Tuesday, June 22, 2010

Chicago Talent

There is a great discussion going on about Chicago over at The Urbanophile. The sense is that Chicago is slipping from the ranks of America's great global cities. I thought to add my own comment about how Chicago is still a powerful talent magnet. I thought better of it once I looked at some data.

For 2007 to 2008, Hartford (Connecticut) gained more college educated workers than Chicago. That's at the CSA level. Minneapolis also did better than Chicago on that score. On the balance, Pittsburgh benefited more than 2.5 times from net talent migration. Those numbers don't take into account differences in population. Chicago is hitting way below its weight class.

Concerning Chicago's heavy investment in its core, the returns are lousy. Its central city lags behind both downtown Pittsburgh and Minneapolis in terms of educational attainment rates. Chicago even trails Minneapolis in terms of per capita income.

There's more to talent than college degrees. Chicago is still a primary immigrant gateway. But that has little to do with urban policy. What Chicago does control has largely failed to generate dividends.

The distance between Midwest top-dog Chicago and Pittsburgh/Minneapolis remains great. However, those two cities are seeing excellent returns on their investments. Pittsburgh in particular is a fast riser in both per capital income and educational attainment. The region also has a lot of ground to make up. Not only is Chicago falling back to the pack, Pittsburgh is surging forward. Enough to upset the global urban hierarchy? No.

The fear is that Chicago is slowly imploding, the global city status a house of cards. In terms of talent, I think the concern is warranted. Relative to its Rust Belt cohort, Chicago is a weak performer. Nationally or globally, the tale of the tape must look even worse.


TheLetterAHyphenTheNumberOne said...

Chicago is two cities. There's a global business center that is about 1/3 of the city and a second post-industrial city that demographically looks a failing rust-belt city. The Business City can succeed while the Rust Center declines--we know this because we've watched it happen. The two Chicagos are closely linked, but not in every way. Most "metro Chicago" statistics even include Gary and Hammond. If Gary's numbers get worse, and that affects Chicago's Metro averages, does anyone really believe that seriously impacts the functioning Chicago's core?

Jim Russell said...

Richard Longworth did a good job of discussing the geographic disparity, which is common in "successful" global cities:


Sure, Chicago's core can continue to thrive while the rest of the CSA tanks. But Chicago's core, in terms of talent, isn't thriving. I'm surprised at the city's poor performance. It's shocking.

TheLetterAHyphenTheNumberOne said...

Also, regarding talent, the percentage figures alone don't pass the smell test. I REALLY like Pittsburgh (and Denver), but anyone who spends time in the Lakeview and Lincoln park neighborhoods can understand that Chicago vacuums in recent grads just by seeing a thousand drunk 22 year olds wearing Ohio State and Wisconsin hats on Clark and Lincoln streets. After a few years, maybe they have kids and move back to Michigan. I certainly believe that some years more college grads leave Chicago than enter, but that doesn't change the fact that it's a magnet for fresh blood.

Jim Russell said...

Chicago continues to pull in a lot of fresh blood. But it is also pushing out a lot of talent. Thus, the balance of talent available is poor relative to other big cities. It's also poor relative to Pittsburgh and Minneapolis. Talent is pooling in those two cities much faster than in Chicago.

As for Denver, I'd bet it is a much better magnet than Chicago. In fact, I know that to be the case.

TheLetterAHyphenTheNumberOne said...

I'm a regular reader of your blog, and like what you have to say, but I just don't think this analysis is nuanced enough to say anything meaningful. If you look at Brookings' new State of Metropolitan America data, and look at the percentage of city residents with BS degrees, it's 32.1 % in NYC, and 32.2% in Chicago and 39% in San Jose. All lower than Albany, Minneapolis and Utah. http://bit.ly/a3FoRD Since 2000, NYC has lost 1.7 Million more domestic residents than it has gained. http://bit.ly/bKJruI

I don't think any serious person would say that New York is in trouble since almost two million more U.S. citizens have left than have entered in the last decade. And I don't think that Albany or Minneapolis has a better talent base than Silicon Valley.

I'm a Chicago partisan and booster, but I'm not suggesting it doesn't have challenges. I'm just saying that if one number suggests that Chicago has a talent issue compared to Pittsburgh, then the numbers alone are not accurately telling the story. In a lot of things, the proof of the pudding is in the tasting. Chicago has added two hundred occupied high-rise buildings in the city center in the last decade--roughly equivalent to all of Seattle. In approximately the same period, about 50 square miles of Chicago has gentrified. The facts on the ground tell a fairly clear story.

Jim Russell said...

I recognize that Chicago has attracted a ton of talent while rising in global stature. That's why the data surprise me.

I'm looking at three numbers: Net Talent Migration, Educational Attainment and Per Capita Income. That last metric is your bottom line, the talent dividend.

NYC might not impress you with its educational attainment, but that isn't the entire story. It's number two for PCI behind only SF/San Jose/Oakland. Aaron linked to Bill Testa's analysis of Chicago and expresses a similar worry:


Turning our attention to net talent migration, NYC does well. Much better than Chicago, with approximately 29,000 more college graduates as compared to about 2,000 for Chicago.

Of the top-10 most prosperous metros, Chicago is at the bottom. There's a lot to be said for bottom of the best. But the arrow is pointing the wrong way. For all the money spent on building a cool urban core, Chicago is failing.

TheLetterAHyphenTheNumberOne said...

Shrug, I guess.

In 1990 Chicago had fewer college graduates than the U.S. as a whole by percentage. Today it has more than average. The poverty rate in Chicago has decreased, while it has increased in the U.S as a whole. Those metrics--and most others--are trending positively despite Chicago still being about 25% below it's maximum population numbers. Compared to other Alpha metros, Chicago has been dealing with an economy that's proportionally more dependent upon manufacturing. The city has been bleeding manufacturing jobs in the last 15 years and has been treading water by replacing them with management services, FIRE and service jobs. Demographically, Chicago is actually at a positive inflection point: there's not much more negative impact from manufacturing jobs left to be felt.

I think the debate at the Urbanophile is about whether Chicago will maintain its status as a global Alpha city, not whether it fall back into a pack of Tampas, Denvers, Charlottes and Phoenixes. So it's a little intellectually dishonest to write that Chicago is "slowly imploding" or "Chicago is failing" by not adding talent as fast in absolute terms as larger metros, or as quickly in percentage terms as smaller metros.

I also don't quite understand the criticism of investment in the core using a basis like "returns". The reason I like to spend time in cities is because of the things that are in them. Investment in parks, streetscapes, bike lanes, safe neighborhoods and infrastructure isn't a means to an end--it's the end. Though central district in Chicago has increased it's population by 40% in recent decades, so the idea that investment has failed seems absurd on it's face.

It often isn't helpful to compare cities in different stages of their development. Chicago was a boom town 100 years ago; Charlotte is a boom town now. Using the same metrics for success in each one isn't always interesting.

City Observer said...

To say Chicago is "failing" goes way too far, and almost begins to betray wishful thinking.

From the link posted by Mr. Russell (the Crain's article), let me post this quote, which in many ways says it all:

"That rise also was documented by the Brookings Institution, which found that from 2000 to 2008, Chicago moved to 29th from 41st among the 100 largest U.S. cities in percentage of college graduates — ahead of even New York."

Mr. Russell posted net migration data from only one year: 2007-2008, and drew the conclusion that Chicago has failed to draw talent. Nevermind the data above that I quoted. Nevermind the percentage of college grads in the city, and the rate at which they grew from 2000-2008. Nevermind the remarkable rise in the city of Chicago's proportion of well-paid citizens compared to its suburbs.

I agree with TheLetteraHyphen that a much more nuanced analysis than this is warranted before drawing such presumptious conclusions. Chicago has its problems, there's no doubt, but I see little in that article about Michigan you linked us to on which to base such a claim as you have.

Jim Russell said...

Anyone want to take a stab at the per capita income story?

Both the PCI and educational attainment numbers have nothing to do with the referenced time period. That's just a snap shot of the talent migration.

I've referenced more than just the Michigan Futures data in the blog post. As for the Brookings report, it doesn't paint a more flattering picture of Chicago. I'll do a more detailed look at the Educational Attainment chapter some time this week.

To TheLetterAHyphenTheNumberOne and City Observer, what do you make of Bill Testa's analysis? Most recently:

As seen above, for much of the 1990s, the Chicago region’s per capita income made little if any gains on the Great Lakes region. Rather, by way of explanation, the surrounding Midwest region was also experiencing a comeback of the same degree.

TheLetterAHyphenTheNumberOne said...

Is per capita income over some geographic boundary really the only thing that matters? That would seem to measure the average impact a resident has on the economy, but ignoring clusters of strong influence that might be held by a relative few. It also doesn't account for scale very well. A small, rich city certainly isn't global. Is Clearwater, FL significant here?

If New York became five separate cities tomorrow, does Manhattan become more successful and the Bronx less so simply because the boundaries have changed? What if we left New York whole and added Newark? Is New York now less successful? The premise is a bit absurd. I don't think its constructive to debate on those terms.

The discussion isn't about whether being a global city is equally beneficial for all of its citizens. The discussion is: how prominent is Chicago in the global economy and what opportunities are available there for its residents. PCI is a grossly inadequate for this discussion. Here's why: if Chicago added 5000 executive managers and 100,000 minimum wage workers, PCI would decrease but it's global importance would have increased dramatically.

The fact is, 500,000 people engaged in global business make a city global whether or not you have another 500,000 or 5,000,000 residents sitting on the sidelines, making PCI non-germane.

If we each get to pick one metric to say is the only one that matters, here's mine: Each metro region gets to choose 1,000,000 residents, living contiguously, and the aggregate stats from those residents determine the relative importance of the region.

Alternatively, I might suggest looking at Bank Deposits per metro, as this takes into account commercial activity:

New York $893.368 Billion
Los Angeles $317.496 Billion
Chicago $284.008 Billion
Philadelphia $283.125 Billion
Salt Lake City $250.564 Billion
San Francisco $214.604 Billion
Charlotte $183.958 Billion
Washington $165.358 Billion
Dallas $157.401 Billion
Boston $154.608 Billion

This has some problems, but it seems somewhat accurately scaled, though Salt Lake and Charlotte are clearly outliers due to their heavy banking focus. If you look at this metric on a per capita basis, it boosts San Fransisco, D.C. and Boston up a bit, which feels right.

Jim Russell said...

Is per capita income over some geographic boundary really the only thing that matters?

No. We could use GMP (Brookings). Bank deposits is an interesting proxy. It reminds me of Peter Taylor's Globalization and World Cities initiative. A talent migration profile might offer a unique perspective. From where does your city draw talent?

Alon Levy said...

The PCI numbers are usually given on a metro-area scale, in which case New York's numbers include not just the city but also Newark and Westchester, and Chicago's include not just the city but also Gary and DuPage County. This helps gauge the health of the entire region, and somewhat controls for the way some global cities massage their numbers by forcing the poor out into the suburbs.