New Geography

Author: Aaron M. Renn

  • Commuting in New York City, 2000-2010

    New York City is infamous for congestion and long commutes. At 34.6 minutes, it has the longest average commute time in the United State. The region is also America’s top user of public transportation, with 30.7% of all metro area commutes made by transit. Nearly 40% of all transit commuters in the United States are in the metro New York. As transit commutes generally take longer than driving, one might be tempted to link these facts. But commute times also seem to correlate with city size, and bedevil big cities with limited public transit too.

    New York’s commutes improved a bit over the 2000s, however. The average commute time declined in every borough, in the city as a whole, and in the region. Overall US commute times fell as well, but less than New York’s:


    Source: Census 2000, American Community Survey 2010 1-yr

    In addition to showing the decline, this chart also highlights disparity in commute times between the subareas of New York. Manhattanites have far shorter commutes than those who live in the outer boroughs. In fact, the outer boroughs actually have longer commutes than far-flung outer suburban areas. The areas just outside the urban core of New York are some of the most disadvantaged for regional commuting

    The commute time decline is particularly noticeable when looking at ultra-long commutes, those that are 90 minutes are longer:


    Source: Census 2000, American Community Survey 2010 1-yr

    Here again we see both a decline in long commutes and a higher concentration in the outer boroughs.

    New York also managed to finish out the decade with no increase in traffic congestion. According to the Texas Transportation Institute, the region ended the decade with the same Travel Time Index it had when it started, 1.28:


    Source: Texas Transportation Institute, Urban Mobility Report 2011

    What has caused this?  Firstly, given that the data is collected in surveys with a margin of error, one shouldn’t read too much into any given year’s value. However, the decline was fairly consistently reflected in the later decade surveys and doesn’t appear to be an anomaly of just 2010.

    Assuming some legitimate improvement, one obvious potential explanation is the economy. Metro New York did lose 99,000 jobs in the 2000s. This was only a decline of 1.2% however, which actually bettered the US as a whole. But given the extreme congestion in the region, it clearly could have played a role. Also not to be dismissed are toll increases in the regions, and even potentially changes resulting from 9/11.

    Given the focus of the Bloomberg administration on non-auto forms of transportation, it is also worth looking at changes there.  Public transit usage grew strongly in New York over the decade, with regional trips increasing by 23%.


    Source: Texas Transportation Institute Urban Mobility Report 2011

    This increase is also reflected  an increase in public transportation commuting mode share over the past decade.


    Source: Census 2000, American Community Survey 2010 1-yr

    So should increased public transit ridership get the credit for commute time reductions? To some extent perhaps. But remember that New York has both the nation’s longest commutes and highest public transit ridership. Also keep in mind that public transit commutes are longer than driving commutes. The average commute time in metro New York for those driving alone is 30 minutes. For those riding public transportation it is 51.2 minutes. But transit riders affect drivers too. Public transit saves drivers in the New York area nearly $8 billion per year in congestion costs.  So while public transit can’t be necessarily given the credit for commute time improvements, it’s certainly possible it contributed to them .

    The same is not true, however, for other alternative transport modes. Here is the change in bicycle commuting over the decade:


    Source: Census 2000, American Community Survey 2010 1-yr

    Bicycling gets a lot of press in New York, and while the increases look impressive on a chart like the one above, the reality is that this is a trend that enjoys only a bit more than half a percentage point gain in mode share. Bicycling may be on an upswing, and may be of great help recreationally and for non-commute trips, but it is not yet a major force in commuting.

    Walking is actually far more prevalent than bicycling for commuting in New York. But the mode share for walking actually declined over the decade:


    Source: Census 2000, American Community Survey 2010 1-yr

    While walking is generally seen as a good thing in urbanist circles, some people can end up walking to work simply because they have no other alternatives. People who obtain access to a car, or who are able to use transit to get a job outside of their neighborhood, may in fact be improving their economic prospects. Some people who previously walked may be riding transit or biking to work today. Also, some walkers may have switched to driving. Interestingly, the number of households without a vehicle declined in metro New York, though some boroughs saw increases. The changes are very small, however.


    Source: Census 2000, American Community Survey 2010 1-yr

    Lastly, as you might expect with transit going up, the percentage of commuters driving alone declined nearly across the board in New York, though it increased nationally:


    Source: Census 2000, American Community Survey 2010 1-yr

    In short, New York retains America’s longest commutes and highest public transport usage. But in the last decade there have been increases in public transport commuting and declines in people driving alone, while overall commute times have improved, fewer people with ultra-long commutes, and road congestion has stayed flat. The 2000s were perhaps an unusual decade in America and New York. And the changes are fairly small so far.  The future will tell whether this is the start of a long term trend or merely a short term reversal.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile. Telestrian was used to analyze data and to create maps for this piece.

  • Indianapolis: From Naptown to Super City

    I have long touted the sports strategy that Indianapolis used to revitalize its downtown as a model for cities to follow in terms of strategy led economic and community development. I really think it sets the benchmark in terms of how to do it, and it has been very successful.

    Indy is hosting the Super Bowl on Sunday, something that is locally seen as a sort of crowning achievement of the 40 year sports journey. As part of that, the Indianapolis Star and public TV station WFYI produced an hour long documentary on the journey called “Naptown to Super City.” I think it’s a must watch for anyone who is trying to figure out to revitalize their own downtown. An hour isn’t short, but given the billions of dollars cities pour into this, I think it’s worth doing some homework. It tells the story of how Indy went from a deserted downtown where local Jaycees were licensed to take their shotguns and kill pigeons to one where the Super Bowl is being hosted today.

    I’ll talk more about the Indy strategy in a bit, but first the show. If you are in Google Reader this won’t display for you, so click here to watch.



    One thing this brought home for me is the true magnitude of the change. Perhaps I’m being a bit uncharitable, but Indianapolis almost literally started with nothing. It was never a major, important American city. It had no brand in the market. And it had a downtown that was all but dead. Everything they have today was built almost from scratch.

    Why do I think the Indy sports strategy was such a good one? Two reason: it was a good strategic area to go after, and it was backed up with very intelligent execution.

    First, five reasons this was a good strategic goal to pursue:

    1. It just fits the character of the city. Hoosiers love sports. The Indianapolis 500 and high school basketball were long established. It’s something they could behind in a way that they would never have gotten behind being the “vegetarian capital of the world” or something like there. It was authentic to the city. If you watch the video, you’ll note how locals embraced the events that were held that. That goes a long way towards explaining the success of the strategy. You have to be authentic to a place in your development efforts.
    2. It was a whitespace opportunity where Indy could get first mover advantage. Today every city thinks they can make money off sports, but Indy really pioneered the notion that you could use sports as an economic development tool. There were a lot of firsts along the path, and that’s one reason Indy was able to take out a leadership position. Just as one example, Indy was first to do the “build it and they will come” model of building a stadium before having a team. As a result, they were able to grab the Colts, and do it in an era when you didn’t have to mortgage your whole city to make a team relocation happen.
    3. Being America’s top city for sports events was a realistically achievable goal. I know this because the city achieved it. This is in great contrast to the umpteen cities who all claim they’ll be the “best cycling city in America” or some such.
    4. There were huge collateral benefits to sports beyond the direct economic impact of the events and the jobs they support. They bring people to the city to show it off to people who might not otherwise come. They enliven downtown and create events that locals might actually want to attend. They also have been an amazing brand opportunity. Just think of the Colts. How many times a week during football season does the word “Indianapolis” get said on TV? Probably hundreds if not thousands. Imagine if the city had to pay advertising dollars for that exposure? Yes, sports is expensive, but I think it could be justified just as cost-efficient marketing alone. Think about how much companies pay just to put their name on the stadium. How much more is it worth to put your city’s name on the team or the event? Think about how much advertisers will be paying for a 30 second commercial in the Super Bowl? What’s it worth for all those mentions of your city during the Super Bowl again?
    5. It was an initiative that had the possibility of being truly transformative for the city. Again, I know this is true because it was.

    I’m not going to claim these were actually the thoughts going through people’s minds as the sports strategy developed or that it was this calculated. But all of these things were implicitly true all along, and I think clearly the people pushing sports must have gotten it on that at some level. So sports meets the first test of a great strategy in that it set out after a good strategic goal.

    It was also something where there was a level of execution detail that far exceeded what most cities do. In business, it’s one thing to have an idea. It’s another thing to execute on it and achieve market leadership. It’s still another to generate sustainable competitive advantage that keeps you there over the long haul. Indianapolis has managed to do all of these with sports. I’ll highlight eight examples of how it did this:

    1. It invested in world class facilities. A lot of these have remained top rated even long after they opened, like Conseco Fieldhouse, which is still ranked every year as the best arena in the United States.
    2. Two, it laid out an entire district downtown around events hosting, with everything you need in close proximity – venues, the convention center, hotels, shopping, and entertainment. This is something that’s already been widely commented on by Super Bowl visitors who are amazed you don’t have to get shuttled around all over the place and that you can actually walk directly from the media hotel to the hotels where the teams are staying.
    3. Three, because of this Indy is able to effectively “saturation rebrand” downtown for an event and otherwise cater to events in a way that few other cities can or will. In effect, the city has converted its downtown into a giant sound stage. Take a look at the pictures of the city. The whole downtown as been rebranded after the Super Bowl, including, for example, plastering a huge Lombardi Trophy images on the side of the city’s premier hotel. You can debate the value of this to the city, but there’s no denying its value to the NFL. How many cities are willing to do this to the extent Indianapolis is?
    4. Indy created the Indiana Sports Corp. as the first ever non-profit management company for events. Today, everybody has adopted that model.
    5. The city cultivated a large, experienced volunteer base for putting on events that is much more powerful than what others cities have.
    6. Indy has been willing to take calculated risks in support of the strategy. Building the Hoosier Dome with no team to play in it – big risk.
    7. It not only went after the events, it went after the sanctioning bodies that determined where the events would be held. The most important is of course the NCAA, but there are others too. This has resulted in Indy having a “cluster” of these organizations and direct access to the people making decisions that pays incalculable dividends. This is one area where the “face to face” discussions that occur in Indy gives the city a big leg up. It’s not just better for selling, it gives Indy critical advanced intelligence about how these organizations are conceiving of their future events needs.
    8. Last but certainly not least, this has been a sustained, 35 year commitment. It wasn’t a party politics thing. It was a single project thing. It wasn’t a flash in the pan idea. It was something that has been relentlessly pursued over the long haul.

    Add all this up and it is easy to see why still today, three or four decades after it first started and after pretty much every city decided to go after these types of events, Indianapolis is still the best place in America to host a sports event.

    I hope this gives you a flavor why the Indy sports strategy was so good and so successful. It’s certainly something that’s not without its failures and downsides. The fact that sports has consumed disproportionate civic resources is one of them, and one highlighted by the documentary. But on the whole, most people seem very happy with the results.

    Something the video highlights at the end is one essential attribute for success that you can’t plan for or make happen – luck. They ask questions like, what if the “Save the Pacers” telethon had failed back in the 70’s? What if the seats in the Hoosier Dome had been the originally planned variegated colors instead of the Colts blue and white colors when Bob Irsay walked in to check it out? There were many critical turning points where without a lucky break, who knows if the future of downtown Indy might have been radically different in some way. It should give us some humility about the limits of our ability to simply will things into being. On the other hand, it reminds us that if you aren’t in the game, if you aren’t swinging the bat, you don’t have any chance at all of hitting that home run. You have to play if you want to win.

    This piece originally appeared at The Urbanophile.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile, and operates Telestrian, an online tool for economic and demographic data.

    Photo of Lucas Oil Stadium courtesy of BigStockPhoto.com.

  • The Shifting Landscape of Diversity in Metro America

    Census 2010 gave the detail behind what we’ve known for some time: America is becoming an increasingly diverse place.  Not only has the number of minorities simply grown nationally, but the distribution of them among America’s cities has changed. Not all of the growth was evenly spread or did it occur only in traditional ethnic hubs or large, historically diverse cities.

    To illustrate this, I created maps of U.S. metro areas showing their change in location quotient. Location quotient (LQ) measures the concentration of something in a local area relative to its concentration nationally. This is commonly used for identifying economic clusters, such as by comparing the percentage of employment in a particular industry locally vs. its overall national percentage. In a location quotient, a value of 1.0 indicates a concentration exactly equal to the US average, a value greater than 1.0 indicates a concentration greater than the US average, and a value less than 1.0 indicates a concentration less than the US average.

    While commonly used for economic analysis, the math works for many other things. It can be useful to measure how the concentration of particular values changes over time relative to the national average.  In this case, we will examine the change in LQ for various ethnic groups between the 2000 and 2010 censuses for metro areas. Those metro areas with a positive change in LQ grew more concentrated in that ethnic group compared to the US average over the last decade. Those with a negative change in LQ grew less concentrated compared to the nation as a whole, even if they grew total population in that ethnic group.

    To increase concentration level requires growing at a faster percentage than the US as a whole. This is obviously easier for places that start from a low base than those with a high base. In this light, places that have traditionally been ethnic hubs – such as west coast metros for Asians – can grow less concentrated relative to the nation as a whole even if they continue to add a particular ethnic group. Asian population, for example, can grow strongly in California, but at a slower rate than the rest of the country. This is indeed the case as groups like Hispanics and Asians have been de-concentrating from the west coast, and now are showing up in material numbers even in the Heartland.

    Black Population


    Black Only Population, Change in Location Quotient 2000-2010

    The change in Black concentration is particularly revealing. Much has been written about the so-called reversing of the Great Migration. But contrary to media reports, there is no clear monolithic move from North to South. Instead, we see that the outflow has been disproportionately from America’s large tier one metros like New York, Chicago, and Los Angeles. In contrast, Northern cities like Indianapolis, Columbus, and even Minneapolis-St. Paul (home to a large African immigrant community) grew Black population strongly, and actually increased their Black concentrations. Similarly, there were clearly preferred metro destinations in South for Blacks, like Atlanta and Charlotte. Many other Southern metros , particularly those along the Atlantic coast of Georgia and the Carolinas continued to lose their appeal to Blacks, relatively speaking.

    Hispanic Population


    Hispanic Population (of any race), Change in Location Quotient 2000-2010

    Here we see de-concentration clearly in action. The Mexican border regions retained high Hispanic population counts, but they are no longer as dominant as in the past. Places like Nashville, Oklahoma City, and Charlotte particularly stand out for increasing Hispanic population percentage. Again, large traditionally diverse tier one cities like New York and Chicago show declines on this measure as smaller cities are now more in on the diversity game.

    Asian Population


    Asian Only Population, Change in Location Quotient 2000-2010

    Again, we see here that America’s Asian population spread well beyond traditional west coast bastions. There were big increases in Asian population counts, with resulting LQ changes, in places like Atlanta, Indianapolis, Philadelphia, and Boston. Even New York (which now has over one million Asian residents within the city limits alone) and Chicago showed gains among Asians.

    Children (Population Under Age 18)

    As a bonus, here is a look at LQ change for metro areas for people under the age of 18.


    Children (Population Under Age 18), Change in Location Quotient 2000-2010

    Here we see that metros along America’s northern tier now have relatively fewer children than a decade ago, while metros like Denver, Dallas, and Nashville had more. Clearly, some places are increasingly seen as better – and perhaps also more affordable – locations for child rearing than others.  Perhaps unsurprisingly many of the out of favor locales are either expensive, have poor economic prospects, and/or are excessively cold. Not surprisingly, for example, Atlanta, Houston and Florida’s west coast have gained in this demographic while much of the Northeast, particularly upstate New York, have lost out.

    The overall key is while there are certain broad themes that emerge from the recent Census, such as America’s increasing diversity or signs of a reversing of the Great Migration, we need to take a more fine grained view to see which places are in fact benefitting and being hurt by these trends.  What we see here is that traditional large urban bastions of black population and ethnic diversity are no longer the only game in town. Smaller places in the interior and the South are now emerging as diversity magnets in their own right, as well as magnets for families with children. This is the collection of places to watch to look for the next set of great American cities to emerge.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile. Telestrian was used to analyze data and to create maps for this piece.

    Note: The original version of this piece included incorrect charts for the Asian, Hispanic, and child measures.

  • Back to the City?

    The 2010 Census results were mostly bleak for cities, especially for those who believed the inflated hype about the resurgence of the city at the expense of the suburbs.  Despite claims of an urban renaissance, the 2000s actually turned out to be worse than the 1990s for central cities.  The one bright spot was downtowns, which showed strong gains, albeit from a low base.  The resurgence of the city story seemed largely fueled by intra-census estimates by the government that proved to be wildly inflated when the actual 2010 count was performed.

    But beyond the headline numbers, there is intriguing evidence of a shift in intra-regional population dynamics in the migration numbers. The Internal Revenue Service uses tax return data to track movements of people around the country on a county-to-county and state-to-state basis. These can be used to look at movements of people within a metro area.

    Because this data is at the county level, it does not map directly to what we might think of as the “urban core” as most counties that are home to central cities contain large suburban areas as well. There are also areas inside many central cities themselves that are suburban in their built form.

    However, there are a limited number of cities that have combined city-county definitions that approximate the urban core. Looking at a few of these – New York, Philadelphia, San Francisco, and Washington, DC – we see that over the 2000s out-migration from the core to the suburban counties was relatively flat or even declined late in the decade as general mobility declined in the Great Recession. In contrast, migration from the suburban counties to the core stayed flat or actually increased, even late in the decade when again overall migration declined nationally.

    It should be stressed that the overall trend is still that of net out-migration from the core to the suburbs. But in searching for any potential inflection point, changes in the dynamics are clearly of interest.

    New York City

    First let us look at New York City. The city proper consists of five boroughs, each of which is a separate county. Treating the city as a whole as the core reveals these migration trends during the 2000s:


    Note: Core defined as the five boroughs of New York City

    This chart renders migration as an index, to show changes in in- and out-migration on the same scale. This should not be confused with the total number of people moving, which still shows overall net out-migration, though the trend lines show the same dynamic as above:


    Note: Core defined as the five boroughs of New York City

    Philadelphia

    Perhaps the most dramatic shift in these four cities was in Philadelphia, where the central city actually gained population for the first time since 1950.

    Here are the raw migration numbers, which again show net out-migration, but a distinct shift over the decade.

    San Francisco

    The Bay Area has been divided into two metro areas by the government, San Francisco and San Jose. Therefore, an intra-regional migration analysis looking at San Francisco alone will miss certain migration within the broader Bay Area. With that caveat in mind, we see again the same trend, albeit somewhat less pronounced:

    And here are the total migrants:

    Washington, DC

    Due to its very nature as a government town, Washington’s migration patterns differ from the many other cities. However, it has still experienced the same suburbanization phenomenon as the rest of America, and the same changes in intra-regional migration dynamics as the other cities highlighted here, though we see the shift beginning only in mid-decade:

    And the raw values:

    Conclusion

    Given the overblown triumphalist rhetoric about the urban core that ultimately hasn’t been backed up by the data, we should be cautious about reading too much into this. Again, net migration remains outward towards the suburbs and away from denser cities to smaller, generally less dense ones (from Chicago to Indianapolis or New York to Raleigh). Overall city population figures were disappointing. And the housing crash and the Great Recession have clearly wreaked havoc with migration patterns on a national level.

    Still, these are clearly figures that should inspire some at least small-scale optimism in urban advocates.  There has clearly been a shift affecting the net migration in these cities. And the same pattern is visible, though less easily attributable to just the urban core, in a large number of other metros around the country.  In particular, the fact the in-migration from the suburbs to the core held steady or even increased is a sign of some urban health.

    Back to the city as a mass movement?  Not yet.  But it’s certainly an improvement. These intra-regional migration statistics are key figures to keep an eye on as we look for any sign of a true inflection point in the overall population trends for America’s urban centers. The whole pattern could also shift again — in one direction or the other — as the economy, albeit slowly, comes back to life and people once again get back into the housing market.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile, where this piece originally appeared. Telestrian was used to analyze data and to create charts for this piece.

    Chicago photo by Storm Crypt / Flickr

  • A Decade in College Degree Attainment

    This week the Census Bureau released its 2010 data from the American Community Survey. The ACS is what contains many of the core demographic characteristics that are frequently opined upon, such as college degree attainment, commute times, etc.

    It used to be that the Census Bureau collected this information during the decennial census using the so-called “long form” that went to one out of every ten households. But that was discontinued as of this census and has been replaced with with the ACS. The ACS reports data more frequently (annually for geographies larger than a certain size), but has a smaller sample size and so there’s lot of statistical noise that I don’t think we are used to dealing with yet. For example, in 2008 the Indianapolis metro area ranked #3 in the US for growth in college degree attainment over the course of the decade to date among metros greater than one million people. But in the 2010 data Indy ranked #28 on the same measure. There are fluctuations year to year and the margin of error needs to be accounted for in serious statistical analysis. Nevertheless, this is what we have to work with.


    Metro area college degree attainment, 2010

    I’m going to roll out a series of posts covering the highlights of some of this data. I’ll start with educational attainment, since that is something that is so key to upward social mobility and urban economic success.

    But first I’ll put in a brief plug for my Telestrian tool. The Census Bureau site for distributing this data is a disaster. As one Brookings senior fellow put it, “Lots of Census data yesterday, today. Lots of angles, stories, conclusions. One shared sentiment: new American Factfinder is AWFUL” and “New Factfinder making mainframe punchcards look appealing.” Telestrian is designed for very rapid basic analysis and comparative benchmarking moreso than simple fact lookups (though it can do that do). In fact, I generated every table, graph and map in this post in ten total minutes with it. Even if you aren’t in the market for a commercial product, there’s a no credit card required free trial period, so if you are interested in perusing the ACS data and don’t want to beat your head against the wall with the Census Factfinder, I encourage you to check it out. Telestrian doesn’t have every data element, but it has a lot of interesting stuff.

    College Degree Attainment

    College degree attainment (the percentage of adults with a bachelors degree or higher), is one of the most critical factors in urban success. If you’d like to know more, just check out all the great research on it under the heading of “talent dividend” over at CEOs for Cities.

    The map at the top of the post is 2010 college degree attainment for metro areas. Here are the top ten, among those with a population greater than one million, showing total number of people with degrees and the attainment percentage:


    Row Metro Area 2010
    1 Washington-Arlington-Alexandria, DC-VA-MD-WV 1,758,297 (46.8%)
    2 San Jose-Sunnyvale-Santa Clara, CA 558,519 (45.3%)
    3 San Francisco-Oakland-Fremont, CA 1,317,354 (43.4%)
    4 Boston-Cambridge-Quincy, MA-NH 1,335,276 (43.0%)
    5 Raleigh-Cary, NC 301,012 (41.0%)
    6 Austin-Round Rock-San Marcos, TX 429,163 (39.4%)
    7 Denver-Aurora-Broomfield, CO 651,661 (38.2%)
    8 Minneapolis-St. Paul-Bloomington, MN-WI 822,321 (37.9%)
    9 Seattle-Tacoma-Bellevue, WA 867,193 (37.0%)
    10 New York-Northern New Jersey-Long Island, NY-NJ-PA 4,613,445 (36.0%)

    And here’s the bottom ten:


    Row Metro Area 2010
    1 Riverside-San Bernardino-Ontario, CA 499,663 (19.5%)
    2 Las Vegas-Paradise, NV 278,387 (21.6%)
    3 Memphis, TN-MS-AR 209,987 (25.1%)
    4 San Antonio-New Braunfels, TX 344,247 (25.4%)
    5 Louisville/Jefferson County, KY-IN 224,392 (25.8%)
    6 Tampa-St. Petersburg-Clearwater, FL 513,182 (26.2%)
    7 Birmingham-Hoover, AL 198,856 (26.3%)
    8 New Orleans-Metairie-Kenner, LA 209,916 (26.8%)
    9 Jacksonville, FL 241,801 (26.9%)
    10 Phoenix-Mesa-Glendale, AZ 731,643 (27.2%)

    While we are on the topic, here is a map of college degree attainment by state:



    State college degree attainment, 2010

    And here is county level college degree attainment for those counties covered by the 1-year ACS:



    County college degree attainment, 2010

    Changes in College Degree Attainment

    Beyond just the raw 2010 numbers, it’s interesting to look at which places are growing their college degree attainment the most. That is, which places are growing their talent base. So here’s a look at metros by their change in college degree attainment over the last decade:



    Change in percentage of adults with college degrees, 2000-2010.

    Some places already have very high college degree attainment, which can make it tougher to grow even higher. Speaking of which, the US as a whole raised its college degree attainment as well. To some extent, this is purely a function of demographics. Older generations have lower educational levels than younger ones. (None of my grandparents had a college degree, and my father’s parents never even finished high school. I don’t think that was atypical for their day).

    What might be more interesting to look at is whether places are increasing their college degree attainment faster or slower than the US overall. There’s a measure that does capture that. It’s called location quotient, and is used in economic analysis to measure the concentration of industries in certain locations.

    An economist told me once that he likes to look at this for all sorts of things, not just industry clusters. The formula works for other stuff. I really haven’t seen this used before, so caveat emptor, but here’s a look at shifts in location quotient for metro areas over the course of the decade:



    Metro area change in location quotient for college degree attainment, 2000-2010. Increase in LQ in blue, decrease in red.

    The blue metro areas had a higher concentration of college degrees relative to the nation as a whole in 2010 than they did in 2000. The red ones a lower concentration. This is certainly an interesting area for further exploration.

    While I’m on the topic, here’s the same chart, only limited to graduate and professional degrees. There’s some interesting variability here.



    Metro area change in location quotient for graduate and professional degree attainment, 2000-2010. Increase in LQ in blue, decrease in red.

    A Closer Look at Indianapolis

    Just as one more granular example, I wanted to take a look at the Indianapolis vertical. Here’s 2010 college degree attainment for the city, metro, state, and America as a whole:



    College degree attainment, 2010

    As we know, urban regions tend to be more highly educated. Here we see that while Indiana is one of the lowest states in terms of college degree attainment, the Indy metro area actually beats the US average. However, the city of Indianapolis falls short of the US average. Because Indy is a consolidated city-county government that includes a lot of inner ring suburban areas, it’s hard to draw conclusions about the true urban core, but it does seem clear that the center is less educated than the periphery of the metro.

    Now lets look at the change in attainment for the decade:



    Change in the percentage of adults with a college degree, 2000-2010.

    Here we see that the rich get richer, as Indy metro not only started out on a higher base, but had the best showing in attainment growth as well. OTOH, going back to our LQ measure, Indiana actually boosted its LQ while the Indy region was stagnant. That’s because this is a percentage point change, not a percentage change, and growing from a low base makes it easier to boost LQ. It’s one of the quirks of that formula.

    The poor showing of the city of Indianapolis is something that should definitely be worrying. It would be interesting to do a similar analysis for other metros, but alas that’s all for today.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile, where this piece originally appeared. Telestrian was used to analyze data and to create charts for this piece.

  • The Texas Story Is Real

    Texas Governor Rick Perry entered the Republican presidential nomination race bragging about the job creation record of Texas during his term as his primary pitch to a nation starved for jobs. This triggered a flurry of debate on whether or not Texas is really all Perry claims for it. But while there is certainly nuance in numbers, and Texas doesn’t win on every single measure, on the whole it seems indisputable that Texas did very, very well during the 2000s.

    This may or may not be the doing of Perry. Nor are the national struggles clearly the fault of Obama. The  man at the top always reaps the credit for the blame for what happens on his watch, but the realities of the modern economy are quite complex and there’s only so much influence a governor or president has – and that usually comes with a lag. Nevertheless, the Texas story can’t simply be discounted.

    Let’s take a look at the top level data. While reviewing, keep in mind that the data for the US as a whole actually includes Texas. If you stripped the Texas data out of the US total, the comparisons would generally get even better for the Lone Star State.

    Population

    The root of the Texas story is in its massive population growth during the last decade. While historic growth champions like California stumbled, Texas powered ahead, adding 4.3 million new residents for a growth rate of 20.6% – double that of the 9.7% US average.




    Unemployment

    Despite challenging times at both the beginning and end of the decade, Texas actually managed to keep those people busy at work too.  While it started out the decade with an unemployment rate above the US average, by decade’s end, with population growth and all, it was well below it:


    Jobs

    One reason Texas was able to keep its unemployment rate under control is that it added jobs – nearly a million between 2000 and 2010 in a nation that lost jobs during that period.  The chart below, rendering the US and Texas on the same base, shows that the two moved closely in tandem during the first half of the decade, followed by an ever-widening gap in Texas’ favor.



    Gross Domestic Product

    It’s not enough, perhaps, to merely ask if there are more jobs. Are these jobs that are producing significant economic output, as measured by statistics like GDP?  Looking at the data, we see that Texas again outperformed.




    This one, however, can mislead if looked at alone. With all that population and job growth, of course Texas’ GDP would go up. When considering the average output, GDP per job or GDP per capita is a better measure. The latter is reported by the US government, and shows that Texas actually fell short on boosting this figure. Texas GDP per capita is slightly higher than the US average, but it fell during the decade from 104.7% of the US to 103.7%.




    Personal Income

    Another way to look at this is by examining personal income. As with GDP, the total values are highly correlated with population and job growth. The per capitas tell the story. In this case we see a mirror image of GDP, with Texas somewhat trailing the average, but growing faster than the nation as a whole, improving from 94.0% of the US average to 97.3%.




    Interestingly, the portion of personal income attributable to earnings is higher in Texas than in the US, on both a percentage and per capita basis. Texas trails the US average because it lags in investment income and transfer payments, which have nothing to do with the quality of jobs.

    Household Income

    Household income gives an almost identical tale.  Texas is below average but caught up during the 90s, going from 95.1% of the US average to 96.1%




    Wages

    More directly, we can look at the wages being paid in Texas, which flipped from lower to higher than the US average during the 2000s, though tracking extremely closely the entire way:



    Poverty

    Lastly, the poverty rate is higher in Texas than in the US as a whole – 17.2% vs. 14.3%, not a small difference. However, the gap actually narrowed between the two during the 2000s, as the chart below in the percentage point change in the poverty rate illustrates.



    Conclusion

    While every statistic isn’t a winner for Texas, most of them are, notably on the jobs front. And if nothing else, it does not appear that Texas purchased job growth at the expense of job quality, at least not at the aggregate level.  There are certainly deeper places one might drill into and find areas of concern or underperformance, but that’s true of everywhere.  And these top line statistics are commonly used to compare cities and states. Unless Texas critics are ready to retire these measures from their own arsenal, it seems clear that Texas is a winner.  The Texas story is real.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile, where this piece originally appeared. Telestrian was used to analyze data and to create charts for this piece.

    Photo from Governor Rick Perry’s flickr photo stream.

  • Megabus – King of the Road

    In recent years there’s been a resurgence in intercity bus travel, driven by the rise of low cost, non-stop service linking tier one cities like New York, Chicago, and Washington, DC with other regional hubs in their surrounding areas. This is a lively and diverse market, particularly on the east coast, with providers like Megabus, Bolt Bus, Greyhound, and a host of so-called “Chinatown” buses.

    These offer service for very low fare, ostensibly as low as a dollar, but more typically $20. Still, that’s far cheaper than even driving in most places, and certainly than flying. These services typically involve curb side loading (no stations) adjacent to a city’s main train station, making them almost a quasi-rail service or rail adjunct, while giving many of the same rail benefits as direct CBD-CBD service without requiring extensive, and expensive, ground transport on either end. With amenities like AC power outlets and free wi-fi – which many Amtrak and commuter trains don’t yet offer – it’s easy to see why they are popular. And this isn’t just with the stereotypical bus ride customer, but increasingly with everything from hip Millennials to the mothers of yuppies coming into the big city for a visit. Megabus and others are drawing an entirely new market who previously would have discounted intercity bus service – including Yours Truly.

    With a low cost service that gets people out of cars and planes and into what is basically a shared transit vehicle, you would think that Megabus would be extremely popular in the urbanist/sustainability community. But you’d be wrong. A large segment of them have indeed seen the virtues of this new school intercity bus service, but a surprisingly large number of them actually revile Megabus.

    Among the common complaints are that Megabus is “subsidized” because it uses valuable curb side real estate in cities for free, that they are implicitly subsidized by highway funding, that passengers waiting for the bus at the stop are a nuisance, that the buses clog the streets and pump fumes into the air in a way that harms the “neighborhood,” and that the service really isn’t that good because of congestion. Even the government of Washington, DC is getting in on the act, as reported they want to charge Megabus a fee for access to their loading zones.

    Every last one of these is bogus. The quickest way to illustrate this is to simply ask how urbanists would react if anti-transit forces made similar arguments against ordinary municipal bus service.

    First, municipal bus service is massively subsidized, both from a capital and operating perspective. Megabus pays for its own buses, drivers, and fuel and actually pays taxes to the government. As for subsidies from free use of curbside real estate and highway funding, large amounts of our city streets – including on pretty much every block on major streets in major cities – have permanently dedicated space to bus stops. The bus agency does not pay for these. City buses also runs on streets paid for with highway and general fund dollars. And in any case, this concrete investment in streets and highways is a sunk cost, with buses contributing little to general freeway congestion.

    As for passengers congregating at stops, that’s frequently the case with city buses as well, as this picture from Chicago shows:

    And to argue about crowds hurting city life seems a bit odd given that we’re told one of rail’s benefits is bringing all those people in to patronize businesses. I know I’ve made purchases at businesses near the Megabus stop that I wouldn’t have otherwise made. And in places like Midtown Manhattan, there are already vehicles of all types more or less continuously stopped or even double parked along the avenues. Megabus is barely a blip here. Plus don’t forget all the loading zones that already serve many private businesses all over our cities.

    Also, these bus stops are typically located in the CBD near a train station, which is already crowded and which itself can be a huge (and tax free) mega-structure in the city that poses disruption in its own right (e.g., Grand Central Terminal). What this also means that any fumes and such disproportionately are in the CBD, not really a neighborhood. Again, many train stations also feature diesel fume generating trains (Metra’s trains in Chicago were recently noted as having unsafe diesel fume concentrations). And also, city buses generally do pump out fumes as well, and truly in the neighborhoods. Anyone who’s spent time in a city knows the delight of having a poorly tuned bus pull away from the stop belching a huge black cloud. I frequently get to experience this while out jogging in my neighborhood.

    Again, if an anti-transit writer tried to disparage investment in city buses with the arguments raised against Megabus, they’d be laughed out of the house by the urbanist/sustainability crowd.

    So why the complaints? They can speak for themselves, but I suspect a couple of items. Firstly, some people just don’t like private sector solutions. That’s a view I can respect, but not agree with. But more importantly, I think that there’s fear that successful private sector intercity bus service undermines the case for high speed rail that is near and dear to the urbanist heart.

    Indeed, it is true that in many cases Megabus frankly does undermine the case, particularly for the “Amtrak on steroids” style HSR proposals on the table in places like the Midwest. Megabus already delivers basically the end to end journey times of the proposed Midwest “high speed rail” system with similar amenities but without the need for billions in government expenditures. Even on the east coast, NYC to Providence has a journey time not that much worse than the Acela – and at 20% of the ticket price. Congestion might be a real concern, but if so, customers would notice. But give Megabus some credit – they build this into their schedules. Generally the journey times are as advertised.

    I prefer to look at it differently though. What Megabus & Co. are proving is that there is a viable market for intercity transit-style travel at the right price. Thus they are helping to get people used to the idea of traveling that way and in a sense priming the pump for high speed rail at a later date as demand increases. The bus operators are doing the hard work of creating and proving out the market for this. Also, Megabus will hopefully force the backers of many of these HSR proposals to rethink their concept around 110MPH peak speeds in favor of true high speed rail. And even in the worst case, Megabus doesn’t say anything against such slam dunk investments as further upgrades to the NEC. Conceivably if and when HSR investments are made, these bus operators will service a different, lower end market and/or evolve into more of a rail complement. (For another perspective on this, see “Will Megabus Kill High Speed Rail?.”)

    In any event, I’m totally puzzled by the lack of enthusiasm or outright hostility against a service which is providing cost effective, green transport and getting people out of their cars today without tax expenditures. That’s not to say these services can’t be improved. Perhaps they should make some payment for curbside space. The wi-fi service is frequently inoperable. And their buses, particularly later in the day, can see schedule slippage as problems cascade. Perhaps some stops should be relocated to be less disruptive. But all of these are easily solvable problems. None of them vitiates the fact that these intercity bus services are one of the best transport innovations of our time.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile, where this piece originally appeared.

    Photo by Sidddd

  • The Shifting Geography of Black America

    Black population changes in various cities have been one of the few pieces of the latest Census to receive significant media coverage.  The New York Times, for example, noted that many blacks have returned to the South nationally and particularly from New York City.  The overall narrative has been one of a “reverse Great Migration.”  But while many northern cities did see anemic growth or even losses in black population, and many southern cities saw their black population surge, the real story actually extends well beyond the notion of a monolithic return to the South.

    The map below, showing total growth in Black Only population from 2000 to 2010, indeed shows that northern and west coast cities had low or even negative growth while various southern cities boomed.


    Here is a list of the top ten metro areas (among those with more than a million total people) for black population growth:


    And here are the bottom ten (among those with more than one million people):


    Of course, looking at total population numbers can mislead. Some cities grew slowly or lost people as a whole while others boomed. With Houston, Dallas, and Atlanta all adding over a million people each, it’s no surprise these regions added lots of blacks. Working and middle class African-Americans likely shared many of the same motivations to move to these cities – such as lower housing prices – as Americans of other ethnicities. In that light, a look at change in black population share (the percentage of the population that is black) provides additional perspective:


    Here we see not a single-minded return to the South, but a complex mixture of shrinking and growing regions in various parts of the country.  This includes some surprising places, like Minneapolis-St. Paul, which was one of the top ten metros in the country for total black population growth, and also saw its black population share grow strongly.  Now the Twin Cities, along with Columbus, Ohio, another strong performer, are two of the top destination for African immigrants from Somalia and elsewhere, which doubtless accounts for part of that strong growth. But anecdotal reports indicate that they are also benefitting from Chicago’s expanding black diaspora, along with places like Indianapolis and various Downstate metros.

    Atlanta, well known as America’s premier metro area for blacks, continued to dominate the charts. Not only far and away the leader in adding raw numbers of blacks, the African-American share also grew share strongly too. Charlotte is also clearly emerging as another key black population hub, ranking #6 in America for total black population growth, which is impressive for a smaller city, and adding nearly two percentage points in black population share.  It grew its black population much faster than other fast growing small cities like Raleigh or Nashville, and added share at more than three times as fast.

    By contrast, Houston, which grew total black population significantly, had a much lower share gain. Austin, one of America’s fastest growing metros, added only 28,000 blacks and actually lost black population share. And Washington, DC, despite being a traditional black population and cultural hub, also lost black population share regionally as gentrification in the District resulted in its loss of its black majority for the first time in decades, according to the Brookings Institution. 

    So even among rapidly growing metro areas in the South, the appeal to black population is selective, favoring places like Atlanta, Charlotte, Florida cities, and even slower growing cities along the length of the Mississippi River like Memphis.  Even some cities in the North are retaining their allure to blacks as well. Less favored or even out of favor are metros like DC, Dallas, and Houston as well as cities such as Charleston and Savannah along the southeast coast.

    Slow or negative black population growth is particularly concentrated in traditional tier one “global cities”, as well as those facing economic or other hardship like Detroit, Cleveland, and immediate post-Katrina New Orleans.

    The latter may be understandable – whites have been leaving these regions as well – but the former is quite troubling.  The global city model, focused on high end and creative services, is supposedly the bright and shining savior of American urbanism. Indeed, it’s hard to find a city that doesn’t have some aspect of that as a core plank in its civic strategy. Yet the cities that have been most focused at promoting this notion – such as New York, San Francisco, and Chicago – are generally those  disproportionately driving blacks away. The reasons for this aren’t clear, but the high and increasing cost of living in those places seems like one logical explanation.

    Here’s a more detailed look at the percentage growth in Black Only population in some tier one global type metros:


    New York barely broke even on black population, while Chicago, LA, and the Bay Area all actually lost black residents, a stunning reversal from their past as black magnets. However, Boston, not a traditional black population hub, grew its black population strongly on a percentage basis, as did Miami and DC, though as noted before, the share change in DC was negative.  Here is that metric for the same metros:


    With the notable exceptions of Boston and Miami – and Philadelphia, seldom ranked highly as a global city but still a traditional large northern metropolis – most global city regions appear to be increasingly inhospitable to Blacks.  Thus their model of success, whatever its appeal to some, at a basic level simply lacks inclusiveness. This shows its clear limits as an overall model for America’s urban centers as a whole.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile. Data analysis, maps, and charts in this piece were prepared with Telestrian.

  • Let’s Face It, High Speed Rail Is Dead

    Advocates were ecstatic when President Obama had $8 billion for high speed rail put into the stimulus bill. His administration planned to make HSR one of the cornerstones of its infrastructure investment program. Secretary of Transportation Ray LaHood visited Europe to check out HSR there in person and came back proclaiming, “High speed rail is coming to America.” The $8 billion, we were told, was a down payment, and that in little more than two decades, America’s largest cities would be linked by a web of high speed trains.

    But as it turns out, a series of snafus and reversals has left Obama’s HSR agenda on life support.

    First is the public perception of the failure of the stimulus bill. Unemployment never came down to projected levels. Spending largely went to keep state and local government workers already employed, not towards infrastructure or new jobs. Obama has since admitted he was mistaken to believe there were such things as “shovel ready” projects for even roads, much less a complex undertaking like high speed rail. But more importantly, rather than put that $8 billion towards focused projects that would really advance the ball of high speed rail in America, it was peanut butter spread across a large number of projects around the country, ultimately not driving significant improvements. This feeds the perception of $8 billion that just went “poof.”

    At the same time, the federal deficit ballooned to $1.5 trillion and the national debt to an astounding $14 trillion. Virtually all parties agree on the need to address our massive structural deficit. The Tea Party focused on a hodge podge of issues, but primarily on reducing government spending. The movement grew to prominence and fueled a Republican comeback in the 2010 elections. In this environment, getting anything done will be difficult, and especially funding items like HSR that are easy to characterize as frivolous and favoring just a few urban regions.

    The biggest impact may have been at the state level, however, as a wave of new Republican governors ripped up HSR plans and sent stimulus funds back to Washington.  This includes Scott Walker of Wisconsin, John Kasich in Ohio, and Rick Scott in Florida, all of whom said “thanks, but no thanks” to federal rail funds.

    But beyond those philosophically opposed to HSR, some  high speed rail advocates have done themselves no favors either. They’ve resolutely backed pretty much any and every rail project regardless of whether it is potentially useful or an outright boondoggle. They’ve engaged in false advertising by labeling 110 MPH peak speeds as “high speed rail” instead of what it really is:Amtrak on steroids. (One of the more serious HSR advocates is Richard Longworth, who labeled the Midwest 110 MPH rail plan the “Toonerville trolley”). Nevertheless, Illinois is pocketing well over $1 billion of the HSR stimulus funds for this “high speed” system that will offer end to end journey times that are at best only slightly better than what’s already being provided today by Megabus – and that for only a handful of trains a day on a line still subject to freight interference.

    Advocates have excoriated opponents to high speed rail, but have shown themselves largely utterly unserious about the enterprise as they have put no focus on overcoming major institutional barriers such as the steam road era thinking of the Federal Railroad Administration which is stuck in the 90s – the 1890s – or the mismanagement at Amtrak.  Getting to an HSR system that works is going to involve major reform (or replacement) of those agencies since all proven, international HSR systems are illegal in the US under current rules.  Witness here also the histrionics about a Republican proposal to privatize the Northeast Corridor rail operations rather than engage with it as a starting point.  Even in Europe and Japan, many HSR operations are private, so there’s no reason they can’t be in the US too.

    To be clear, though I myself have been ambivalent about the high speed rail enterprise, I do not consider myself anti-rail in the slightest. I agree that HSR could bring potentially significant benefits, particularly in the Northeast, although it’s a somewhat more speculative enterprise in most parts of the country.  This is one on which reasonable people can disagree.  But however one feels, getting to the benefits will require a properly designed and operated true high speed system, something few of the current proposals would provide.

    It’s time to take a major gut check on high speed rail in America and rethink the direction. Clearly, with the budgetary and political situation, significant future HSR investments are unlikely. Even if some billions materialize, the experience of the stimulus suggests that they will be frittered away as salami slices sent hither and fro.

    A better approach might be to take some time to think more clearly about what we want high speed rail to look like in America.  It starts with learning from best – and worst – practices abroad, while noting the important differences versus the US. We need to put a proper regulatory regime in place and reform the FRA; to set up a framework for a successful privatization of any system, probably with operations contracted to an international operator with high speed experience; and to jettison any thought of Amtrak as the ultimate HSR system operator.

    We can then prove these concepts out in the one corridor where high speed rail is clearly a slam dunk in America: the Northeast Corridor from DC to Boston.  Despite what the Acela brand might imply, this is far from high speed service today, and there’s clearly room for vast improvements. Studies can proceed in parallel in other regions, and one we’ve proven in the NEC that HSR can be for real in America, other regions might opt in.

    In short, it’s time to stop pretending we are going to get a massive nationwide HSR rail network any time soon.  Advocates should instead focus on building a serious system in a demonstration corridor that can built credibility for American high speed rail, then built incrementally from there.  That’s about the best hope for HSR left in America. Without a rethink of the current approach, high speed rail is well and truly dead.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

  • Chicago: Out of the Loop

    The “global city” is one of the dominant themes related to  urban success today.  In this model, cities serve both as huge agglomerations of top specialized talent and also as “control nodes” of the global economy serving as key sites for the production of financial and producer services demanded by the new globalized economy. In her seminal book on the subject, Saskia Sassen noted New York, London, and Tokyo as the paradigmatic examples of the global city.

    The status of global cities, however, is protean, and not all “global cities” are created equal or occupy a similar status. Tokyo, for example, is clearly fading in the face of the shift of economic power from Japan to the Chinese sphere of influence – Shanghai, Beijing, Hong Kong and Singapore.

    Chicago has long prided itself as one of those cities, and consistently rated in the top ten global cities in various surveys. It’s a huge business services hub, financial hub, transport hub, cultural center, and massive draw for talent. The greater Loop area is clearly a classic global city area, densely packed with knowledge workers, with gleaming towers all around – over a hundred of which went up in the last decade. The transformation of the Loop and the surrounding neighborhoods in the last 20 years has been nothing short of stunning and remains a testament to the record of both Mayor Daleys.

    Even at its best, the global city model has its weaknesses, such as extreme income inequality, but at least it seems to provide a model that works in an era when so many urban formulas have failed.  Chicago, for example, has used its global city status to avoid the rot that has hit so many Midwestern cities.

    But for Chicago, though its global city side is running strong, there’s a serious problem. Although impressive both economically and awe-inspiring in its physical form, the greater Loop economy is just too small – especially relative to the size of the region. This suggests that the Chicago region cannot rely primarily on the global city to carry its economy.

    This might seem difficult to believe given that the greater Loop is the second largest business district in the United States and home to over half the region’s office space. But it can be easily illustrated by comparing Chicago employment to that in Manhattan.  Here’s a comparison of total jobs in Manhattan vs. all of Cook County, Illinois.


    Source: Quarterly Census of Employment and Wages

    As you can see, Manhattan has almost as many jobs as all of Cook County, and the two are converging. Given trends in both cities, it doesn’t seem unreasonable to think that in the near future Manhattan may actually have more jobs than Cook County.  Not only are there more jobs in Manhattan, but they pay significantly higher wages.  Here is a comparison of the average weekly wage between the two:


    Source: Quarterly Census of Employment and Wages

    Manhattan wages dropped as a result of the financial crash, but still remain 70% higher than Cook County – and until the crash had been pulling away.  They may be surging again as Wall Street has been a notable beneficiary of the bailouts. But the difference in scale is significant under any circumstances. Manhattan, with a mere tenth of the regional population, has about as many jobs as Cook County, which has over half the regional population. The wealth and income engine of Manhattan is simply of a different order and power than any other US city. As a result, the global city side of New York for which Manhattan is a proxy really can pay the freight for not just the outer boroughs, but also the greater region and the budgets of not only New York but to some extent New Jersey and Connecticut as well.

    By contrast, Chicago’s global city side, strong as it is, simply cannot perform the same role in powering its region and state. Though estimates are that it encompasses something like 600,000 people participate in it, and though the Loop along with select suburban business districts are legitimately thriving, this economy is just too small to support the entire region. In fact it can’t pay the bills even for the rest of Chicago itself, much less the region or state, especially considering that the non-global city parts are basically Rust Belt in character.  That’s one reason local government finance is in such rough shape.  The city is facing a deficit of about $650 million and the state’s unfunded future liabilities are upwards of $160 billion.

    Clearly, Chicago needs to continue focusing on expanding the size of its Loop economy and ensuring that it remains a top global city destination in the future. But unlike some other places that can hang their hat on that if they want, Chicago has to go beyond just being a global city and also be something more. After all, Chicago does not enjoy a “lock” on any industry, like New York with finance and media, or even Houston in energy, the Bay Area in technology or Los Angeles in entertainment. In almost every major business category it is not the lead player, which allows for greater economies of agglomeration and, perhaps even more importantly, a powerful and enduring global signature.

    But bluntly, the world city economy is too diffused and small to offer much to the 90% of its people who aren’t a part of that.  In short, Chicago needs more “outside the Loop” thinking.

    A critical aspect of the challenge here lies with improving  the state and local business climate, recently rated as one of the worst in the country by Chief Executive magazine. If you’re a hedge fund partner, architect, or celebrity chef, things are great. But for bread and butter type businesses and workers, which constitute the vast majority of the economy, things are quite different. That’s why everyone from the CEO of Caterpillar,based three hours from the city, on down is publicly complaining and threatening to move.

    Fixing this means finally rooting out the corruption that undermines confidence in local government, restructuring state and local finances to provide more certainty to investors, continuing to focus on education, addressing the infrastructure investment deficit, and radically reducing the red tape that plagues small and medium sized businesses.

    None of these are sexy or easy. In fact, the CEO of the Chicagoland Chamber of Commerce recently said he’s not putting any faith in claims by Rahm Emanuel, the new mayor  that red tape relief is on the way, reflecting the level of skepticism in the local business community right now. Today businesses in the city literally need a city ordinance passed in order to do seemingly simple things like add an awning or get a sidewalk café permit – something that is totally at the discretion of the alderman.  The Chicago Reader recently reported that this sort of “ward housekeeping” accounts for over 95% of city council legislation. Clearly this approach is toxic to business.  That’s why these items are absolutely mission critical items to creating a regional economy that can actually generate employment and pay the bills going forward. Glamor jobs and prestige employers downtown just aren’t going to cut it by themselves anymore.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

    Photo by Doug Siefken