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Friday, October 25th, 2013

Another Reason Why Chicago Weathered Industrial Decline

I’ve written a lot about the two Chicagos, one successful, one struggling. Obviously that’s a problem, but from the standpoint of a lot of Midwest cities that’s a nice problem to have as they have more broadly struggled to reinvent themselves for the new economy. While most Midwest cities have areas of relative affluence, mostly in favored quarter suburbs, very few of them have managed to pull off any type of material urban core revival. Although incomplete and not inclusive, Chicago has many square miles of thriving neighborhoods. How did this happen?

There are a lot of reasons, but I want to highlight one thing about Chicago that seems to me to be different from other cities: the unusually strong commitment of the corporate community to Chicago. I’ve written before about the decline of civic leadership culture resulting from structural economic change. And while Chicago has experienced many of the same things – the fortunes of its businesses and executives are seldom actually linked to the success of Chicago as a whole, for example – corporate leadership has retained an usually strong civic commitment.

One way this has manifested itself is in defending corporate headquarters, especially through mergers. When Bank One of Columbus, Ohio bought first Chicago, First Chicago agreed to be bought, but insisted that the HQ be in Chicago. IIRC, Jamie Dimon was Bank One’s CEO at the time and took over the merged entity. (You can argue that with somewhere around 15,000 JP Morgan employees, Columbus still got the better end of the bargain, but the symbolism of the headquarters was important). Similarly, in the Continental-United merger, United was ok with Continental’s CEO taking over, but the merged airline had to be based in Chicago. When AON insurance reincorporated its HQ in London and moved 50 employees there (a fairly minor move in the grand scheme of things), the Chicago directors on the board, although they agreed with the business logic I suspect, decided to abstain from the approval vote.

You might throw out a name like Dan Gilbert as an old school industrial titan who’s a booster for his hometown of Detroit, but he’s of recent vintage. Clearly in other cities corporations and their chieftains are involved in various civic ventures, but my anecdotal observation is that there’s something different in Chicago.

A Well-Heeled Followup

In follow-up to my recent article on Chicago’s active pursuit of elite oriented urbanism, this week provided yet another clear example of it. In a shrewd move designed I suspect mostly to embarrass Rahm Emanuel by making him put his cards on the table, a south side alderman proposed implementing a $25/year bicycle registration fee.

Let’s put aside the merits of such a fee. I’m not categorically opposed to it as it regularizes and in a sense institutionalizes and officializes bicycles as a transport mode on par with the car, one able to stand on its own two feet. However, it’s also very clear that most of these proposals are simply gratuitous provocations designed to annoy bicyclists and cause them pain. I would probably say this is just trying to nickle and dime bike owners and would by unlikely to push one myself.

In this case, knowing bicycles are a priority of Rahm, the proposal is appears to be intended to force Rahm to reject it, while continuing to move forward with a raft of other fee increases he wants, including a $0.75/pack cigarette tax hike.

What I want you to consider is Rahm’s own stated rationale for why he rejects the bike tax:

Two years ago the city of Chicago was ranked 10th in protected bike lanes and 15th for startups. IBM did a survey. We moved to 5th in protected bike lanes – and are making more progress – and we moved from 15th to 10th, according to IBM, worldwide on startups. Now the two are not correlated, but it’s not an accident that Google and Motorola chose to move their headquarters to where the first protected bike lane went, and where there’s a mass transit stop. This is why transportation is so essential, not just to move people, but recruiting companies. So as it relates to her tax, she can propose it. It’s her idea. But I argue that’s not the right way to go [slight cleanup for flow]

A high school buddy of mine once said ZZ Top would never be a band accused of hidden sexual lyrics, because they’re not hidden. Similarly, it doesn’t take any parsing or inference to understand Rahm’s strategy to cater to the high end. He’s very transparent about it. It’s how he publicly justifies his decisions. Again, the point I want to make here is that, actual impacts on rich and poor and the wisdom of the tax aside, Rahm Emanuel defends his position by explicit appeals to its impact on the elite.

Here we have a guy who’s basically saying that if the city imposes a $25/year fee on the well-paid employees of one of the world’s largest and most profitable tech companies, firms like that might not choose Chicago. What does that say about how attractive he thinks Chicago is as a place to do business that companies might be so easily discouraged from choosing it?

Apparently high end residents and businesses can’t even have the most minor of inconveniences imposed, while the city piles on regressive “sin taxes” on a population that is addicted to tobacco and disproportionately low income. That’s Chicago’s policy in a nutshell.

46 Comments
Topics: Economic Development, Urban Culture
Cities: Chicago

46 Responses to “Another Reason Why Chicago Weathered Industrial Decline”

  1. Andre says:

    In my opinion, the bicycle registration proposal is ridiculous not because it would “detract” companies from locating in Chicago, but because it was proposed to take place of an increase on cable fees, which have larger ramifications economically speaking.

    That sort of thinking just boggles my mind. Discourage couch potatoes or discourage light exercise? Discourage decreases in traffic and emissions or encourage further mindless brainwashing?

    Pushing bikes not only attracts companies to Chicago, but pushes people off their couches.

  2. Matthew Hall says:

    Are we sure that Chicago did survive industrial decline?

  3. Andre, Rahm could have said he was opposed to the tax because he wanted to encourage healthier lifestyles. He could have said he opposed it because of poor kids whose parents don’t have enough money to pay the $25 fee for their bicycle. There’s a lot of arguments he could have made. But he didn’t. Instead, he went straight to Google.

    Matthew, certainly in large portions of the city, Chicago is thriving. It’s probably 500-750,000 people, or 2x the entire population of Cincinnati.

  4. Bob Cook says:

    Rahm is already known in some quarters locally as “Mayor 1%.”

    http://www.nbcchicago.com/blogs/ward-room/Mayor-1-Catches-On-137582313.html

  5. Tone says:

    The City of Chicago is thriving in a huge portion of it’s borders. The population of that area is easily 1 million people and more like 1.2 Million depending on ones definition of thriving.

  6. Tone says:

    I completely agree with Andre.

  7. pete-rock says:

    On the “Chicago weathered industrial decline” question, I agree that Chicago has maintained its strong commitment from the corporate community and held onto its corporate HQs, and you can thank mayors Daley I and Daley II for that. Whatever their flaws, they were paragons of political stability for corporate types in an era of big change. I think Rahm’s trying to do the same, but he has none of the neighborhood cred that either Daley had and he’s much more brash about being corporate-oriented.

    On the bike fee question, the alderman who proposed this is a former planning deputy commissioner for the city and I think she understands what she proposes better than most people think. Not as a shrewd attempt to embarrass Rahm, but an earnest attempt to generate revenue from a preferred policy direction of the mayor.

    But maybe I’m the pollyana.

  8. Could be pete-rock, but I find it hard to believe anyone would ever think Rahm would be on board with such a tax.

  9. Eric Fazzini says:

    In planners pursuit of date-driven analysis, we always forget the simple make up of places. Chicagoans don’t view themselves at Midwesterners but as Parisians, NYCers, and other urbanites view themselves.

    The City is The People
    The City is The People
    The City is The People

  10. Eric Fazzini says:

    pete-rock, it’s amazing to me how hard IN tries to lure Chicago businesses away with their low tax rates and cheap land. Chicago really is an example of how important urban atmosphere is to companies, but lets not forget that it’s historically also been a major financial player because of the commodities exchange and manufacturing related tech companies like Boeing that played of the industrial past. Being a finance hub may be even more important when judging the success of cities than being a tech hub. What is NYC first and foremost?

  11. Rod Stevens says:

    One of the things I’ve always liked about Chicago is resident’s pride in the city. It is palpable. That is a tremendous advantage in making urban decisions, for it keeps corporate leaders loyal.

    Business development is ultimately about relationships. People do business together because they know one another. Chicago seems like a place where people know one another, in part because they are not just spending two or three years of their career there before moving back someplace else. I am sure that happens, but the people I knew who moved there for jobs stayed. I don’t know, but I suspect that is less true for the other big but declining industrial cities. One of the best ways of revitalizing a place is restoring its sense of pride. Perhaps that is why the big reflective object in Millennial Park is so successful: when you look at it, you see the city skyline reflected back.

  12. I don’t think Emanuel’s point here is that a $25-a-year fee would be a financial burden on Google engineers; that’d definitely be silly. I think his point is that a bicycle registration and licensing system would by its nature discourage biking among the entire population, and that cities with lots of biking tend to be pleasant and attractive, and that companies like Google (and the type of people Google wants to recruit) are drawn to pleasant and attractive cities.

    As for the comparison with sin tax hikes, that’s only legitimate if sin taxes and bike fees function comparably as money-makers. They don’t; sin taxes are cash cows and bike license fees always lose money. So I think that, public statements aside, there might be a simpler explanation for Emanuel’s position.

  13. Racaille says:

    “Apparently high end residents and businesses can’t even have the most minor of inconveniences imposed, while the city piles on regressive “sin taxes” on a population that is addicted to tobacco and disproportionately low income. That’s Chicago’s policy in a nutshell.”

    Let me correct that for you. That’s America’s Policy in a nutshell.

    Furthermore, if you insist on banging on about Chicago (of which you really lack insight) please upgrade your data:

    http://www.peopleforbikes.org/blog/entry/chicago-now-countrys-bike-city

    Sin taxes as cash cows? Good one. How about discouraging it’s abuse, or do you believe cigarettes should be cheaper to increase its usage?

    @Micheal Anderson.

    You are correct. As this is yet another Aaron Renn post about the City of Chicago…the city that he left behind based on a bad decision, hence the mental gymnastics to support his move.

  14. Alon Levy says:

    Michael: yes, that’s the explanation, but it’s still forced and contorted. It turns bike lanes from a service a city needs to provide to city residents to a prop a city needs to have to look nice so that it can compete for corporate headquarters.

  15. Fair enough, Alon. I don’t disagree with your value judgment, but I also assume you wouldn’t disagree that Emanuel’s argument is more or less true, and that it’s politically easier for him to make than your more sweeping take.

  16. Alon Levy says:

    No, I would actually completely disagree. His argument is on the same level of “lack of pirates causes global warming.” That sneaky “it’s not correlated, but” reminds me of all those “I’m not racist, but”-type arguments: he’s saying, with a straight face, that Motorola chose its headquarters based on where there are more bike lanes, while actually denying that he’s saying that. He presumes his audience is familiar enough with that argument that it just needs a factoid about IBM rankings (of startups rather than multinational corporate headquarters, even).

    Also, re political ease, he is the dictator of Chicago. He can use whatever argument he likes and he’ll still get his bike lanes. Freed from political constraints to actually listen to constituents, he ignores them and cares more about corporate headquarters.

  17. James says:

    So if I understand the argument correctly attracting more businesses like Google only serves wealthy? As in it will help create zero middle or lower class jobs? At this point the credibility of these articles on Chicago really comes apart. It is clear you have an ideological axe to grind against Rahm, but I don’t understand why. You’re saying that Chicago would be better served in the aggregate by chasing away big companies like google? I have a hard time believing that you really mean what you are arguing.

  18. James, you have complained that I’ve put words in your mouth, so I don’t recall saying that Chicago should chase away big corporations.

    Also, I until that City Journal piece I’ve largely not criticized Rahm. If you go back and read my Chicago pieces, I generally give him credit for a lot of things, acknowledging the tough situation he inherited, the lack of easy choices, and in general not really criticizing the decision’s he’s made.

  19. Alon Levy says:

    No, the argument (at least in the direction I take it) is that Chicago would be better served ignoring Google and worrying about general business climate issues like how long it takes to start a business or about the welfare of Chicagoans. Google can take care of itself; New York club owners who have to blow $250,000 on renovations and permits before opening can’t, and the same is true of people who are choking on asthma because of freeway pollution. Google isn’t exclusively for the wealthy, but most of its employees are upper-middle class.

  20. the urban politician says:

    I guess nobody noticed how Rahm (and the State of Illinois) are kind of stiffing ADM right now, contrary to the theme of this post (which I mostly agree with).

    Perhaps even Rahm is coming to recognize that he has developed too much of an image of being cozy with business elite. I wonder, then, if he or the State are willing to let ADM slip away..

  21. Claude Masse says:

    First;being relatively new to Urbanophile I enjoy the lively discussions with smart thoughtful examinations&critique.
    Chicago to me&I’m sure many outsiders,is muscular&forward thinking.I’ve been to the city several times&recall the pride of place most cities look up to.I saw the littered&rusty in juxtaposition with the spotless and premier planned.Nothing unusual in my travels to front runner cities.Chicago though had an advantage to me.I’m a naturalist ,self taught art historian&artist.When I was a kid I drew skylines&cars.The bold towers of Chicago vied with New York,and other cities in my orbit.They provided a template for my line,which had a deep influence on my natural eye.My dad would test me with skyline pictures.I would identify cities like Memphis&Salt Lake right off.He dared to show me Chicago?I drew Chicago!
    My point is the city fathers have done an exemplary job of imprinting the city in the lore of our country.Chicago belongs to American people’s knowledge base of a US city first mentioned in conversations.So even in New England,we feel kinship with the big shoulders of the White City.
    Just thinkin’

  22. urbanleftbehind says:

    Gov. Quinn might be behind the reticense to aid ADM move from decatur. The appearance of helping “save” ADM in its present hq location helps him in a key den stronghold. The illiana is also a play for exurban votes.

  23. James says:

    Fair enough, you did not say Chicago should chase away big corporations.

    You did say that Rahm’s argument was to make explicit appeals of the tax’s impact on the elite. Do you really think that a Motorola employee making 70k a year is “elite”?

    http://www.salarylist.com/company/Motorola-Salary.htm

    And you did argue that it was important for Chicago to avoid sending messages that “Chicago is not friendly to business”.

    http://www.urbanophile.com/?s=business+friendly

    It seems rather inconsistent. Isn’t the tax a message to Google and other businesses? Or is Rahm wrong when he says Google chose their location because of transit, including the L and bike lanes? Or is Google the exception because they are so rich?

  24. Andrew says:

    Aaron, I ask this in all seriousness: what is Chicago to gain from catering to anyone below middle class? I understand that, ethically, inclusive policies are appropriate, but we live in a society where cities compete for the most attractive residents. Don’t rational leaders in that environment have every incentive to push the poor elsewhere in favor of attracting wealthy citizens who create more tax revenue and less violent crime? I, too, wish Americans were more amenable to class-integrated cities and neighborhoods, but I also understand that we live in a world where, token efforts to create “affordable housing” notwithstanding, residents will do everything in their power to keep Detroit on the other side of 8 mile.

  25. Ziggy says:

    The problem isn’t necessarily the Mayor’s plans to lure creative class employment via bike paths. It’s the absence and even hostility to the other 5/8 portion of the city that doesn’t qualify as “creative class.”

    It’s a massive planning and p.r. fail on his part, and reveals the presence of life inside the Rahm Bubble that caters to the 1%.

    Despite the failings of Mayor Daley’s second decade, there were always highly visible public improvements happening to schools, parks and streetscapes across Chicago’s 77 community areas, and many of these have reaped clear benefits.

    The Rahm Bubble will continue to be a problem until he pops it. Maybe via a personal bike ride down Rooservelt Rd through Lawndale, west on Augusta Street through East Humbolt Park, West Humbolt Park and Austin, or down Western Avenue through Chicago’s south side to learn how the other 99% actually live.

  26. First off, I support bike infrastructure. Here’s what I would say needs to change.

    1. Rahm’s rhetoric is an “unforced error”. It needs to change.

    2. The pain needs to be shared. It’s clear there are service cuts that heavily impact lower income communities. What obvious cutbacks have targeted the upscale? It’s hard to name one. Indeed, with bike infrastructure, etc. it appears their quality of service is improving for things they can’t buy on the open market. Similarly on the revenue side, the city has relied heavily on regressive fees, fines, and narrowly tailored taxes instead of rate increases in broad-based progressive taxes like the property tax.

    3. No more TIF to ring-fence property value improvements into high end districts like the Loop. The city must harvest a return off of its investments in these places. If there’s a broader ROI, then we really have a genuine investment. Eliminating TIF would also make more of the funds fungible, which would surface the policy choices and bring them into the public debate.

    4. Public safety is job one and without it in a sense government of any type loses its moral authority to govern. The city needs to make step change reductions in the violent crime rate, especially shootings, in neighborhoods like the ones Daniel Kay identified. I would say start with hiring a net new 1,000 people officers, no matter what else needs to be sacrificed to do it. (Keep in mind, 3,000 officers are presently eligible to retire.

    5. More management time and attention on business climate concerns like the regulatory environment. If Rahm really wanted to make major trajectory change in Chicago, he would put his political capital on the line to radically roll back aldermanic privilege and convert most items into administrative approvals.

    6. Equitable distribution of new amenities. Not everything needs to be started and piloted in the Loop and north side. I don’t think it’s such a bad idea to do it with bike share, but imagine if bike lanes had first been rolled out as part of a broader safe routes to school program on the south and west sides?

    I have published voluminous ideas here regarding Chicago, targeted at various aspects of the city. You might consult my State of Chicago series.

    I’ll be the first to tell you that solving the two-tier society is an extremely hard problem, a good chunk of it is macro-economic, and out of Rahm’s control. But there are things that can be done.

    To respond to another commenter, why do it? Because we live in a commonwealth in which we have a shared fate with our fellow citizens and in which we have duties to people other than ourselves. This idea seems to have gone out of fashion lately, so it’s no surprise to me America has run into the problems it has.

  27. the urban politician says:

    To Ziggy (post #25) and Aaron (post #26):

    I couldn’t disagree with both of you more. It is bordering on hyperbole how much you are exaggerating Rahm’s “cuts” to the poorer areas of the city.

    Schools were closed. Some hours were cut from the library.

    Give me a break.

    Pretty much all the services are still there, and as I mentioned some are being improved. Housing for the poor is still being built with massive city subsidies.

    But in the meantime, you do have to raise revenues. And you don’t achieve that by running bike lanes through Englewood. How ridiculous of an idea it is to think that people will be interested in riding their bikes through gang ridden territory.

    You raise revenues by attracting professional class people to a growing city core, knowing that middle class people are going to leave anyhow because they favor the suburbs/exurbs for reasons outside of Rahm’s control.

  28. Tone says:

    the urban politician is correct. CPS has 30,000 fewer students, schools needed to be closed. Unfortunately, the vast majority of the decline in students was African American, so the closed schools are in areas with AA majorities not surprisingly.

    The library hours were reduced slightly, they are still open 6 days a week.

  29. Tone says:

    Does anyone know how many police it will take to reduce crime in Englewood and Austin? I’m curious.

  30. Daniel Hertz says:

    The city put through the largest school closure in the history of the country. That’s pretty drastic. You can say that it’s about funds, and there’s certainly some truth to that. But a) the administration has already dramatically lowered their estimate for how much money will be saved by the closures–something they have a history of doing with other ostensibly money-saving projects like garbage collection, b) the “disuse” formula was questionable, c) many, many schools are massively overcrowded, and d) much of the decline in enrollment in public schools has to do with the massive increase in the total number of schools thanks to charter openings, which have spread students more thinly.

    The mental health clinic closures were also a big deal. Also, the amount of subsidized housing in the city is still far below what it was pre-Plan for Transformation. Whether or not you think the Plan is a good thing–and I think it probably is–the implementation has been a disaster for anyone who relies on public housing to put a roof over their head. It’s also not great for the market-rate folks who live near CHA sites that have been left vacant for years.

    Also, anyone who thinks that people don’t ride bikes on the South and West sides–yes, in relatively high-crime neighborhoods–has clearly never been to the places they’re talking about. If you live in these places, or have friends or family who do, or work there, then yes, you very well may be interested in biking through them, whether or not the idea makes North Siders or suburbanites squeamish.

  31. the urban politician says:

    Daniel,

    Chicago also saw one of the most massive exoduses of black people in a decade too. Sure, Charter schools were built and I argue that if people are just migrating to a new school being built by the city then doesn’t that argue against the point that the city is CUTTING services?

    Second, we are talking about Rahm catering to the top 1% and ignoring the other 99%. This is ludicrious because the majority of Google employees aren’t in the top 1%. The majority of the “other 99%” aren’t CHA residents. So if the city is not replacing as much subsidized CHA housing as it is tearing down, that doesn’t mean that “the other 99% is being ignored”.

    In fact, I don’t even understand what you’re arguing. Is this some sort of moral argument? Is it Chicago’s exclusive duty to warehouse the poor in prime real estate close to transit and high paying downtown jobs? What about the suburbs. What about the fact that a majority of jobs in the region are in the suburbs, and the types of jobs more fitting for lower income residents are more likely to be located there than in a swanky downtown office tower?

    Also, what is being forgotten in this discussion is that there is more to City services than just handing things out to the poor. How about trying to build the tools towards upward mobility? The city is subsidizing a new factory on the far south side, and once again narry a mention about the City’s major investment in the City Colleges system. Here is yet another update on this, which I find much more substantial than some paved bike lanes:

    http://www.cityofchicago.org/city/en/depts/mayor/press_room/press_releases/2013/october_2013/construction_to_beginon45milliontransportationdistributionandlog.html

  32. The average salary at Google in 2011 was $141,000/yr, which would put you in the 87th percentile of income. Not the top 1% but certainly not hurtin’.

  33. myb6 says:

    +1 to Andrew.

    Aaron, your response about the commonwealth was off-point and generated a George Clooney-sized smug cloud. Andrew didn’t argue that society should ignore those below middle-class; point was that we’ve created an institutional environment where cities have little choice but to enact regressive policy.

    You’re free to disagree with that assessment, but make the case. I asked for that case in the comments of the last Rahm post. I’d be very interested to see examples of progressive policy that worked long-term in comparable cities.

    +1 also to TUP. That middle-class urbanites should be wholly responsible for addressing urban poverty is an unspoken (and unsupported) assumption seemingly held by pretty much every American who’s not a middle-class urbanite (which is why so few Americans have chosen to remain in that demographic). It’s a rare case of actual, literary irony, that Aaron seems to buy into an assumption that harms the cities he claims to love.

  34. myb6 says:

    PS I think that Aaron is correct about Rahm’s worldview, and “smug cloud” is supposed to be a funny South Park reference and not an insult.

  35. Tone says:

    Very good points above, it is not the responsibility of city governments to provide specialized services for the poor.

  36. the urban politician says:

    myb6, I am reposting this statement by you because it deserves repeating. This is the crux of the issue that some of the commentors here (as well as the host of this blog) just don’t seem to get:

    “That middle-class urbanites should be wholly responsible for addressing urban poverty is an unspoken (and unsupported) assumption seemingly held by pretty much every American who’s not a middle-class urbanite (which is why so few Americans have chosen to remain in that demographic). It’s a rare case of actual, literary irony, that Aaron seems to buy into an assumption that harms the cities he claims to love.”

  37. Chris Barnett says:

    I don’t think Aaron is suggesting that middle-class urbanites in any city “should be wholly responsible for addressing urban poverty”. (They aren’t: cities bear a relatively low burden for “poverty programs”. WIC, SNAP, Section 8, Section 42 are Federal programs and Medicaid is State/Federal.)

    I think Aaron’s suggesting that the top 33% (upper class) cannot keep reaping more municipal-spending benefit (and he is suggesting that Google’s median wage of $141,000 is not “middle class” in Chicago).

    Middle-middle class is something close to the national median income…around $52,000. $75,000 puts an income earner in the top 33%. The middle third of income distribution runs from about $35,000 to about $75,000. That is “middle class” in America.

  38. Alon Levy says:

    The 99%/1% frame is horrible precisely because it lets someone in the 90th percentile claim to be One With The People and argue that anti-poverty program targeting the bottom 20% aren’t a big deal. There aren’t two New Yorks, or two Chicagos, or two USAs, but three or four at least, and even the top group is large and income-diverse enough that it includes many people who think the elite isn’t listening to them.

    So the state of public housing is important, library closures are important, and bike lanes and transit in neighborhoods in the bottom half of the income distribution are important, even though there are plenty of people in the 99%, and even in the 80%, for whom those programs are completely irrelevant.

  39. myb6 says:

    Chris,

    -”Middle class” has a variety of interpretation, but yours is not one of them. I mean “skilled workers excluding command/control”.

    -Under discussion are public safety, education, transportation, recreation. These are huge expenses disproportionately borne by middle-class urbanites relative to their non-urban peers. Aaron has been very clear he wants to transfer such services away from urban Global Chicago to urban Rusted Chicago. In the long-run, this is indistinguishable from a tax on love-of-cities, hence the irony.

  40. Chris Barnett says:

    “Middle class” is an economic term that literally means the middle third of the income (or wealth) distribution. It has nothing to do with job responsibilities.

    “Skilled workers excluding command and control” would exclude a vast pool of people from the middle class who are, in fact, middle class. People who make $141,000 per year coding for Google are NOT middle class; what defines the difference between them and middle class is NOT the work done to earn money, but solely how much money is earned for work (and the lifestyle choices that the income allows).


    The argument that urban dwellers somehow pay more for public education, transportation, or recreation relative to “non-urban peers” is an unproven assertion, and I suspect it’s flat-out wrong. The “non-urban peers” pay a lot for public education. They spend a lot out of pocket for transportation (both personal and public, in regions with good public transportation). In a setting where property taxes are a significant part of municipal budgets, lower-class people DO pay taxes embedded in rents.

    The only argument I’ll grant is public safety. People in middle and upper class neighborhoods are not big “consumers” of public safety service. They do pay something extra for police service where it is most-used, typically not their neighborhoods.

    But this argument seems to devolve into a “menu-driven” or choice model of public service: I’m willing to pay for only what I use. No kids in public school means I don’t pay for that. No crime in my neighborhood means I don’t pay for public safety. I buy books on Amazon or download them to my e-reader; I have no need of public libraries. I walk to work, so I don’t want to pay for road plowing. But I want bike lanes and nice parks in my neighborhood.

    I realize that I have almost reduced your argument to the absurd…to make Aaron’s point that we live in a commonwealth. Some things are simply shared, public goods that we all must pay for as the price of living in a city in a civilized society.

  41. myb6 says:

    Chris, Wikipedia “middle class”.

    The following statements make it clear to me that I’m not communicating:
    ““non-urban peers” pay a lot for public education”
    “lower-class people DO pay taxes embedded in rents”
    “argument seems to devolve into…I’m willing to pay for only what I use”

    It’s not the idea of commonwealth or public goods that I’m questioning. I’m also not claiming that Rusting Chicago pays no taxes, nor that non-urbanites pay no taxes, just that middle-class urbanites are bigger *net payers*. I think you might be getting tripped up on “wholly”. That was in reference not to current reality but the implied reasoning of Aaron (and nearly all the non-urbanites I’ve ever encountered in a political context), hence “should”.

    As for the net-payer claim, correct, I’m not compiling a thesis here with supporting documentation, but if you really don’t believe that the massive numbers of poor urbanites receiving municipal services mathematically requires a burden on MC urbanites that MC non-urbanites don’t bear, that’s fine; we are living in different realities and you are not my target audience. No harm, no foul.

    The big issue is whether the *municipal level* is the correct level for defacto redistribution, from both an efficacy and a justice standpoint. Under that test, I posit that national progressivity over economic benefit is far superior than progressivity over love-of-Cities (“we all must pay…the price of living in a city”). I find it ironic that City-Lover, of all people, suggests otherwise, and I’d appreciate him elaborating.

  42. Chris Barnett says:

    Where I’m hung up is that in economics, precision of terms is pretty important. (As with “middle class”.)

    Progressivity and redistribution in municipal taxation is another place where I think you are confused.

    I don’t know how to avoid what you characterize as “redistribution” at the municipal public-goods level. The very nature of public goods is that it is very hard or impossible to meter/measure individual cost and benefit. Thus someone will always pay more than they get in return. Someone will pay less.

    This effect is apparent in comparing high and low income people because higher-wage/more-wealthy people make and spend more money and tend to live in more-expensive property. They will pay more in property and income taxes than lower-wage people because they earn and spend more.

    However, most cities do not have progressive income taxes (as states and federal governments do). Nor are property taxes and sales taxes very progressive (even though they often have some basic exemptions built in).

    Municipal taxation is the closest example to absolute and proportionate, certainly the least “progressive” or redistributionist taxation in the economist’s definition of the terms.

  43. myb6 says:

    Chris, your precise meaning of “middle class” is precisely wrong, as in not in general use. I’m sorry. Wikipedia.

    “Someone will always pay more…someone will pay less”
    Yes, who? How much? For what? That’s the whole point of the discussion. Aaron is clearly making an argument about the distribution of city services, I’m responding. Hard to quantify? Sure. Doesn’t mean it’s not real. Look for second-order effects in how people vote with their dollars/ballots/feet.

    “Municipal taxation is the closest example to…proportionate”
    Proportionate over what? Over income? Only if limited to people living within the municipal boundary, which is missing…the…entire…point.

    Chris, I’m sorry but I’ve already put way too much time on this, everyone else moved on. All I can suggest is re-reading the posts and thinking it over; I really don’t think anything I’ve written has been controversial or complicated (just un-addressed).

  44. the urban politician says:

    Cities have long learned that if you keep trying to raise revenue to service the poor, people just form their own towns encircling the city, with people of like income and backgrounds, just to avoid paying for such services that they choose not to use.

    Sound familiar? It’s called THE SUBURBS.

    I don’t blame Rahm for trying to strike a balance here. That is all that I see him doing. The notion that he is “decimating services for the poor” is so out of line that it bears ridicule.

  45. Tone says:

    “I don’t blame Rahm for trying to strike a balance here. That is all that I see him doing. The notion that he is “decimating services for the poor” is so out of line that it bears ridicule.”

    Agreed and good way to end the discussion.

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