Month: May 2017

Gold Diggers in the Gold Rush Era

I was reading a Tyler Cowen/Raj Chetty interview on social mobility when I stopped at this statistic about San Francisco’s single ladies:

CHETTY: So if you’re in your mid-30s, only something like a quarter or less of girls growing up in the Bay Area are married.

WHAT???

The San Francisco Bay Area is like 75% male. Or at least the tech companies are. Ladies!! The odds don’t get any better than this!! Why are you all unmarried??

The odds are good, but the goods are odd.

Actually the odds used to be even better. In 1849, the San Francisco male-to-female ratio was over 50:1. Miners were rushing to California to find gold, but few women wanted to accompany them.

You’d think that the resulting gender disparity would present a fantastic opportunity for gold diggers to have their pick of the litter, but Nope. Even then, the female marriage rate was low: As the owner of a scarce resource, it did not make economic sense for a woman to sell out to the highest bidder. Rather, the optimal strategy was to extract rent from as many clients as possible.

Public attitudes toward prostitution were different back then. California was a brand new state with no established class structure, and aristocracy was defined by anyone with a lot of disposable income. A woman could achieve social mobility simply by being an industrious courtesan. Those of easy virtue became the most well-dressed and respectable ladies, and only the most reputable gamblers could afford to patronize them.

In effect, the women were too successful in their careers to settle down. But they weren’t exactly marriage material either. Before Maytag invented home appliances, women were responsible for a lot of manual labor around the house. Flour had to be milled, butter churned, and clothing beaten, washed, and wrung.

San Francisco women were doing none of this — the opportunity cost was too high. Even if a girl didn’t work in a brothel, saloons and gambling-houses would gladly pay her to hang around and attract customers. A woman could earn an ounce of gold just by sitting at a card table for an evening.

Eligible bachelors didn’t want a wife who wouldn’t do domestic work. As one resident describes it (1849):

The greatest privations that a bachelor is in this country exposed to, consist in not being able to furnish himself with clean linen when he desires… To induce some of the few women that are here to condescend to wash their linen for them, they have to court them besides paying six dollars a dozen.

Tragic. Well, immigrants were happy to do the jobs that American women wouldn’t do. Tens of thousands of Chinese had arrived hoping to find work in the gold mines, but Americans didn’t want the competition. The Chinese turned to laundry shops instead (later on, railroads). By 1900, one in four ethnic Chinese worked in a laundry. Hence the stereotype.

They were all men, because Chinese women weren’t allowed to enter the country.

Women had too many career opportunities to consider the prospects of marriage. Men learned the important lesson that if it flies, floats, fornicates, or folds your laundry, it’s cheaper to rent. The result is that we get this strange dynamic where Professor Chetty will never have grandkids:

CHETTY: I remember telling my wife, “I don’t think we need to worry. Our daughter will be fine in terms of earnings. It’s just that she might not be married if we move to California.”

COWEN: So, you’ve lowered your expectations for grandchildren?

CHETTY: Yes. [laughs]

Ha ha ha! Why can’t my parents see the humor in becoming a genetic dead end?

Rich Inner Cities

Income map, Philadelphia vs Paris. Green means rich, Red means poor.

Here’s a video that explains why European inner cities have the most expensive homes, while American inner cities are full of slums.

Europe’s cities were built in the Middle Ages, before cars or railroads. Rich people paid for expensive homes in city centers so they could have the shortest walk to work. An urban home will naturally be limited in size, but prior to the Industrial Revolution, it didn’t make sense to have a massive house: It’s hard to keep a home warm and lit with candles and wood charcoal alone.

inner-city Paris

American cities were built in the 19th century, after the invention of railroads and coal energy. Rich people paid for big expensive estates along railroad lines because they could, and train tickets were so expensive that poor people could not afford to commute.

Suburban home along Philadelphia Main Line
Typical commute to work

This configuration remained for centuries, reinforced by the fact that American inner cities have much higher crime rates than European ones.

Oh but hey America’s most expensive cities are turning inside out!

These days, the ability to commute to work is no longer reserved for the elite. In fact, long commutes are for suckers. Plus, it seems that having a gigantic house is overrated. Rich people are having fewer kids, and it doesn’t make sense to maintain a huge estate for two employed adults and a stay-at-home dog.

According to Bloomberg, Americans now want to live downtown. The zoning regulations of dense urban areas have made buildable lots incredibly expensive relative to the construction cost of a new home, thus urban developers focus on building high-end units to maximize their profits. If only rich people can afford to live in city centers, crime rates decrease, and this creates a virtuous cycle that makes Seattle look more and more like Paris.

There’s just one thing though. The opposite seems to be true in metros like Dallas, San Antonio, Phoenix, Atlanta, and pretty much everywhere that isn’t Seattle-San Francisco-New York. But other than those non-entities, wealthy Americans are unilaterally flocking downtown, I guess.

Good Zoning Laws Make Good Neighbors

Three years ago, FT had an article praising Tokyo’s laissez-faire zoning laws. Landowners can build and demolish as they see fit; the rules are set at the national level, so local governments have no say in the matter.

The article suggests that San Francisco could learn a thing or two from relaxed development rules. Ha. Hahahahaha. Why on earth would San Francisco residents want to liberate housing development??

In Japan, a housing development is the developer’s business. In San Francisco, it’s everyone’s business. Neighbors appeal building permits based on traffic considerations, shadow effects, environmental impact, historic preservation, and all manner of other stuff.

Here’s what they really want to preserve:

The upper blue area is North Beach and Little Italy. The red cluster to the right of that is Chinatown, port of entry for Chinese immigrants during the railroad and Gold Rush years. The red blocks on the west are the second, third, and fourth Chinatowns, formed after 1965. The orange area is the Latino Mission District; the dense blue spot down south is the Jewish retirement community. Source: Dotmap

San Francisco is culturally diverse, but the diversity* is strictly segregated. We call this historical character, and character can only be maintained by keeping outsiders out. Neighborhoods can’t exactly come out and impose cultural segregation, but they can enforce zoning laws. By blocking new buildings and preventing the renovation of old ones, residents ensure that the demographic makeup stays the same year after year.

When policy initiatives aren’t enough, diversity can be preserved in other ways. In Chinatown, landlords often advertise vacancies only in Chinese newspapers and sites, ensuring that incoming residents are also Chinese. The Mission District promotes gentrification resistance movements such as the Yuppie Eradication Project and Causa Justa, which tracks the number of Latino households displaced by white residents.

In any other city, we might start slinging the r-word around. Here in San Francisco, it’s a reasonable fear of displacement. I suspect that most of what we call racism today is this same type of fear.

City residents are right to be scared: The Fillmore District used to be known as the center of West Coast jazz, the Harlem of the West, until it was targeted for redevelopment in the 1960s. Urban renewal destroyed the Fillmore’s low rent housing, forcing tens of thousands of diverse residents out of the neighborhood. The development was widely criticized as a “N…. Removal” project. Today, the Fillmore District is just another place where rich tech workers live.

The area formerly known as the Harlem of the West

San Francisco is frequently charged with NIMBYism, in which wealthy landlords are accused of blocking development to uphold property prices. While it’s easy to rip on the landed gentry, low income residents are actually some of the most vocal opponents of new development.

75 percent of San Francisco’s rental stock is under rent control, and many units are priced so far below market rates that no amount of free market development could keep these tenants in their homes. The locals don’t want to compete with newcomers for business and housing because they know they can’t.

It’s these charming pockets of xenophobia that have preserved San Francisco’s historical character and made it such a desirable place to live. If SF were to liberate its zoning regulations, it might turn into San Jose.

Don’t get me wrong; San Jose is a lovely metropolitan area — I practically live there myself. San Jose is an older city with a history that goes back to the 18th century Spanish pueblos, but its historical character has long been displaced by the urban developments that rich hipsters are now trying to shoehorn into San Francisco.

Site of California’s first pueblo-town in downtown San Jose. We have the Fairmont Hotel, a Sheraton, and the Silicon Valley Capital Club, a private club for rich people.

So we can either have a bunch of segregated areas with rich cultural history and strict zoning plans, or a culturally dispossessed Frappuccino. It’s worth noting that, despite offering lower rent and easier access to the likes of Facebook and Google, Silicon Valley tech workers would rather not live in San Jose.


*I realize that the word “diversity” is constantly evolving. Here, I use it in the liberal sense of having representation from racial minorities.

Family Road Trip

Hello! I’ve been offline for the last two weeks. What’d I miss?

Judging by the headlines in my inbox, the last ten days have seen enough drama to fill a whole year. Bad stuff abounds, but this is what every week looks like to those who get sucked in.

A lot has happened; nothing’s changed. The real world is actually incredibly dull. Dullness doesn’t sell ads, so the media has to manufacture a continuous stream of outrage to fill the void. The coastal elite don’t live in a bubble, they live in a screaming echo chamber. No wonder we’ve all gone insane.

Wite Trash Partee hosted by a Chinese restaurant in Wyoming.

From Baby Farm to Table

In 19th century England, it was quite common to find adverts soliciting for the adoption of infants.

Ah how nice. Here’s one quoted from James Greenwood’s Seven Curses of London:

NURSE CHILD WANTED, OR TO ADOPT—The Advertiser, a Widow with a little family of her own, and a moderate allowance from her late husband’s friends, would be glad to accept the charge of a young child. Age no object. If sickly would receive a parent’s care. Terms, Fifteen Shillings a month; or would adopt entirely if under two months for the small sum of Twelve pounds.

Spoiler alert: There was no adoption going on. The childless couple and kindly widow are actually thinly veiled offers to dispose of one’s infant for a fee.

Unwed mothers had a tough time during the uppity Victorian age. In response to widespread complaints about welfare abuse, Parliament passed the Poor Law of 1834 with a specific Bastardy clause barring the mothers of illegitimate children from child support. As Thomas Carlyle argued, giving them relief would effectively become “a bounty on unthrift, idleness, bastardy and beer-drinking.” It’s not so different from Bill Clinton railing against the welfare queens.

So what’s a single mother to do? Orphanages refused to accept bastard kids because immorality was thought to be a disease, and children conceived in sin might contaminate the minds of legitimate orphans. Similarly, unmarried mothers couldn’t find work because no one wanted to employ a moral imbecile. That’s not my terminology – The 1913 Mental Deficiency Act specifically classified unwed mothers as moral defectives to make sure they were institutionalized.

To avoid this trouble altogether, the mother of an illegitimate newborn might simply pay a baby farmer to poison the child and throw the body in the Thames. Extremely late-term abortion, if you will.

Baby farming was a lucrative profession: Amelia Dyer reportedly got paid to dispose of four hundred infants before getting caught. Several decades’ worth of cases came before hers, but baby farmers were rarely convicted if investigated at all. Given the high infant mortality rate and poor medical science of the day, it was difficult to attribute a death to murder vs neglect – and there was nothing illegal about neglect. There simply wasn’t much sympathy for unwanted babies. The Irish Potato Famine was going down, and people were actively starving to death.

There’s a Chinese idiom, 易子而食. It literally translates to “Swap kids to get food.” The phrase first appears in a 4th century BC text describing events of the Zhou Dynasty Spring and Autumn period [1]. Ancient Chinese parents were understandably reluctant to slaughter and consume their own offspring; thus in times of famine, parents would exchange children with their neighbors and eat each other’s kids instead.

To this day, I’m not entirely sure if 易子而食 was a real thing or if it was just a story that my parents told to scare me into submission. Come home with good grades or we’ll eat you, was the Battle Hymn of my Tiger Mother.

Sometimes I wonder if Jonathan Swift’s Modest Proposal was really all that modest.

References:
1. 春秋左傳 – Chun Qiu Zuo Zhuan Book VII: 宣公十五年 (English translation)
2. James Greenwood, The Seven Curses of London, 1869.