There is a strip mall not a stone’s throw away from my house that contains a Georgio’s pizza, a daycare center, and a plasma bank called “Freedom”. I live in a neighborhood in Cleveland that has a poverty rate upwards of 50%. For those not in the know, plasma banks are places where people sell their blood from which plasma is extracted through intermediaries, such as Freedom, to be sold at scale to pharmaceutical companies for various research and development purposes so it ultimately translates into high-end products that can be sold on the knowledge economy market. What’s a knowledge economy? The OECD definition described it as “trends in advanced economies towards greater dependence on knowledge, information and high skill levels, and the increasing need for ready access to all of these by the business and public sectors.”
As knowledge increasingly takes centerstage in the global market, knowledge industries, including next-generation extractive sectors, like plasma banking, are big business. As noted in the 2021 investigative report “Blood Money” by NPR’s Amanda Aronczyk, sales in the globalized plasma industry are around $25 billion a year, and two-thirds of the world's plasma supply comes from the United States. Two-thirds is a big number. The U.S. no longer exports two thirds of anything. Do Americans have an abundance of plasma, like the largest global cheese exporter, Germany, has an abundance of Limburger? No. It’s far less artisanal than that. The World Health Organization—after the disaster that was the Sandinistas creating a 24-hour town in Nicaragua known for plasma harvesting nicknamed “Casa de Vampiros”—came out with a blanket declaration against paying for plasma, particularly given the inevitability that the process would take advantage of the marginalized. Every country fell in line with that WHO declaration, including Nicaragua. There was, however, one exception. The U.S. Hence, the Freedom Plasma at the corner of my street.
A question. If the hypothetical you, the run-of-the-mill market Libertarian, were running a mom-and-pop plasma center and longed for a turnstile-type operation for blood-banking where would you put it? Well, near the source of supply—the characteristics of which include places with rampant macroeconomic displacement threaded with a widespread urge to scrape by. Where better than a high-poverty neighborhood in a Rust Belt city?
“You can think of blood plasma as a kind of strange version of a natural resource,” Aronczyk continues in her investigative report, “like its trees or iron or whatever. So, in that metaphor, the plasma collection centers are the places where you extract that resource. It's the forest or the mine.” Does that sound like progress? i.e., the veins of a human body acting as topographical canals to juice the global economy with the blood of the run-down? Of course not. It’s downright backwards in fact. And that’s exactly the point. It’s a point that will be unraveled as this essay stretches out to reveal just how twisted our sense of progress has become, including our ability to gauge whether a given city has succeeded as a society or not.
What Aronczyk is getting at when she compares the plasma bank to a lumber yard or coal mine is the notion that the global economy is fluid, and it evolves as the value-add of a given economic era changes along with the technologies of the times. There are not a few conceptual models out there that explain this change. But one I found helpful in my research is a model by economists Fisher and Clark called the “Four Sector Theory.” It explains that the global economy had a “Primary” stage that was natural resource-driven, leading to a “Secondary” stage that was industrial driven, followed by a “Tertiary” stage which is one of service provision. In Cleveland, this meant an economy led by the likes of Rockefeller’s Standard Oil in the late 1800s, to Ford in the mid-20th century, to Cleveland Clinic today. The latest, most emergent stage, “Quaternary”, is all about the cutting-edges of technology, such as big data, “the cloud”, and artificial intelligence.
It’s an economic change, however, that has landed hardest on the backs of the working class. Think about the union pipefitter who has been relegated to toiling the aisles of Home Depot and answering home improvement questions about fitting pipes. One way to show this evolutionary restructuring is to chart Manufacturing versus Service jobs across time. According to the Bureau of Economic Analysis, between 1969 to 2000, Cleveland’s Cuyahoga County lost nearly 154,000 Manufacturing jobs while gaining about 169,000 Service jobs.
But not all service jobs are created equal. In fact, a bifurcation in the labor market between higher-wage knowledge economy jobs, and lower-wage service jobs has taken place in the U.S. Knowledge economy jobs that are proliferating include occupations in education, healthcare, information technology, and professional and business services. Conversely, the lower-wage service jobs include retail, leisure and hospitality, janitorial, housekeeping, and administrative support. And lest we forget the gig economy workers that provide the labor supply that feed the profits of Big Tech, sans worker benefits or job security. “National survey of gig workers paints a picture of poor working conditions, low pay,” headlines a 2021 report from the Economic Policy Institute.
What does this all mean? Well, we have an economic evolution from Manufacturing to Services that began some time back, dislocating blue-collar workers from living wages. MIT’s David Autor recently argued that much of the working class didn’t graduate into knowledge economy work, but instead became subsistent on lower-wage service work. A “barbelling” of the labor market ensued, with knowledge workers on one end and service workers on the other. An early sermonizer of the term “knowledge economy,” management theorist Peter Drucker, envisioned such a scenario. “Knowledge workers and service workers are not ‘classes’ in the traditional sense…” wrote Drucker in 1992. “But there is a danger that … society will become a class society unless service workers attain both income and dignity.”
Pre-COVID-19, the scholarly argument for service worker wage stagnation was that pay was commiserate with returns to skill. The wage premiums are for those in the techne class, or for the arbiters of knowledge economy, as they provide the value-add in the current economic era. That’s true. But only partly, as that valuation came to coincide with a devaluation of manual, last-mile work as a rudimentary endeavor, so notes Thomas Edsall in his analysis, “Why Do We Pay So Many People So Little Money?” But COVID-19 exposed that devaluation as a self-serving fallacy, because as telecommuting normalizes and knowledge workers work from home in the safety of physical separateness, they can only do so if the necessities brought to their doorstep—e.g., sanitation, food, utilities—are in fact brought. If not, the knowledge stops.
This reality is increasingly being realized thanks to the backhanded wakeup call that was the plague. In his daily letters to his staff dated April 8th, 2020, for instance, Craig R. Smith, the Chair of the Department of Surgery in New York City’s Columbia Medical Center, discussed the risk associated with transporting COVID-19 patients from the ER to the infectious disease wing, noting the orderlies are selflessly stepping up. His concluding paragraph reads: “Transport is just one reminder that every contribution matters.”
Yet while it’s wonderful to wonder if those economic actors who’ve benefited from this disequilibrium have in fact seen the light, any eulogizing on the matter is exactly that: Air, wisps of well intentions. But until the moral fabric of this nation is rebuilt off the backs of the working class, the proof will be in the pudding. Or in that proving grown I’ve come to call the “geography of the body.” In 1970, life expectancy in the U.S ranked 18th out of 43 peer nations. With recent figures from the OECD, U.S. life expectancy today ranks 32nd, behind Communist China. This, despite the U.S. spending $11,900 per capita annually in healthcare services—by far the most among developed nations. What’s going on? At the risk of sounding pithy, the knowledge economy as it’s been constructed is demonstrably dumb.
In the book by Daniel Brian O’Leary Escaping the Progress Trap, the “progress trap” is defined as “conditions advanced economies find themselves in when science, technology and industry create more problems than they can solve.” Progress traps pockmark civilization’s march forward, and they seemingly do so now more than ever. Ecological calamities come to mind. As do disinformation campaigns that ride shotgun with our hyper connectedness and thirst for novelty. Who needs post-modernism when we can cosplay in post-truth?
Given my vocation centers around understanding how cities, like Cleveland, evolve, I’ve come to focus on the progress trap(s) that coincide with economic development efforts. A few barometers of progress have become standard-bearers, namely per capita income and tech job concentration. That is, as city leaders and the economic development cottage industry of consultants that advise them benchmark who is the stud and who is the weakling as the global economy modernizes, what they are gauging is prosperity and a local labor market that is thick with high-tech occupations. The shining city on a hill, here, is San Jose, CA, or Silicon Valley. It has both the highest per capita income among the nation’s largest 40 metros, with its Northern California cousin, San Francisco, second. San Jose also has the highest concentration of jobs in mathematical and computer occupations. Given such metrics, Silicon Valley has entered into its own stratosphere of achievement which, in turn, has made it the geography of aspiration. This has led to the inescapable copycat strategy to become “the next Silicon Valley”. Ethernet inventor Robert Metcalfe wrote that "Silicon Valley is the only place on earth not trying to figure out how to become Silicon Valley.”
Okay, this is what’s recognized about Silicon Valley: It’s flush with prosperity and the pieces parts of a cutting-edge economy. What’s less known is that San Jose and San Francisco also lead the nation in measures of disparity, as documented in the 2022 analysis by this author called “Disrupting Innovation.” San Jose has the second largest income gap between White and Black residents among big-city metros, trailing only San Francisco. It also ranked worst in the 90/10 wage ratio, or the gap between what the wealthiest 10 percent in a region makes versus the poorest 10%. This, folks, is what is meant by a progress trap. We have a system in which economic progress coincides, if not engenders, a societal regress. Why?
In a January 2022 New York Times piece entitled “Economists Pin More Blame on Tech for Rising Inequality, “the author interviews MIT’s Daron Acemoglu whose research showed at least half of the gap in American’s wages over the last 40 years was due to “excessive automation [of work]”, particularly work done by men without college degrees. Given less than one-third of men in the U.S. have a college degree, that’s a lot of displaced workers. “Modern market practices, or using innovation to excessively displace workers is, “not an act of God or nature,” continues MIT’s Acemoglu. “It’s the result of choices…we as a society have made about how to use technology.”
I think the phrase “how to use technology” is vital and wholly underexamined when trying to leverage technological advances for economic development gains. In her essay “Elon Musk Is the Id of Tech” the writer, Kara Swisher, recalls a conversation she had with an angel investor, Pejman Nozad, who was “bemoaning all the stupid start-up ideas that he saw littering the landscape. Silly social networks, dumb photo filter apps, yet another delivery service for millennials. ‘Silicon Valley,’Nozad] said, ‘is a lot of big minds chasing small ideas.’”
Enter Snap Crap. It wasn’t long back that San Francisco was seen as the golden child of the tech-driven urban renaissance. Now, with its rampant inequality parting the waters as a macro factor, what’s showing up downstream is the piling up of human feces in the commons. “A city covered in poop is so disgusting it has to be almost comical,” begins the Guardian’s Nathan Robinson in his piece “Why is San Francisco covered in human feces.” “But the uptick in street defecation is the symbol of a human tragedy,” Robinson continues, “People aren’t pooping on the streets because they have suddenly forgotten what a bathroom is, or unlearned basic hygiene. The incidents are part of a broader failure of the city to provide for the basic needs of its citizens, and show the catastrophic, socially destructive effects of unchecked inequality.” The answer? It is, perhaps predictably, a crowd`-sourced app named “Snap Crap” that—according to its developer—allows residents of San Francisco to request street and sidewalk cleaning from the city’s Public Works department by submitting a photo of something gross (usually crap) and sharing its location.”
California dreaming this ain’t.
This essay was adapted from the book Octopus Hunting by Red Giant Books
Richey Piiparinen studies the body, psyche, and soul of Rust Belt cities. He is the author of Octopus Hunting (Red Giant Books). He lives in Cleveland.
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