On the same day that the Palisades Fire began burning in January, a different kind of news dropped: Los Angeles’s city council approved a $1 billion project to modernize and expand Television City. To be designed by Foster + Partners, the 25-acre project will include 1 million square feet of office space and production stages, and infrastructure upgrades. The city is putting in just $6.4 million for traffic and landscaping, but mostly this is a private project at a grand scale.
Still, the expansion of Television City required city sign-off — and there were many groups in opposition to it. L.A. Councilmember Katy Yaroslovky wrote in a letter last year to the City Planning Commission why she supported the project:
In recent years, Los Angeles has faced significant challenges as film and television productions have increasingly shifted to cities like Las Vegas and Atlanta, and to other countries abroad … This exodus threatens not only our city’s signature entertainment industry, but also the middle-class jobs that have long supported Los Angeles’ families.
While other states and countries offer generous financial incentives to bring these productions to their regions, Los Angeles must make its own strategic investments to retain its competitive edge. The proposed expansion of Television City will help meet the industry’s growing demand for production space, keep valuable jobs in Los Angeles, and preserve the middle-class backbone that sustains our communities.
I must admit, when I read this, I thought: Middle-class jobs in cities? Do those still exist?
Urban job creation is focused on extremes
For many years, many cities have been focused on a kind of barbell economic development. On the one hand, they’ve focused on supporting top talent, private investment, and startup companies, all of which enrich the top tier and support lower-income residents through trickle-down economics. Innovation districts — whether Philadelphia’s cell and gene therapy cluster, Chattanooga’s AI push, or Tulsa’s remote worker strategy all loosely fit this model.
On the other hand, many cities are focused on addressing poverty through skills training programs that are geared toward people with less than a college degree.
In a weird twist, there’s a growing chorus that believes AI will be the force to rebuild the middle class.
While re-skilling manufacturing employees was once the vogue — think of Van Jones’ “green collar economy” in the early 2000s — few cities I know of other than New York and San Francisco have sustained a focus on the middle “maker” class in recent years.
This barbell-shaped approach makes certain sense— the middle class is shrinking across the country. And middle-class people are most likely to end up in suburbs, while cities remain popular with the very wealthy and the very poor. Why focus on middle-class jobs when they’re a diminishing constituency?
One of the big differences in our economy since 1970 is not just the decline of the middle class, but the decline of middle-class jobs.
In 1970, just about 10 percent of Americans had a college degree, now nearly 38 percent do. There’s been a massive growth of jobs that require a college degree — the white-collar knowledge economy in all its permutations — while many lower-skill jobs have been automated or shipped overseas.
But could AI change all that? In a weird twist, there’s a growing chorus that believes AI will be the force to rebuild the middle class.
How AI could grow the middle class
David Autor, an MIT professor who has been studying the polarization of the workforce since the 1990s, is one of the leading voices saying that AI will offer productivity benefits to lower-skill workers first.
Autor authored a NBER piece last year that says:
While the utopian vision of the current Information Age was that computerization would flatten economic hierarchies by democratizing information, the opposite has occurred … The unique opportunity that AI offers to the labor market is to extend the relevance, reach, and value of human expertise. Because of AI’s capacity to weave information and rules with acquired experience to support decision-making, it can be applied to enable a larger set of workers possessing complementary knowledge to perform some of the higher-stakes decision-making tasks that are currently arrogated to elite experts, e.g., medical care to doctors, document production to lawyers, software coding to computer engineers, and undergraduate education to professors. My thesis is not a forecast but an argument about what is possible: AI, if used well, can assist with restoring the middle-skill, middle-class heart of the U.S. labor market that has been hollowed out by automation and globalization.
Research about generative AI at work has also found that less experienced, lower-skilled customer service representatives saw big gains in their job performance after their company introduced an AI chatbot to help them with their work. The more experienced and higher-skilled reps did not see the same benefit.
According to NPR:
Two of Autor’s students at MIT conducted an experiment in which ChatGPT helped people do various writing tasks. They found that less-skilled writers ended up getting much better at writing, while high-skilled workers saw some but lesser benefit. As a result, inequality between the workers decreased.
While we bemoan the decline of the middle class, it does seem that what has happened is that more of the middle class is now upper-income — not necessarily a bad thing — while the percentage of lower-income residents has largely stayed the same.
But why haven’t we cheered these rising incomes? Those income increases are largely reserved for people with college degrees. But because education itself has grown increasingly expensive, the people with the most access to education — particularly graduate degrees — are those who are already coming from more affluent backgrounds. Rather than cheer the middle class becoming part of the upper-income tier, people see the elites as simply reinforcing their advantages.
In the future, AI may eliminate plenty of jobs, but it may also even the playing field between people with college degrees and those without.
AI stands to reverse at least some of this edge. AI will revolutionize how people learn, enabling more people to have individualized learning experiences that help them bypass the typical gates and gatekeepers of schools and universities.
But more than just that, employers will start to value AI skills over work experiences, and maybe even over diplomas. According to a Brookings brief:
The workplace transformation is already evident. In the U.S., 39 percent of the working-age population has embraced this new technology. According to a survey of skilled workers covering 31 countries, 66 percent of leaders say that they would not hire someone without AI skills. In Latin America, work experience is taking a backseat to AI expertise — 66 percent of executives would choose AI-savvy candidates over more experienced professionals who lack these skills.
In the future, AI may eliminate plenty of jobs, but it may also even the playing field between people with college degrees and those without.
Will AI increase “winner takes all” cities?
Although AI could increase the number of middle-class jobs, where those jobs are located matters.
So far it seems that jobs that use AI are primarily urban — a 2024 paper from the Department of Treasury’s Office of Economic Policy shows that AI exposure is much more likely in urban than rural areas. This could be much-needed good news for cities: If you’re more likely to catch the rising tide in cities, people might be more inclined to stay in the city at more cutting-edge firms than less tech-focused firms in the suburbs or rural areas.
But will AI-focused jobs end up in the same “winner takes all” cities of the past digital revolutions? Technological disruption has often led to geographical skewing. According to a Brookings Metro article on spreading the AI wealth:
Economist Enrico Moretti has shown that the U.S. high-tech sector has increasingly concentrated in a small number of expensive, mostly coastal cities, with the top 10 cities for computer science, semiconductors, and biology and chemistry accounting for 70 percent, 79 percent, and 59 percent of those inventors, respectively. Economist Nicholas Bloom and his colleagues studied 29 disruptive technologies from the last 20 years and found that the distribution of those jobs remained highly concentrated, with long-lasting advantages for the “pioneer” locations.
While these geographic advantages may be true for levels of VC investment and start-up growth, AI stands to offer a completely different model of economic growth.
The professional AI class — people educated enough to work with AI, but perhaps not innovative enough to launch a new start-up — is more widespread. And unlike innovation districts that benefit from agglomeration economies, using AI is more like using the Internet — relatively equally available to anyone in the U.S. anywhere.
Although one shouldn’t put too much credence in one report from a year ago, it’s interesting to see how new nodes of AI work are popping up in places like Northwest Arkansas and Virginia Beach.
How to build back the urban middle class
As Los Angeles is building out Television City, the middle class it envisions is that of set and lighting designers and the crew of TV shows. But this may be a dated view of the jobs of the future. To be sure, the film industry needs to be protective of its people. Hollywood is embroiled in a battle with AI companies — and rightly so. Their content has been the backbone of so much generative AI. But if the city really wants to build up its middle class, it needs to think about how it can capture the best talent at using generative AI to create commercials and shows — not just the IRL labor of putting productions together.
What should cities do to build back their middle classes? Perhaps it’s time for a new upskilling movement that is focused on people with high school degrees who are the ones likely to get the biggest boost from AI, helping them move past low-level jobs into higher-paying ones using AI skills.
Diana Lind is a writer and urban policy specialist. This article was also published as part of her Substack newsletter, The New Urban Order. Sign up for the newsletter here.
