Okay, I was willing to tolerate this gibberish when it came from from Arthur Nelson in a CNN article, but not when it comes from Robert Reich—who is actually influential—in a NYT op-ed. Here's Reich on the effects of high gas prices:
It used to be that the very poor inhabited central cities and the working class lived in the inner suburbs, but now that the rich are moving back into town, the poor are being pushed outward. Retail, restaurant, hospital and hotel employees who work in upscale cities often must look 30 to 50 miles from their jobs for affordable housing. Their longer commutes mean they need to spend more on gas.This is nonsense. If $4/gallon gas has any significant effect on household location patterns at all, the effect will be to compress the existing central city/suburban model. The rich will not force the poor out of the central city and into the suburbs. Not unusually, Ed Glaeser provides the voice of reason:
More permanent changes in lifestyle will probably require more permanently high gas prices. And even then, not all economists believe they will hold much sway in where people decide to live. "I'm a big supporter of cities and I would love to see this happen," said Ed Glaeser, a Harvard economist. But "it's hard to imagine that this is going to have a huge push into the city." Glaeser contends that only commuters who drive 50 miles or more to and from work could see a significant savings in gas compared with other factors that influence the housing market. School systems and tax systems are set up to favor the suburbs over the city, he said. Americans are far more likely to trade in gas-guzzling vehicles than homes, he said.Transportation costs aren't nearly as important to the rich as they are to the poor. And Glaeser should know. In a recent article in the Journal of Urban Economics, titled "Why do the poor live in cities? The role of public transportation," Glaeser, Matthew Kahn, and Jordan Rappaport found:
We estimate that public transportation is two to three times more important than the income elasticity of demand for land in explaining the central location of the poor. Indeed, including transport modes suggests that we should always expect the poor to centralize, at least at US levels of income inequality. ... Across cities, the poor are likely to live in cities with more public transportation and the poor are less centralized when the suburb–central city gap in public transit is less. ... Within cities, proximity to public transportation does well at predicting the location of the poor.Moreover, contrary to Reich's claim that more rich people moving back to the central cities would harm the poor, all the available evidence on gentrification suggests that more rich people moving to the central cities would be good for the poor. For example, economists Jan Brueckner and Stuart Rosenthal found that when the rich are drawn back into central cities from the suburbs:
"On net, ... the difference in economics status between central and suburban neighborhoods is expected to narrow by up to 18 percent mean income, a large effect."In other words, if high gas prices induce the rich to move back to the central cities from the suburbs, income inequality would actually be reduced. For someone who cares greatly about income inequality, Reich doesn't demonstrate a solid grasp of the factors affecting income inequality in this op-ed.