19.6.19

A QUESTION FOR FUTURE RESEARCH.

Perhaps not by me, but there might be somebody with the empirical chops to address the dual anomalies of gentrification and greater income stratification.  In Chicago, for example, who is bidding up the housing prices?
Chicago’s middle class, once the backbone of the city, is declining so swiftly that it’s almost gone, and a set of maps from a local university lays that reality bare.

The dynamic stands to affect nearly everything about Chicago going forward, from politics to schools to who will live here.

“It raises a lot of questions as to what kind of city it will be,” said Janet Smith, co-director of the Nathalie P. Voorhees Center for Neighborhood and Community Improvement at the University of Illinois at Chicago, which compiled the maps that document Chicago’s shrinking middle class — and an increasingly polarized city — over the past five decades.
It might be too facile to suggest that Illinois being a tax hell run by and for Chicago Democrats is the proximate cause, although that probably matters at the margin.  There ought to be limits to how steep the urban land-rent gradient is, no matter how spiky the world is or how impossible the traffic might be.  Those urban agglomeration economies seem to be at work, though, as upscale neighborhoods emerge.  "Just 8 percent of Chicago's census tracts were considered high or very high income in 1970. Today, more than one-fifth of the city’s census tracts are higher income."  We've been aware of that for some time, that's the fifteen square miles of privilege surrounded by the third world.  But the high-income residents want their amenities, and the entry-level service jobs.
In U.S. cities over the past several decades, “the jobs that were added tended to be at the very high end or at the very low end, “ said Rick Mattoon, senior economist at the Federal Reserve Bank of Chicago.

Chicago has a high share of college educated workers, “higher than the share that's in the suburbs at this point, which is a historic flip,” said Mattoon.

But highly educated, highly paid workers — attracted in recent years to urban centers — tend to demand a lot of services. Think retail, restaurants, hotels, and entertainment. “And so that creates a big demand for entry level workers.”

Left out of this dynamic are the middle-class manufacturing jobs that used to be heavily concentrated in places like Chicago, Mattoon said.
What happens, though, when the housing demand plus the expansion of offices outbids the restaurants and taverns and health clubs and poodle groomers for the available space?

The article offers a partial explanation for the income polarization, it involves many of the formerly middle-income jobs becoming more valuable, whilst others have been automated away.

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