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Main Street, Los Angeles, 1870
Temple Street, looking west from Broadway, 1871
Hill and 7th, Los Angeles, 1913
Downtown Los Angeles, 2005
Los Angeles PopulationCity County
1880 11,183 33,381
1900 102,479 170,298
936,455
2,785,643
6,038,771
7,477,503
9,519,338
1920 576,673
1940 1,504,277
1960 2,481,595
1980 2,967,000
2000 3,731,437
Ten Largest Cities -1860New York 813,669
Philadelphia 565,529
Brooklyn 266,661
Baltimore 212,418
Boston 177,840
New Orleans 168,675
Cincinnati 161,044
St. Louis 160,773
Chicago 112,172
Buffalo 81,129
Ten Largest Cities -1880New York 1,206,299 +48%
Philadelphia 847,170 +50%
+112%
+349%
+104%
+117%
+57%
+58%
+316%
+29%
Brooklyn 566,663
Chicago 503,185
Boston 362,839
St. Louis 350,518
Baltimore 332,313
Cincinnati 255,139
San Francisco 233,959
New Orleans 216,090
Ten Largest Cities -1900New York 3,437,202 +184%
Chicago 1,698,575 +237%
+53%
+64%
+55%
+53%
+138%
+127%
+47%
+27%
Philadelphia 1,293,697
St. Louis 575,238
Boston 560,892
Baltimore 508,957
Cleveland 381,769
Buffalo 352,387
San Francisco 342,782
Cincinnati 325,902
Ten Largest Cities -1920Population Growth Density
+64%
+59%
+41%
+248%
+109%
+34%
+34%
+44%
+83%
+239%
New York 5,620,048 18,796
Chicago 2,701,705 14,013
14,248
12,748
14,128
12,670
17,197
9,280
14,745
1,577
Philadelphia 1,823,779
Detroit 993,078
Cleveland 796,841
St. Louis 772,897
Boston 748,060
Baltimore 733,826
Pittsburgh 588,343
Los Angeles 576,673
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New York Los Angeles
Carey McWilliams
Southern California: An Island in the Land, 1946
Why aren’t we all living in New York?
Why cities?Economies internal to firmsEconomies external to firms
Why not just one big city?What are limits to city size?
Preview
Concentration of workforce -> long commutesLong commutes -> high wagesHigh wages -> limit demand for labor
Classifying City Industry
Export – sold to residents of other citiesAutos in DetroitMovies in HollywoodPublishing in New York
Local – sold to residents of same cityRestaurantsDry cleanersGroceries
Where Will They Live?
Export industry in central business district (CBD)Employees live in surrounding area and commute to workCommuting is costlyAll employees want to live closeRepresent in model
A (Toy) Model City
Labor Supply and City Size
L number of workers
s square feet of residential lot perworker (assumed fixed for now)
F(L) city size necessary for L workers (distance to edge of city)
The Opportunity Cost of Workers
How much do firms have to pay to attract and keep workers?How well would they do in other cities?Net income=Wage-rent-commuting costNet income in other cities=Z
What Is Rent?
Residential compete with agricultural at city’s edgeRent of s units of land in agriculture:
Ra
Rent of s units of residential land at city’s edge
Ra
Commuting Cost
c commuting cost per period per mile
cF(L) cost per period of commutingfrom the edge
Net Income = Opportunity Cost
W: salary employers must pay to attractworkers
Net Income=W- Ra- cF(L)Net income in other cities=ZNet income equals opportunity cost
W- Ra- cF(L)=ZW= Z+ Ra+ cF(L)
The bigger the city, the higher the wage
workers
wage
Add Demand for Labor-> Equilibrium
W*
L*
W= Z+ Ra+ cF(L)
Demand for Labor
Not All Workers Live at City Edge
Rent offsets commuting costsRent at distance d: R(d)
R(d)+cd = Ra+cF(L)
R(d) = Ra+cF(L)-cd
Ra
rent
F(L) milesfrom CBD
Ra+cF(L)
Next Time
Henry George, Progress and PovertyDedication“How the Book Came to be Written”“The Problem”Pages 90-99 in reader
Use model to interpret George
Henry George
Born in 1839 in PhiladelphiaFormal education ended after grade 7Seaman at age 16Settled in San FranciscoBrief stint in New York, back to SFProgress and Poverty in 1879
