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October 31, 2007

« The Outsourcing of Consumer Services | Main | Buff-Tor-Chester? »

Lots of interest in mega-regions generally and Tor-Buf-Chester around the blog-sphere.

Financial Times columnist, blogger, and "undercover economist" Tim Hartford, writes:

Richard Florida is now writing in the Globe and Mail. I enjoy his blog very much but confess to never having read his very successful books [RF: Ouch]. ... Florida and I, along with others such as John Kay, Martin Wolf and Robert Lucas, are huge fans of the late Jane Jacobs, who pointed all this out long ago. Anyone who has not read Jacobs is missing a treat. Start with "Cities and the Wealth of Nations".

I am a huge Tim Hartford fan and cite his stuff up and down in Who's Your City?

Over at Portfolio.com's Finance Blog, Felix Salmon adds:

Richard Florida doesn't explicitly mention Ed Glaeser in his column today in the Toronto Globe & Mail, but it can easily be read as a direct response to Glaeser's pessimistic view of Buffalo in City Journal. Glaeser says that any attempt to  revitalize Buffalo is doomed; Florida, by ontrast, places Buffalo in the context of a larger "mega-region" including Rochester, Toronto, and maybe even Montreal, Ottawa, and Syracuse. Looked at that way, he says, it's huge and vibrant, "a trans-border economic powerhouse that stretches from Buffalo to Quebec City."... To listen to Glaeser, then, infrastructure investment in Buffalo is doomed;  According to Florida, by contrast, it's desperately needed, especially when it comes to rail links across the Canada-US border, and much more efficient border crossings in both directions.

The folks at Strategy, Innovation and Change ask "Is Richard Florida the new Michael Porter?" -  which I take as high praise indeed, since he singlehandedly made strategy a field and is widely considered the number 1 business intellectual of his time, though I'm not sure this was exactly what they intended.

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Comments

Glen

It should be called 905-Buf-Chester .

It is to bad the City of Toronto has been unable to create any meaningful employment gains. Losing nearly 200,000 jobs over a period of time, while its adjoining neighbors create over 800,000 is surely a major sign of trouble. While this mega region may be productive, Toronto proper is not. Its high tax rates has chased out a number of smaller firms, while maintaining only the more attached ones. Toronto's tax climate towards business certainly makes incubating new and creative ventures difficult and is a recipe for failure.

Zoe B

Tor-Buff-Chester might be compared with other megaregions (or Tor vs Buff-Chester) regarding the importance of social services and tax rate. It could be a natural experiment. Does a higher Canadian tax rate suppress economic activity? Or, does the superior social net allow creatives to take larger risks because the cost of failure is not so high? Does the higher tax rate promote tax exile, moving to a lower-tax place after financial success? Do (hypothetical) tax exiles move to the US, or do our immigration barriers keep them out? Do tax and social service differences energize the megaregion or handicap it, compared to others in North America? Has anyone already studied this?

Gary Dare

Zoe, about fifteen years ago, Canadian businesses were threatening to leave southern Ontario for the Buffalo region for lower taxes and leave Toronto as a ghost town. Fifteen years later, the opposite seems to have happened.

While Canada still has higher overall taxes, the gap has narrowed. Net taxes in over a dozen states are now in the range of the lower-taxed Canadian provinces (Alberta, BC, Ontario). Most tax comparisons that I know from the Canadian media (Globe & Mail, National Post) seem to fall under two categories: a) low tax, low cost of living red states assuming a traditional family with one non-working spouse (to split income in joint filing) or b) comparing only US federal taxes to total Canadian (federal, provincial) which may be an honest mistake, with 42 possible state income tax forms and over 100 local income tax forms to consider. For me as a single person, it's been a wash in high tax, high cost of living blue states (now on my third tour through the US) and my motives for relocating anywhere in the world are based on business and an interesting, creative class-friendly environment (or some interesting place that's new to me, since India is a possibility).

And differing slightly with Richard Florida, for my case, most engineering centers are NOT creative class friendly places and it is a struggle to find a rewarding position in or near an interesting place.

Relocation can involve many factors including but not exclusively financial considerations. In my byline, is a link to an article on the narrowing of US-Canada migration southward versus northward, now down to about 2 to 1, based on award of permanent residence. Since half of the Americans coming to Canada do so as family, there are probably repatriate Canadian spouses and dual citizen children (not counted in stats) who likely narrow the net flow. There has also been a jump in temporary student and work visas to Americans in Canada. It used to be that it was easier for Canadians to relocate permanently to the US (traditional immigration) than vice-versa. The news now indicates that the reverse has become true.

Gary Dare

And in this byline, a link to a personal finance article for Canadians looking at relocation to the US. Note that the National Post, Canada's other national Toronto newspaper, is more conservative than the Globe & Mail so it would be a shock for many of its readers to see this quote from the article:

``But employees, especially in states with state income taxes, may pay more in income taxes, payroll taxes for Social Security and Medicare (which covers retired and disabled people) than they would pay in Canada in income taxes, CPP and EI contributions, and health-care premiums.

"I never recommend that people move to the U. S. just to save taxes," Wruk said. "It should be based on lifestyle or a job opportunity." ''

Note that the CPP payroll tax has a wage base of $40,000 while Social Security has a wage base of $97,500 which rises 6% per year on average.

Marty B

Great thoughts here....the binational Tor-buf-chester region is easily connected and already shared by millions...there can be nothing but excitement in having these areas work togetehr for the good of all three...what can we do next?

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