Tuesday, February 8, 2011

Chicago in Context

David Brooks has a column in the NYT this morning with some random musings on Rahm Emmanuel, Chicago, and city level vs national politics.  Amongst other things, he says:
The cities that have thrived over the past few decades tend to have high median temperatures in January (people like warm winters and other amenities). But even cold cities like Chicago can thrive if they attract college grads. As the number of college graduates in a metropolitan area increases by 10 percent, individuals’ earnings increase by 7.7. This applies even to the high school grads in the city because their productivity rises, too.

When you clump together different sorts of skilled people and force them to rub against one another, they create friction and instability, which leads to tension and creativity, which leads to small business growth. As Glaeser notes, cities that rely on big businesses wither. Those that incubate small ones grow.

Recently, Emanuel visited Valois: See Your Food, a South Side institution that gives new meaning to the phrase “greasy spoon.” As he made his way from table to table — from cops to middle-class families, graduate students, the unemployed and single moms — he fell into a dozen intense and divergent conversations.

Chicago has its problems: it suffers under one of the biggest debt loads in the country. But it has thrived because it has had good leadership, a constantly updated housing stock, a good business environment and an ethos that attracts talent and celebrates blunt conversation.
My own take is that what a metropolitan area needs more than anything is a core competence in a growth export industry.  In the SF Bay area, the core competence is designing high technology products.  In LA, it is the entertainment industry.  In New York and environs, it's the financial industry.  When a city has that kind of core competence, firms in that industry can grow more easily because they can attract experienced and talented employees.  Meanwhile, people with skills in that field are drawn to that city because there is a diversity of employers.  The firms in the core industry export their products or services globally, and the resulting income then can support all manner of other commerce with a more local orientation (eg health care providers, grocery stores, construction businesses).

When a city's core competence is in decline, then the city is likely to be in trouble - think Detroit and similar manufacturing cities in the rust belt, suffering as US manufacturing has struggled to compete with Asia.

My assumption is that Chicago's core raison d'etre has always been managing the financing, trade, and export of the output of the world's greatest industrial agricultural belt - the US upper midwest.  In an era of high food prices, that's probably a decent position to be in.  On top of that, it has managed to build an unusually diverse set of industries that take advantage of the large and skilled population.

In any case, Brook's column inspired me to drag out the scripts I wrote last summer for making Google Earth pictures from census data.  If we take median household income as a decent rough indicator of how well a city is doing, here's a map of the county level data for 2008:

Here, white is a median household income of $20k/year, while red is $80k/yr.  You can see that the big areas of high income in the US are the coastal belts from Virginia up to Boston, and from Los Angeles to  the SF Bay Area.  There are also western mountain enclaves of high income, but that's on a very small population base.  You can see that in the generally moderate income region of the midwest, the Chicago area (on the west shore of Lake Michigan) is an island of prosperity.

We can get a clearer sense of the amount of population living at high income by making a picture in which the height of each county is proportional to the population density in that county.

Here you can see that Chicago is not nearly as large an island of prosperous population as the Washington-Boston corridor, or the California coast.  But it is the largest such population in the middle of the country, and well placed to continue to do well, I think, as the world continues to try and support more and more people from the limited available cropland:

I suspect those big blobs of dark red around Chicago will have more to do with its future success than with the inhabitant's habit of blunt speaking.


Emil said...

I have increasingly felt that Mr.Brooks columns are more and more about pseudotheories with little data to back them up.

Yes, cities have always been engines for growth. There's even solid scientific evidence that cities(and by cities I mean cities with million(s) in population) have larger median IQs as the gifted and the educated cluster there for opportunities and jobs.

And the more gifted are also, naturally, more productive. None of this is new. But as your post shows, even if Chicago is doing well, it has little to do with the woodoo theories that Mr.Brooks is advancing, where I'd prefer your statistical approach.

This is a shame, I've long liked Mr.Brooks. He always did strike me as a moderate conservative(cannot have enough of those these times) but I'm increasingly seeing the Krugman light instead. But even he is prone to speculation(even if far more informed). The recent dead-certain comments of climate chainge is 'here' (based on the food prices and the weather of late) did also strike me as a bit too hasty even if plausible.

Alas, though, I think I may simply be kvetching too much. It is in the nature of the pundit, no matter how grand this pundit pretend to be, to be speculative and hazardous in his or hers comments to lure attraction from the visitors and the comments and to make themselves heard in the increasingly noisier atmosphere of debate we're currently stuck in.

chris said...

Want to know more about Chicago and its politics from someone who lives there and can turn a phrase? Read Driftglass.
Don't care for David Brooks? You are not alone, read Driftglass.

Adam Schuetzler said...

I think the bottom map has much more to do with farming methods than the richness of the farmland itself. One indication of this is North Korea vs. South Korea and Manchuria, or for that matter Europe vs. Africa and India - I think it's a stretch to say those have less fertile land than Europe!

To be honest I find that bottom map more interesting than anything else. It suggests that agriculturally either something is unsustainable in the red areas or that much more could be done in at least some of the blue areas. Heck, even moderate gains could make much more food available around the world...