Crain’s: Growth leads Chicago to highest job peak in decades

After a half-century in which the city of Chicago steadily hemorrhaged jobs to its suburbs, the city has swept by them since the Great Recession ended—a historic job spurt in which the city proper now is leading rather than retarding metropolitan-area employment growth.

New figures released by the Illinois Department of Employment Securityindicate the total number of private-sector, unemployment-insurance-covered jobs in the city grew 168,000, or 16.6 percent, in the seven years ended in March. The expansion was concentrated in the Loop and the Near North, West and South Side areas adjoining it, where the total number of jobs leapt nearly a quarter. But the action also is showing signs of spreading into outlying neighborhoods.

In comparison, private-sector employment rose 13.5 percent in the six-county Chicago metropolitan area as a whole in that period—and just 11.2 percent if you don’t count Chicago. That’s just two-thirds of the city-only expansion rate.

Municipal officials and independent experts are hailing the city turnaround, which after seven years of steady growth appears unprecedented in the post-World War II period, and which continued unabated in the past year.

One other notable tidbit: In 2017, for the first time ever, a majority of jobs in Chicago as a whole were located in the central area of the city.

“Clearly the greater Loop is booming,” says Aaron Renn, a demographer with the Manhattan Institute and publisher of the Urbanophile blog. “It’s easy to point to the state and region’s well-known problems and challenges, but to date these have not kept companies from investing and growing in Chicago.”

Though growth is uneven, the big service industries that are hiring “increasingly want to be in big cities, like Chicago,” says Jeff Mays, director of the Illinois Department of Employment Security.

But though job growth has picked up in some suburban areas, notably Will and DuPage counties, other areas are lagging. For instance, suburban Cook County has added jobs at less than half the rate as the city since 2010, and actually lost jobs in the year ended in March.

In those areas at least, taxes “remain a big part of the problem,” says Orphe Divounguy, chief economist at the Illinois Policy Institute, a Chicago-based libertarian organization. “There has been job growth in Chicago, true. But the rest of the state is struggling.”

The latest numbers come from “Where Workers Work,” an IDES publication that collects its data not from surveys that are subject to sampling error but a hard count of unemployment insurance payments by employers. The numbers are through March, and subject to revision, but generally have changed little in prior years.

STATE, NATIONAL TRENDS

According to the department, overall private-sector UI-covered jobs in the six-county region—Cook, DuPage, Kane, Lake, McHenry and Will counties—was up 48,145, or 1.4 percent, in the last year. That’s better than the state as a whole, but less than national growth, which has held at about 2 percent a year since early 2012.

Total metro jobs peaked at 3.43 million in 2007, before dropping nearly 10 percent in the recession. Recovery was fairly slow: The region didn’t surpass its prior employment total until 2015, eight years later.

The recovery in Chicago proper came more quickly—and kept going once the old peak was broken.

Total city jobs slipped about 85,000 between 2008 and 2010, to 1.01 million, but the city gained all of that back by mid-2014. The latest totals, in March, have employment at 1.18 million, up 2.1 percent in the past year. That’s the highest since 1990 and possibly longer, since IDES changed its methodology that year away from a system that likely overstated city employment.

Driving those numbers is what’s happening downtown. The central area now has a reported 593,665 private-sector jobs, up from 479,199 in 2010—an increase of 114,000, or 23.9 percent. The one-year increase was 3.9 percent.

CATCHING ON

Now that growth appears to be spreading to neighborhoods throughout the city. In the 12-month period, the South, West Central and North sections of the city each gained at least 1,000 jobs each. All of them are past or near the employment levels they had in 2001, even though the city has lost at least 100,000 residents in that period. The two sections that are markedly down since 2001, the Northwest and Southwest sides, are older, once heavily industrial areas.

City Hall is seizing on the new figures, arguing that Mayor Rahm Emanuel’s effort to spread downtown prosperity to new areas is showing results.

While downtown growth is “encouraging . . . the exciting news in this report is that we are seeing the employment growth extend to other parts of the city,” noted former Deputy Mayor Andrea Zopp, who now heads World Business Chicago, the city’s public-private corporate recruitment arm. “We’re clearly headed in the right direction.”

The IPI’s Divounguy is less sanguine. Central city growth is “fantastic” compared to surrounding areas of the region, he says, but local wage growth is not as fast as it was compared to the state as a whole.

If so—and the differences Divounguy points to are fairly small—it may be because Chicago and downtown in particular are attracting new kinds of jobs now as parts of the city reposition themselves to serve tourists and younger college grads who are moving in.

WHICH INDUSTRIES?

According to the “Where Workers Work” data, the big drivers of city employment growth since the recession are professional services, health care and accommodations and food services, each of which gained more than 30,000 jobs. Pay rates in the latter are relatively low. So are wages in the single fastest-growing local jobs sector—arts, entertainment and recreation—in which jobs grew a nifty 37 percent over seven years to 23,488.

Deciphering the figures and their implications will take more time. So will determining whether Chicago is just part of a national trend or truly off on a new path.

A study of job growth between 2007 and 2011 found job growth in Chicago on the high side relative to other cities, and growth in its suburbs relatively low. Compared to New York City, whose monthly jobs data is posted online by the state of New York,Chicago is about the same. Its overall 16.6 percent private-sector job growth between March of 2010 and March of 2017 was less than New York’s total of 21.6, but Chicago’s downtown growth of 23.9 percent was greater still.

Either way, a trend that lasts seven years may be less of a trend than a new reality. In terms of where jobs locate within the metropolitan area, something seems to have shifted.

(Source)

Leave a Reply