It's "urban renaissance" time in the City of Big Shoulders. Suburban families are coming back to the city, yuppies are moving into renovated factories, and "empty-nesters" are buying weekend luxury homes in the Loop. Rising high tech employment in Illinois has caused some to dub the region "Silicon Prairie," and gritty industrial neighborhoods--Nelson Algren's playground--are giving way to restaurants and galleries. Chicago's biggest daily, the Tribune, urges development of "luxury high-rises and townhouses" on the grave of South Works, U.S. Steel's old Chicago plant.
This must have been what Mayor Richard M. Daley had in mind during his first mayoral campaign in 1989, when he urged the city to turn its back on industry and embrace services. "This city is changing. You're not going to bring factories back," he said in an interview with Crain's Chicago Business, the local business weekly. "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 be an international city." Though old-time Chicago stalwarts might have blanched, Daley's vision is not without appeal. In many ways, it's hard to see the decline of Chicago's industry and the rise of a service-dominated city economy as anything but a salutary process. After all, dozens of new shops, restaurants, theaters, and nice apartments seem like manifest goods for the city. If middle-class people want to live in Chicago, shouldn't the city government do everything it can to persuade them to buy homes here? City chic won't hurt industry in the metropolitan area anyway: manufacturers are drawn to the large, cheap land tracts of suburbia, which are ideal locations for sprawling manufacturing plants.
But while no one would deny it's a good thing for middle-class people to return to the city--who'd really want to live in Algren's Chicago?--it's important to recognize that in the absence of adequate planning policies, some residential development may come at the expense of Chicago's industrial base. Residential development could be limited to parts of the city with few industrial jobs; industry could be encouraged to move to parts of the city inappropriate for housing. But though there's no inherent reason residential development can't take place in a way that permits the maintenance of Chicago's remaining industry, in recent years middle-class residential development appears to have been a key factor in the continued decline of industrial jobs: in the 1990s, neighborhoods with dramatic new housing construction have seen a sustained decline in manufacturing employment. Chicago's city government faces a crucial set of decisions: Does it matter if some portion of a city's employment base is industrial? Given that substantial industry remains within the metropolitan area, why should we care whether it's within the city limits? And given that basic industry no longer plays the central role in the urban economy it once did, should the city pursue economic development for the sake of economic development, even if this means encouraging services and residential development at the expense of the industry that remains?
Chicago's story will be of greatest interest to other cities and metropolitan areas--like Portland, Los Angeles, Hartford, Milwaukee, and Cleveland--that still have 15 percent or more of their total private-sector jobs in manufacturing. Before consigning extant industrial economies to the dustheap of history, it's worth looking at the precise scope of Chicago's deindustrialization, revisiting some arguments about why manufacturing matters in an urban economy, and examining how Chicago's metro-area real estate market exacerbates pressures for deindustrialization.
THE CHANGING URBAN LANDSCAPE
Driving through one of the odd, empty stretches on Chicago's South Side--where empty factory buildings vie with sumac trees for space, and ramshackle houses look wistfully out toward Gary's industrial skyline--demonstrates better than any sociology lecture that deindustrialization has caused vast changes in Chicago's economic landscape. …