The Decline of Chicago: The City that Doesn't Work


Recently, Crain’s Chicago Business reported on Chicago winning an award from Fast Company magazine. “Chicago stood out in our reporting for its creativity and vitality,” Editor and Managing Director Bob Safian said at a press conference here. “Chicago offers something distinctive.”

Fast Company Magazine is representative of much of the media: not much on hard facts about Chicago. The Windy City has distinctions but not positive ones. Chicago’s retail sales tax is the highest in the nation at 10.25 percent. Unions, high taxes, and political corruption have made Chicago one of the leaders in big city decline.

One of the great modern myths of big city America is that Chicago is some sort of successful town and a role model for others. By any traditional performance standards Chicago has failed. Like many old, big industrial cities, Chicago peaked in the 1950 Census with a population of 3,620,962. In the 1950s over two percent of the entire U.S. population lived within Chicago city limits. Over a half century later, while America’s population doubled, Chicago’s population declined. The 1960, 1970, 1980, and 1990 Census numbers showed Chicago losing population.

Mayor Daley and Chicago residents were quite excited about the 2000 Census showing Chicago gaining over 112,000 people (a growth rate at half the national average for the 1990s). It appears the 1990s were an anomaly for Chicago. Since the year 2000, according to Census estimates, Chicago again continued its population decline with a loss of 63,000 from 2000 to 2006 leaving a total of 2,833,321.

Recently, the Web site Real Clear Politics listed two Chicago area Congressional districts among the country’s ten fastest-shrinking districts, in terms of percentage of population lost between 2000 and 2005. Jan Schakowsky’s district lost 7.9 percent of its population. Congressman Rahm Emanuel’s district lost 5.1 percent.

Though 2000 was a somewhat positive year, that year’s Census numbers mask some rather disturbing trends. The white flight out of Chicago continued with 150,000 non- Hispanic white people leaving Chicago from 1990 to 2,000. African-Americans, for the first time, began leaving Chicago with a net loss of 5,000. The population gain in Chicago during the 1990s was due to Hispanics.

One of the great fables urban lovers of Chicago like to talk about is some comeback of the city. The comeback, according to this urban legend, involves white families staying in Chicago to raise their children. With Chicago’s 150,000 white population decline from 1990 to 2000: Chicago was only 31.3 percent non-Hispanic white.

What is even more pronounced is the lack of white children in the public school system. The entire Chicago Public School System is only 9 percent white. Not a single public high school has a population that is majority white. Not one.

Recently, the stubborn facts of Chicago’s population decline made news. As CBS TV Chicago reported in January of 2008:

Half-empty schools are ‘unacceptable’ because they don't serve their students or the communities they're supposed to anchor, Mayor Richard M. Daley said Thursday, setting the stage for the biggest wave of school closings in decades.

Officials contend 147 of 417 neighborhood elementary schools are from half to more than two-thirds empty because enrollment has declined by 41,000 students in the last seven years. A tentative CPS plan calls for up to 50 under-used schools to close, consolidate with other schools or phase out over the next five years.

Most of the underused schools are on the South and West Sides, often where the student population is largely African-American, and in lakefront neighborhoods that include Lincoln Park, Lake View, Uptown and North Center.”

The situation isn’t any better in Chicago’s Catholic School System. The Chicago Tribune reported on February 27, 2007:

Nicholas Wolsonovich, superintendent of schools for the archdiocese, called the exodus from Chicago's Catholic schools ‘mind-boggling.’ In 1964, he said, some 500 schools were spread across the diocese, with about 366,000 students. Now, the system has 257 schools and fewer than 100,000 students. Over the last decade statewide, the number of Catholic schools has dropped from 592 in 1997 to 510 this year, according to figures released at the conference.

Chicago’s political elite love to give speeches about the importance of public education, but not for their children. Mayor Daley sent his children to private schools. Deborah Lynch, the former head of the Chicago Teacher’s Union, sent her kids to private schools. America’s newest political superstar, Barack Obama, sends his kids to private schools. With the exodus of the rich from Chicago’s public schools, 69 percent of the children in the Chicago Public School system are poor.

The horrible public schools, high taxes, and crime have driven families out of Chicago. The city’s job base cannot compete with anti-union places like Houston and Phoenix.

Chicago used to be the number one convention town in America but Las Vegas and Orlando now lead the pack. Chicago has lost its top spot as busiest airport to Atlanta. Chicago's high priced unions and restrictive work rules have driven business elsewhere. For decades, Chicago was a major banking center with two major banking headquarters located on LaSalle Street. Continental Bank and First National Bank of Chicago were always among the top ten largest banks for much of the twentieth century.

No longer. Continental was purchased by Bank of America while First National Bank of Chicago was purchased by JP Morgan. Not a single bank in the top 25 largest banks in America is headquartered in Chicago. While Chicago’s financial district declines Charlotte, North Carolina has emerged as a bigger banking town. Charlotte has the headquarters of two of the four largest banks in America: Wachovia and Bank of America.

Other elements of Chicago’s financial district also show major weaknesses. Chicago doesn’t have one major mutual fund company headquarters. Chicago’s mutual fund job base is smaller than Denver, Indianapolis, or Baltimore. Chicago has a few major hedge funds but nothing like New York City or London. Chicago is the futures capital of America with the merger of the Chicago Mercantile Exchange and the Chicago Board of Trade but even here the news isn’t all positive. Computers have shed tens of thousands of jobs in the futures industry. Futures trading floors are headed for extinction within the next three to seven years, eliminating even more jobs.

Chicago’s high tax life style has driven businesses and jobs to the suburbs. Chicago is one ofthe only towns in America with an employee head tax on employment. Companies with over 50 employees must pay $4 a month per employee to the city. Most of the major corporate headquarters in the Chicago area are located in Chicago’s suburbs. Motorola, Walgreens, All State, Kraft, Anixter, Illinois Tool Works, McDonald’s, Alberta-Culver, and Abbott Labs all have their corporate headquarters outside city limits.

Recently, Chicago got its first Wal-Mart. In most places in America, politicians allow consumers to decide whether a business should fail or succeed. In Chicago, with the power of the unions, Chicago’s city council has made it difficult for Wal-Mart to open up any more stores. Chicago’s poor are relegated to paying higher retail prices and have less access to entry-level jobs. The adjacent suburb of Niles has the unusual distinction of being the only town in America (with less than 45,000 people) with two Wal-Marts. One of the Niles Wal-Marts is located right across the street from Chicago.

The largest employer in the city of Chicago is the Federal government. Followed by the City of Chicago Public School system. Other major employers are the city of Chicago, the Chicago Transit Authority, the Cook County government, and the Chicago Park District. These thousands of government workers provide the backbone of the coalition for higher taxes, generous pensions and “political stability”.

Chicago’s political system is inefficient and costly. There are no term limits in Chicago. The Democratic Party has controlled the Mayor’s office since 1931(a big city record). There’s no opposition: Democrat’s control 49 out of 50 seats on the city council. Corruption is everywhere. Barely a month can go by without a major scandal. The FBI has the largest public corruption squad in the United States located in Chicago . Chicago voters don’t seem to care. Those who care about high taxes, good public schools, and low crime are a small minority in Chicago.

In conclusion, Chicago’s long decline continues. In the coming years, public pension commitments will test even the high tax tolerant Chicago residents. Look for low regulation, low tax Houston to overtake Chicago in population in the next eight to 15 years.

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Flawed Assessment of a Great American City

The author's characterization of Chicago as a city in decline is flawed. Chicago and metropolitan Chicago are not in decline, in fact the 10 million population urban area is in the ascendency. Chicago and its surrounding urban and suburban areas are and integrated whole, interconnected by nearly 1,000 miles of commuter railways. To separate the City of Chicago from the other 75% of the metro population and the other 75% of the geographic area is not a valid parameter on which to say Chicago is in decline. Chicago is one of the three truly world class metropolitan areas in the United States and that will be the case for decades to come. Chicago is a world class city! For those who want to know more about Chicago's place on the world stage, read the book "Global Chicago".

I quoted you

I quoted you, along with two other posters, on this website:

I hope you don't mind!

Chicago Commuter Rails

Greater Chicago has about 700 miles of commuter railway routes including those operated by Metra, CTA and South Shore Line. Virtually all the 700 miles of commuter routes are "double track" which of course facilitates to/from commuting.

Chicago bashing

It's the same in every architecture, public spaces, or urban design forum, Chicago-bashing. The last 10 years, or so, it's getting louder and more consistent. Look, it doesn't take Freud to figure out what this is all about. ENVY! I've grown tired of giving sound, reasoned rebuttals to people who have their own agenda. Enough! In the vernacular of the kids today "don't hate, congratulate!"

I quoted you

Chicago is a net loser of

Chicago is a net loser of envy.

Chicago Envy

I agree with the premise: "Chicago bashing" is absolutely a case of envy! What else could it be? I suppose now that the new US President is from Chicago there will be more bashing for political reasons. However, in the past, other than disgruntled indivduals, envy has to be the supreme motive for"Chicago bashing".

This looks like more

This looks like more knee-jerk propaganda from the anti-tax cult. Yes, Chicago declined slightly in population. That's much better than most major cities that are declining rapidly. Go to a town like Kansas City and Detroit where downtown buildings sit empty. Then go to Chicago where new sky scrapers are being built. Chicago is doing great.

Submited by : Libros Gratis

Chicago's Decline

When New Geography asked me to write a column on Chicago they wanted something with facts.So,I'll respond to some of the criticism that's appeared in Chicagoist and Illinoize.Some infer there's a racial angle.Well,the fact the Chicago's City Council wants to limit the number of Wal-Marts,one has to wonder who are the racists.Wal-Mart is the largest private employer of African-Americans in America today.Chicago's union movement has had a history of racism.Minorities have been largely excluded in the some of the major unions.As far as Chicago being a "world class" city: Chicago used to have a population of 3.6 Million in the 1950's.It has now 800,000 less people.The basic principles of microeconomics apply everywhere,when you are a high cost place of doing business it's very difficult to compete.I didn't put in the article that Chicago's been net loser of factories in the last 10 years or that two thirds of all jobs now in Cook County are outside Chicago's city limits.When you have an employment head tax and the highest retail sales tax it's hard to bring new businesses and jobs to Chicago.Chicago is America's third largest city but has the FBI's largest public corruption squad.There's a reason.

The poor and middle class have been taxed out of Chicago.Those Abt trucks you see delivering electronics in downtown Chicago are there for a reason.People evading Chicago's sales tax.Abt is the now the largest single location seller of electronics in America.Glenview has Abt's sales tax revenue but Chicago doesn't.

If we look at America's top 10 cities by population in 2008,only Chicago and Philadelphia have lost population since the 1950 census.New York,L.A.,Houston,Phoenix,San Antonio,San Diego,and San Jose all have increases in population.

It's poor logic to compare

It's poor logic to compare growth since the 1950s to 2008's list.

The top 10 in 1950 were totally different than they are now. Here's the top 10 from 1950, with their population change compared to 2007 estimates:

New York (+4.8%), Chicago (-21.7%), Philadelphia (-30.0%), Los Angeles (+94.6%), Detroit (-50.5%), Baltimore (-32.9%), Cleveland (-50.2%), St. Louis (-59.1%), Washington (-26.7%), Boston (-24.1%)

Per that, Chicago fared third-best from it's top-ten peers since 1950.

Interestingly, the total population of the U.S. was 150,520,798 in 1950. In 2007 it was estimated to be 302,200,000. That means the U.S. as a whole grew 100.7% in those 57 years - even faster than the rate of growth for the winner from 1950, L.A. with 94.6% growth.

What does that mean? It means that those cities, including Chicago, almost certainly lost population due to trends far more powerful than anything the cities themselves could control. Knocking them for "losing population" when all the Top Ten cities from 1950 lost population when controlled for the nation's overall growth is sort of silly.

What changed since 1950 to cause the population shift? Two things - the interstate highway system, and the jet age. Both of those allowed people to live much further both from their office and their parents and still travel to each in a reasonable amount of time. The interstates allowed people to commute from jobs in the cities to homes outside of the cities. They didn't move out because of tax policy, but because of crowding and seeking more space.

For leaving whole regions, many people don't want to live more than a day away from their extended family. When jets made the whole country less than a day away, the nation re-distributed its population.

And don't discount the weather factor. Air conditioning from the 1930s on impacted population patterns, too. Who wanted to live in the middle of a desert or Gulf Coast swamps in 1900? But when air conditioning is relatively cheap and easy both at home and in the car, living in a sunny place suddenly has no downside, leading again to population redistribution.

I won't even get into changing of structure - family size - that you don't even mention, but plays a huge role in city population changes over time. Here's a hint, though: the data is harder to find, but try comparing historical jobs numbers in cities from 1950 and today and see how the rankings move then.

Chicago has faults, but your very premise is flawed when it comes to using population as a measure of success.