You’re wrong. People in cities do produce more and better work than others. They’re also easier to serve so more businesses are viable there.
Firms do not pay people more when rent is higher out of the kindness of their hearts, they do it because it’s worth the greater expense to them, because the workers are more skilled and more productive. Some of those higher wages accrue to landlords.
Exactly - if Google didn't get good business value from having so many employees working at a central HQ (and busing employees from SF to Mountain View), they wouldn't do it -- they could save a lot of money on salaries and office space by hiring a distributed workforce across the rural USA (and world).
They find the tangible and intangible benefits of a central HQ to be worth the price. They have so many small offices across the country that they could easily spread out their workforce nationwide and get out of the expensive Bay Area... if they felt it would provide value.
Does a developer in SF really produce 500k of work while one in Nevada produces 80k? Would Google and Facebook pay up so much money if they were stationed in a European city? No they wouldn't.
Cities provide more people because of their higher population densities. Some of the residents are world class experts. Most of them certainly aren't. Most of them aren't even very skilled. Companies pay more money because they have to, not because they want to. They have to be stationed in the area with the highest population density to have access to more workers. What if they had both high pop density and low rents? How would that be bad in any way?
If you really believe in the "markets will fix it" rhetoric about workers wages (not to mention the wage=merit idea) then why don't you let the free market fix the housing bubble by allowing taller residential buildings? Right now, almost all of the extra wage ends up in the hand of land owners. That can be fixed, so the wages will actually reflect how much value the workers produce, not how exclusive the area they live in is and how much status they have.
I find myself in vigorous agreement with you. As far as I’m aware no one gets 500K without being a known quantity, worth it.
Companies pay more money because they have to, if they want to get the people everyone else also wants to hire. That’s why the Steve Jobs wage suppression agreement happened. And then Facebook said hell no and wages rose, at companies that made enough per employee to pay the new market price.
High population density and low rents sounds like a great combination. If you know it a developed country that lasted please tell. I’d hold out more hope for high density and Georgist land value taxes so that the economic rents accrue to the government/citizenry not the property owners, insofar as it’s rent, not a return on investment.
Firms do not pay people more when rent is higher out of the kindness of their hearts, they do it because it’s worth the greater expense to them, because the workers are more skilled and more productive. Some of those higher wages accrue to landlords.
Relevant link https://en.m.wikipedia.org/wiki/Economies_of_agglomeration