-estate. Such facilities still need to be near a large central post office, Atkinson said, because processed checks need to be mailed out as quickly as possible. This is both to comply with federal regulations, and more importantly, to gain as much interest or “float” in the few days when the check is between banks.
But new technology like debit cards and check imaging, which promises to replace physical checks with images that are then transmitted from supermarket to bank, mean the use of the paper check is dwindling fast.
These technological changes are not just affecting center cities. The economy of the country is becoming more monolithic. Smaller branch offices or services, like the neighborhood insurance office, that were once marbled through most towns are now being eliminated as computer technology makes them unnecessary.
Some banks now process loans over the phone. Claims adjusters call up policies on a computer and dont need to see policy holders as often in person. Because of this, companies are closing dozens of smaller offices.
The report notes that NYNEX, for example, the baby Bell phone service in New York, once had 133 customer service centers; now it has seven. Aetna now operates 22 underwriting centers nationwide instead of 55. Allstate is going from 28 policy processing centers to just three.
Such trends have huge implications for cities, greater than the ones causes by the growth of personal computers, Atkinson says. There are basically two trends at work.
One is the shift of jobs and people out of center cities and older suburbs, and trend that has taken place over the last 50 years but could accelerate with new technology.
The other is the winner-take-all economy, that is dividing individual companies and cities into winners and losers. Under this trend, some center cities will do well or even thrive, while others will fall even more steeply into disrepair and poverty.
The command cities in a world economy-like New York, London or Tokyo-may survive or even thrive in the new world. This matches analysis by other analysts who have noted that many of these world cities have actually halted or reversed their population losses, with similar trends in crime and per capita income. That’s because the elite bankers, stock brokers, and lawyers will probably still cluster in these big cities. And a city like New York can still be a very desirable and fashionable place to live if you have a lot of money.
According to the report, smaller, mid-sized cities must find “niches” in the global economy. Atkinson notes that Gary, Indiana, a declining core city, used low-interest development loans from HUD to win a postal service remote encoding facility similar to the one in Greensboro.
As technology leans against some inner cities, governments need to adjust rules that presently favor development in the suburbs, the report recommends. Environmental rules now often make it prohibitively expensive to develop old industrial sites in cities, while the mortgage interest deduction rules and standard development policies actually subsidize the construction of new subdivisions on raw land that lead to greater air and water pollution.
In addition, the report recommends that cities, with help from the federal government, initiate job-skill training programs for their residents.
“It’s not just that cities are going to lose jobs, Atkinson says, it’s that the economies of cities are restructuring to have more highly skilled functions that still require face to face contact. But inner cities don’t have a skilled worked force.”
Thats not quite true. Some cities do have highly skilled workers. Its hard to swing a stick in parts of Manhattan or Washington without hitting some overly-talented individual. But its also true that even New York, which is doing better than most cities, has huge percentages of under-skilled, under-educated residents who will have no chance at the good-paying, skilled jobs that still locate downtown.
To counter these trends, and help soften their blows, the report lists 18 policy options, ranging from increasing small business loans to businesses in urban core area, to requiring HUD to assess and quantify in what ways public policies subsidize sprawl.
No wonder the Republicans killed the agency. It was doing exactly what it was designed to do: assessing technology and offering solutions, including ones that relied on government.
Though the OTA initially enjoyed bipartisan support, Atkinson says it was eliminated because of the antipathy on the part of more ideological Republicans, particularly the new freshmen. He notes that the OTA lost points with some conservatives when it was asked to examine the Star Wars technology in the mid 1980s and concluded it would not work.
“It’s unclear whether they really wanted an agency that would provide them with independent critical analysis that wasn’t ideologically based, ” Atkinson says.
The central question raised by the OTA report is whether people will still live in central cities if they don’t have to. If technology allows both people and industries more freedom to choose where they live, will many choose to live in or near downtown?
The answer is clearly yes – if cities can compete with suburbs as pleasant places to live. National Public Radio recently ran a report about how people are moving back to center cities to get away from the congestion and chaos of the suburbs. The very trends the report speaks of are causing the suburbs and the hinterlands to not be the pastoral oasis that many have in mind when they buy a house in the suburbs.
If older cities can maintain their infrastructure, their neighborhoods and keep crime down, they can compete quite successfully with the land of K-marts and freeways as a pleasant place to live. It’s quite possible that the next century will see an even greater return to the city by the middle and upper classes. New York, Paris and many other major cities have halted their population decline in the last five to 10 years, several studies show.
So maybe that graphic designer, given the choice between a mountain cabin in Idaho and a loft in Soho, might just choose Soho.