Chicago: A Global City?

Deindustrialization, White flight, fiscal crises of the state, and policies of racial segregation and abandonment over the past twenty-five years have left inner cities and urban schools underfunded and in decay (see Anyon, 1997; Bettis, 1994; Kozol, 1991; Rury & Mirel, 1997). However, economic restructuring and globalization have led to selective reinvestment and re-invigoration of urban areas. Castells (1989, 1998) and Sassen (1994, 1998) argue that global cities, in particular, have become “dual cities” characterized by contradictions of disinvestment and reinvestment. They are marked by high growth and downgraded labor and by upscale, gentrified neighborhoods and redeveloped downtowns catering to arts, tourism, and leisure alongside isolated, poor African-American, Latino, and immigrant neighborhoods. These trends have important ramifications for Chicago’s school system.

During his first mayoral campaign in 1989, Richard M. Daley told Crain’sChicago Business, “This city is changing. You’re not going to bring factories back … I think you have to look at the financial markets — banking, service industry, the development of O’Hare field, tourism, trade. This is going to bean international city” (Phillips-Fein, 1998, p. 28). Daley has continued to promote this agenda set by Chicago’s business, financial, and real estate interests. Chicago fits many criteria of a global city, such as concentration of sophisticated producer services, international markets, and corporate head-quarters (Abu-Lughod, 1999). In the last ten years, Chicago has become a financial center and home to producer services and headquarters for 18 of thetop 500 transnational companies (Betancur & Gills, 2000a). The city has 7 of the top 50 U.S. exporters, and Chicago firms are among the world’s top ten in pharmaceuticals, oil, electronics, telecommunications, leisure services, and food processing (Moberg, 1997). Chicago has been called a “first order international financial center” (Reed, quoted in Betancur & Gills, 2000a, p. 27), and the value of the financial transactions of the Chicago Mercantile Exchange far exceed those of any other world city, including New York (Abu-Lughod, 1999). Chicago also dominates the global market in futures and options trading; in 1991 it handled 60 percent of all contracts (Sassen, 1994, p. 91). By1999, it had also become the nation’s fourth-largest high-technology center. Specialized services required by global financial centers (e.g., legal, technological, and consulting services) are expanding. Meanwhile, the Daley administration’s development policies have fed a boom in upscale housing, restaurants, and other amenities designed to attract the highly paid technical, professional, and managerial workers essential to a global city economy (Betancur & Gills, 2000a; Longworth & Burns, 1999). Whether Chicago is actually a global city, or global city boosterism is used to justify development policy, as some suggest (Sanjek, 1998),14 financial elites and city political leaders clearly are promoting a world city agenda.

Although a discussion of opposition to this trend is beyond the scope of this article, it is important to note that the mayoral administration of Harold Washington (1983–1987) promoted more balanced, redistributive economic development policies, including neighborhood job growth, efforts to stop plant closings, balanced growth of the downtown and of working-class neighborhoods, and greater public participation in decision making. After Washington’s sudden death in 1987, this emergent agenda was derailed along with the collapse of his political coalition of African Americans, Latinos, progressive Whites, and energized grassroots organizations. (See Betancur & Gills, 2000b; Clavel & Kleniewski, 1990; Ferman, 1996; Giloth & Meir, 1989; Squireset al., 1987.)

Chicago: A Dual City

Chicago also vividly exemplifies the deepening inequalities and destabilizing conditions that accompany the shift from manufacturing to information and service work. From 1967 to 1990, Chicago’s manufacturing jobs shrank from 546,500 (nearly 41% of all local jobs) to 216,190 (18% of all local jobs), while non-manufacturing jobs increased from 797,867 (59%) in 1967, to983,580 (82%) in 1990 (Betancur & Gills, 2000a, p. 27). Using data from the Midwest Center for Labor Research, the Chicago Tribune reported in 1999 that the city had replaced manufacturing jobs paying the equivalent of $37,000 a year with service jobs paying $26,000 (Longworth & Burns, 1999). In Chicago, 23 percent of manufacturing workers are union members, as compared with 13.9 percent of non-manufacturing workers (Phillips-Fein, 1998, p. 30). Because unionized workers are more likely to have health insurance and to participate in pension plans, the shift to service jobs has com-pounded workers’ losses. Moreover, manufacturers that have stayed in the Chicago area have tended to automate their plants and restructure for just-in-time production with greatly reduced work forces that often require more sophisticated skills but at stagnant or reduced wages (Moberg, 1997). For dis-located manufacturing workers, primarily African Americans and Latinos, the alternatives are often low-wage service jobs. According to data for 1998 from the Illinois Employment Security Agency, 76 percent of the job categories with the most growth in Illinois pay less than a livable wage, calculated at $33,739 per year for a family of four; and 51 percent of these jobs pay less than half of a livable wage (National Priorities Project, 1998). While some workers are recycled through the new labor positions, others are forced into the informal economy or the ranks of the unemployed.

Chicago’s drive to become a global city is increasing racial inequality. The Chicago metropolitan area now outstrips all others in the economic dis-parity between Whites and African Americans (Abu-Lughod, 1999). Average wages for Blacks for all occupations dropped from 66 percent of the corre-sponding wages for Whites in 1970 to 56 percent in 1990. Latinos, on average, earned 64 percent of Whites’ wages in 1970 and 50 percent in 1990. Moreover, manufacturing jobs declined most for Blacks and Latinos (Betancur & Gills, 2000a, p. 28), who, if they are able to find work at all, are moving from low-end manufacturing to the bottom of the service economy where wages are lowest, benefits often nonexistent, and work temporary and part-time. This downward spiral can be linked to processes of globalization and export of manufacturing. Ranny (1992) estimates that 62 percent of job loss in large manufacturing plants in the Chicago area was due to the movement of operations to other countries.15

The Geography of Inequality

In 1973, the Commercial Club of Chicago (CCC), an association of the city’s top business, financial, philanthropic, and civic leaders, published its Chicago 21 Plan. Since then, Chicago has been on a march to transform itself from a city of working-class neighborhoods, manufacturing zones, and a stagnating downtown. Nearly thirty years later, much of the 21 Plan has become reality, largely through the leadership of two generations of Daleys as Mayor, in alliance with business and financial interests (see Squires et al., 1987). Despite localized grassroots opposition to development and displacement since the early 1970s, the face of today’s Chicago is marked by upscale lofts and shops carved out of converted and abandoned manufacturing space, gentrified neighborhoods, and a central-core convention and tourist center with upscale housing and retail outlets, cultural venues, and parks. The not-so-public face is a city of deindustrialization, displacement of settled working-class and low-income neighborhoods, and socially isolated, deeply impoverished communities (Betancur & Gills, 2000a).16

The driving force behind this development is a powerful coalition of interlocking business associations and government units that promote urban growth and development. This “growth machine” (Logan & Molotch, 1987) is comprised of the Daley administration, real estate developers, legal and architectural firms, and corporate and banking leaders who control development in the city (see Betancur & Gills, 2000a; Ferman, 1996; Logan &Molotch, 1987; Squires et al., 1987). The growth machine strategy is to build the central business district — Chicago’s “Loop” — as a tourist and convention center and to gentrify its outer ring and working-class neighborhoods north, west, and south of the central city along the lake and key public transportationroutes. In the Loop and its fringes, luxury loft conversions and new townhome and condo sales in projects of ten units or more increased from1,006 in 1995 to 2,577 through just the first three quarters of 1998 (Allen &Richards, 1999). The Brookings Institution projects a 32 percent increase in residential use of the downtown during 2000–2010 (Katz & Nguyen, 1998).

In “hot” neighborhoods, housing prices have shot up 25 to 40 percent in the last five years (Schmid, 1998). In 1997, 93 percent of the city’s new houses were built in just seven of the city’s community areas (Phillips-Fein, 1998). Gentrifying areas are booming at the expense of working-class residents, who because of rising property taxes and rents are priced out of the neighborhoods where they have raised families, shopped, and established relationships. The city is simultaneously diverting taxes from schools, libraries, and other public services to infrastructure for development in select areas, while low-income neighborhoods and housing are allowed to deteriorate (Podmolik, 1998). Low-income African Americans and Latinos, in particular, are being forced out of rapidly gentrifying areas and are increasingly segregated in parts of the city and suburbs with the most depressed economic conditions (Betancur & Gills, 2000a). Like other major international cities, Chicago is a dual city — spatially, socially, and economically.