Is There Trickle-Down from Tech? Poverty, Employment, and the High-Technology Multiplier in U.S. Cities

High-technology industries are seen as important in helping urban economies thrive, but at the same time they are often considered potential drivers of relative poverty and social exclusion. Little research, however, has assessed how high-tech affects urban poverty and the wages of workers with little formal education. This article addresses this gap in the literature and investigates the relationships among employment in high-tech industries, poverty, and the labor market for non-degree-educated workers using a panel of 295 Metropolitan Statistical Areas (MSAs) in the United States between 2005 and 2011. The results show no real impact of the presence of high-technology industries on poverty and, especially, extreme poverty. Yet there is strong evidence that tech employment increases wages for non-degree-educated workers and, to a lesser extent, employment for those without degrees. These findings suggest that although tech employment has some role in improving welfare for non-degree-educated workers, tech employment alone is not enough to reduce poverty.