Why did San Francisco surge forward and LA fall so far behind?
Cities and regions have very different fortunes over time, and it is hard to predict them. The ups and downs of big metropolitan areas make a huge difference to the people who live in them, creating and destroying opportunity. They drive people in and drive people away. The ups lead to flourishing public facilities, while the downs lead to deterioration of the urban environment.
It is one thing to observe the conditions that, on average, separate successful or rising regions from less successful ones. But the averages only get us so far. Underneath them are chains of events; pathways that are defined and can become self-reinforcing. Consider Greater Los Angeles and the San Francisco Bay Area, two urban centers that have diverged sharply in recent decades. In 1970 they had about equal per capita incomes, but today incomes of people in the Bay Area are one-third higher than in Southern California. The Bay Area is in a group of metropolitan areas that took the “high road” in terms of incomes, including New York, Chicago, Boston Washington DC and Philadelphia. Greater Los Angeles’s income growth is more like that of Detroit.
Evolution of Per Capita Personal Income, 1970-2012