Can Chicago Be Saved?

Among the nation's biggest cities, Chicago lags behind, a victim of political division, a big-company mentality, and its own past success

Tweet

TO THE POET IT WAS THE "CITY OF the big shoulders," the paradigm of a thriving metropolis in the American industrial era. To the politician it was the "city that works," proud, hardworking, and so full of opportunity that blue-collar immigrants would write the folks back home, "If you can't find a job in Chicago, you can't find one anywhere."

Carl Sandburg and Richard Daley are gone now, and so, alas, is the Chicago that each helped to define. Although it is still a big and vibrant city, Chicago's manufacturing base has been eroded, its growth slowed, and its economic future is uncertain. Like the large industrial corporations on which it was built, Chicago has only slowly and reluctantly adapted itself to the entrepreneurial era that has helped to sustain or revive so many other cities.

The figures on the INC. Metro Report tell part of the story. Of the 14 biggest cities with work forces larger than a million, Chicago is able to beat out only the much-maligned Cleveland. Not only does Chicago lag behind Sunbelt boomtowns Los Angeles and Miami, and high-technology meccas Boston and San Francisco, but it also takes a backseat to such midsize Rustbelt towns as South Bend. To think of Chicago is to think of none of the new companies or industries that are helping to reshape the American economy. The new Chicago millionaires are not industrialists or retailers or high-tech wizards, but successful traders and manipulators on the commodities and financial futures exchanges.

Why?

In many ways, Chicago is a victim of its own past success. At the turn of the century, Chicago was the colossus among American cities. It had played a central role in developing the nation's agricultural production with its tractors and tools (International Harvester) and shared in much of the nation's agricultural wealth (Beatrice Foods). Its railroads -- including Chicago & North Western and the Burlington Northern lines -- pioneered the form of the modern corporation, and it was in Chicago that factories produced the steel for the tracks and the Pullman cars that rode over them. Through it all, Chicago's corporations thrived on mass production (the meat packers once clustered around the famed Chicago stockyards were the original disassembly lines), mass distribution (the Merchandise Mart of Chicago), and mass marketing (Chicago-based Sears Roebuck, Montgomery Ward, and Spiegel). Chicago's blue-collar work force turned out just about everything -- from engines and machine tools to such durables as televisions, radios, telephones, and bicycles -- for a growing and prosperous economy.

Trouble came late to Chicago -- and was seen even later. Because of its size and diversity, Chicago was able to flourish through most of this century, even after the bottom fell out of economies in one-industry towns such as Pittsburgh and Detroit. But Chicago seemed determined not to learn from their examples. Lots of people had made lots of money, in the process creating a comfortable, conservative business culture that led managers to resist change and to ignore problems.

Once it began in the early 1980s, the pace of decline was staggering. Between 1979 and 1984, the city lost about a quarter of its manufacturing employment, 170,000 jobs -- more manufacturing jobs than there were in either Philadelphia or Pittsburgh, and nearly as many as there were in Cleveland. A study by Robert Sheets found that nearly two-thirds of those losses were the result of active disinvestment by the large corporations that had dominated the region's economy. Some, like General Electric's Hotpoint unit, planned to move production to the Sunbelt, while others, like Zenith, moved much of its production offshore. Bell & Howell, the camera maker, has virtually gotten out of manufacturing.

Chicago's small-business sector was in no position to pick up the slack. For one thing, it was relatively small: the fraction of establishments employing more than 250 employees was higher in Chicago than in any of the other major industrial cities. And small companies -- particularly manufacturers -- found that their fortunes were closely linked to the fortunes of the region's large corporations. In Illinois as a whole -- and undoubtedly in Chicago in particular -- the ratio of secondary to primary manufacturing establishments was 13 to one, compared to a national average of 7 to one. As such companies as FaitAllis, in Springfield, and International Harvester, in Rock Island, either shrank or collapsed altogether, the shock waves were felt along assembly lines all over Chicago.

 1 | 2 | 3 | 4 | 5  NEXT