Four Decades of Futility: Economic Development Policy and Industrial Decline in Chicago

Abstract

The long-term decline in manufacturing employment in the Chicago metropolitan area and in the city of Chicago is examined. Manufacturing employment at the metropolitan level is estimated to decline by 0.90% per year if manufacturing employment is constant in the nation, and to change by about 1% when the change at the national level is 1%. Manufacturing employment in the city of Chicago declines (on balance moves to the suburbs) by 1.9% per year if manufacturing employment is constant at the metropolitan level, and changes by 1% when the metropolitan area changes by 1%. In other words, an annual 1% decline of manufacturing employment in the nation translates into a 1.9% decline in the Chicago metropolitan area and a decline of 2.9% in the city of Chicago. The decline in manufacturing in the city and the metropolitan area was not caused by an unfavorable mix of industries. Since the 1960s several public programs have tried to retain and/or increase manufacturing jobs in the city, but have achieved only marginal success, if any.