Abstract
Traces the evolution of Chicago economic development planning from the Central Business District (loop) -serving orientation under the Richard J. Daley “machine” regime to a neighborhood oriented “local producer strategy” established under progressive mayor Harold Washington. Shows institutionalization as Washington’s planners cultivated a neighborhood movement and neighborhood serving local development organizations to enhance the prospects of small manufacturing operations and the retention of industrial jobs for residents. These continued and elaborated into the successor regime of mayor Richard M. Daley, but eventually lost force as the city turned toward neighborhood beautification and other improvements aimed at attracting upscale residential development.
It may seem odd to write of manufacturing in Chicago in the 1980s; more so of Mayor Harold Washington’s initiatives to save manufacturing jobs in the face of a wave of plant closings just as he took office in 1983. Both topics—Washington’s mayoralty and the effort to save manufacturing jobs (industrial retention) were effectively off the table as long-term successor Richard M. Daley gave way to Rahm Emanuel in 2011. Retrospectives on Daley’s twenty-two-year mayoralty celebrated his efforts to accommodate the reentry of middle class and wealthy populations to residential enclaves, and street improvements and such public works as Millennium Park that attracted tourism dollars to the downtown. Despite continued crime problems, low graduation rates for minority teenagers, high and static poverty rates, Daley’s mayoralty was generally seen as successful, and Washington’s was forgotten. Political scientist Larry Bennett’s 2010 The Third City captured the apparent general view: “In retrospect, the Washington mayoralty increasingly looks like the apotheosis of a particular form of political/civic culture that is unlikely ever to return.” 1
Nevertheless, underlying events and professional practice innovations make Washington’s mayoralty a significant history. From 1955 to 1983, Chicago had been governed by a political machine of national repute, led by Mayor Richard J. Daley until his death in 1976 and maintained by successors Michael Bilandic (1976–1979) and Jane Byrne (1979–1983). Under that leadership, economic policy benefited from the legacy of manufacturing while the city devoted public resources to the development of O’Hare Airport and projects to support the Loop business interests—retailers, convention facilities, and the office construction that housed the emerging finance and real estate sectors. The city used federal programs to construct expressways and support urban redevelopment in the Loop; little attention was given to the outlying neighborhoods except for the massive public housing projects given over mainly to the expanding and poor black population. The machine gave city councilors power over neighborhood issues like patronage jobs and the smaller zoning and building issues, while City Hall and the mayor did the big projects. 2
Changing Landscape
By 1983, the political and economic landscape in Chicago and other cities had changed. In Chicago, the black population increased from 23 to 39 percent of the total from 1960 to 1990; while Hispanics (from 1970) went from 7.4 to 19.6 percent. 3 The employment data were frightening. Chicago had been a “city of factories,” but after peaking in the 1950s, manufacturing employment began a long-term decline, so that by 1982 the numbers for the city had dropped from 668,000 in 1947 to 277,000 (the rest of the metropolitan area more than doubled to 468,000). 4
Machine Economics: The Corporate Center Strategy
The losses in manufacturing got major attention, and this was a nationwide preoccupation among urban elites, particularly in the Northeast and North Central states. The usual response was the “corporate center” strategy—replace the lost manufacturing jobs and spin off businesses with an “urban renaissance” emphasizing office development, services, and downtowns as tourist destinations. These cities—like Chicago—invested in highways and office development and some established “buffer zones” keeping low-income residents away. It was a physical, unsophisticated, concept. In 1987, a group of Chicago authors wrote that:
During the first decade following World War II business leaders and municipal officials of big cities across the country sounded the alarm in behalf of urban redevelopment. Their fascination with… physical blight, per se, in contrast to examination of the underlying processes producing blight, suggests that their comprehension of just what was occurring in their cities was not thoroughgoing.
5
A Chicago Central Area Committee (CCAC) of downtown elites supported a series of plans executed by the city’s Planning Department—one in 1983 excited controversy by designating a working-class residential area for improvement: “It… is given over exclusively to physical planning considerations, and… its very vision of the future Chicago originated in the city’s private sector…. “ 6
Chicago’s urban planners had followed the ideas and dictates of the CCAC. Their vision was “strikingly postindustrial,” contemplating the replacement of formerly downtown industrial functions by residences for professional and managerial workers—one plan envisioned new units for as many as 50,000 new people. They were coordinated by Daley, “… an acquiescent planning and redevelopment bureaucracy whose executives shared the business elites’ vision of a new Chicago.” 7
Chicago’s mayors seemed uninterested in other aspects of economic development. Richard C. Longworth wrote:
Mayor Richard J. Daley proclaimed Chicago ‘the city that works,’ and believed so fervently in his own propaganda that until 1976, just before he died, he refused to set up an economic development commission on grounds that Chicago didn’t need economic development;
while “Byrne and her closest advisors, ‘Bonnie and the three Clydes,’ as one Tribune editorial dubbed them—were more interested in property than jobs.” 8
By the 1970s, the Daley machine was under increasing strain, but hung on to power. Factory jobs disappeared or moved to the suburbs, the white working-class population followed, to be replaced by blacks and Hispanics as incomes dropped. A court decree ordered the abolition of most patronage jobs. 9 “Reform” nipped at the heels of the machine, but never got the votes to elect more than a few city councilors. Successive city administrations worked within the machine political culture despite restiveness in the neighborhoods, particularly in the face of an increasing black presence. Even black city council members worked within the machine—however uncomfortably—and got just enough in return that the machine organization and the mayor’s office—largely white dominated—stayed in control until Washington broke through.
Harold Washington: The Progressive Interlude
Alternatives to the corporate center strategy had appeared in a few cities when—partly as a result of neighborhood protest of business-backed policies—”progressive” mayors or council majorities won elections and got public support, in great part because they made serious efforts to reduce inequality. 10 Each did this in different ways. Most typical of other cases were attempts to cut housing costs and to pay more attention to the upwardly redistributive effects of the market—in particular, on housing prices. In Boston, Ray Flynn won election in 1983 along with a “linkage” referendum that would support affordable housing; Santa Monica passed a strong rent control ordinance in 1979. Burlington, VT, helped establish community land trusts that, along with other measures, had 17 percent of the city’s housing under controls that made it “permanently affordable.” 11
Chicago’s approach to progressive policy was fundamentally different. Harold Washington had won office in 1983 as the city’s first African American mayor and as a reform mayor who shifted development priorities toward the neighborhoods and empowered hundreds of neighborhood organizations to have a say in these priorities.
What is less remembered is that Washington used this participatory energy to pursue economic goals—in particular a strategy that stressed “jobs, not real estate.” The jobs goal was the lead item taking up seven pages in the campaign document The Washington Papers and led immediately to several executive orders.
It also led, eventually, to a series of initiatives for industrial retention. The Washington administration sought to retain manufacturing jobs, which typically paid higher wages than other blue-collar sectors and were fundamental to the welfare of poor neighborhoods. That is the focus of this article.
Washington and Robert Mier, his Economic Development Commissioner, established “task forces” for steel and several other manufacturing sectors and experimented with “early warning systems” to forestall plant closings in smaller firms. They greatly expanded the city’s contact with firms that might need assistance by creating a “Local Industrial Retention Initiative” (LIRI) that delegated significant responsibilities to nonprofit agencies. Eventually the city initiated Planned Manufacturing Districts (PMDs)—a zoning device that protected factories from encroachment by other uses. It later supplemented this with a “Model Industrial Corridor” infrastructure planning program. Taken together, these elements were a “local producer strategy” supported by a coalition of small manufacturers, labor, and neighborhood activists, and persisted in at least some of its elements well into the 1990s, after Washington’s death in 1987. 12
Urban Planning
One might think of placing Washington’s effort in the urban planning context: chief actors like Mier and others were urban planners. Mier was on the faculty of an important urban planning program and couched much of his work in the context of urban planning experience. Debates in the professional literature about the “scope of planning” and the growth of the public administration field in the 1930s and 1940s gave the sense of an expanding function for planning at all levels. 13 It would be a reach to claim much local impact for the short lived (1947–1956) Program in Education and Research in Planning at the University of Chicago, but its impact on the profession was enormous and worldwide. (One of its founders, Rexford Tugwell, sought agreement to a definition of planning as “really reflective decision making” appropriate to his “… ideas that planners should constitute a fourth power of government alongside the executive, the legislative and the judiciary.”) 14 Mier’s efforts in the 1980s, while dramatic departures from the limited conceptualizations of pre-1983 Chicago planners, gave further substance to those claims, building on “equity” arguments from Paul Davidoff, Norman Krumholz, and others. But most elements of the earlier professional practice still dominated locally—the preoccupation with the physical, the focus on real estate issues. In this context, industrial retention and the Washington administration’s local economic planning focus were new ideas. 15
Organization of This Article
But the historical record is ambiguous. The election of a black mayor may have been a turning point putting African Americans into political discourse in Chicago, but that discourse was fraught with conflicting interpretations and claims. By 2014, the history is a muddle.
We leave certain very large questions for another day, though they are on our minds as we write. Can a black or any minority mayor and coalition serve the interests of poor and working-class constituents? Given the postwar prominence of real estate developer-led “growth coalitions” and the relative paucity of independent leverage available to blacks, this is a serious question. 16 Can city planners, given license to think through solutions to this question, sustain the effort over time?
Faced with a muddle, our approach is, first, to lay out the components of the neighborhood industrial retention program in Chicago during and immediately after the Washington mayoralty. What main questions were raised, what practices emerged in the relevant practice in Department of Economic Development (DED) and successor agencies and in community organizations? A second section describes the aftermath—the Richard M. Daley mayoralty, 1989–2011, a twenty-two-year period when, despite an overall change in direction, certain elements of the Washington program survived: what does that say about the institutionalization, even the collective memory for what Mier and Washington attempted?
Neighborhood-based Industrial Strategy
When a group of Chicago activists met in August 1982 to formulate a neighborhood-friendly electoral platform for local economic development—initially aimed at an upcoming gubernatorial elec- tion—they sought key principles for what economic development should mean. Robert Mier, then a professor of city planning at the University of Illinois-Chicago, facilitated the discussion. After hearing much anger at ideas like “enterprise zones” that seemed like giveaways to corporate interests and real estate developers, he distilled a “metaphor”: “jobs, not real estate.” Other metaphors were “balanced growth”—to include not only the Loop as in policy heretofore, but the surrounding neighborhoods; and the principle that services and capital projects should be decided and delivered not only through City Hall but also through neighborhood organizations as well. 17
The city’s history primed them for this approach. Like much of the Midwest, Chicago was a labor stronghold, and it was one that had developed a taste for its own independent thinking and action. It was also home to dozens of neighborhood organizations. They did housing development, as happened in many cities by the 1980s; and also had a foothold in economic development—thus, the Chicago Rehab Network was complemented by the Chicago Association of Neighborhood Development Organizations (CANDO). Organizations on both fronts had moved beyond any dependency on City Hall for palliatives—and on both sides they saw the need for jobs as the key to their own viability.
Job losses were a crisis, particularly in manufacturing. This was a particular problem in the Midwest. In the “East North Central” group of five states including Illinois, the 1979–1986 figures showed a loss of 19.3 percent for manufacturing employment compared to 10.2 percent for the nation. The number was 36 percent for Chicago (from 1979 to 1989). 18 Local elites and many scholars saw these losses resulting mainly from autonomous market forces (the mainstream view). But the Chicago group—which named itself the Chicago Workshop on Economic Development (CWED)—instead saw the problem as biases in local and national policies and from management and ownership failings and prejudices. From that analysis, they sought to fix it: if the problem was institutional, they argued, let’s change the institutions. “Jobs not real estate” quickly connected to “build on the basics”— manufacturing, they thought, could be saved, or at least the losses could be slowed.
That these ideas could emerge in a neighborhood setting had much to do with Chicago’s economic history and with the grass roots organizations that had grown up in the previous decade. What was also remarkable was that these ideas established themselves in the Washington campaign and administration. The elements are told elsewhere, but they included (1) the assignment of the CWED executive director Kari Moe as Washington’s issues advisor in the campaign car, (2) Mier’s role writing and editing key parts of The Washington Papers campaign document, and finally (3) Mier putting himself in position for consideration—successfully—as Washington’s Commissioner of the DED. Mier went into City Hall in the summer of 1983 as Washington began new or altered programs.
City Purchasing, Hiring, and Business Loans
The jobs mandate was not at first centrally organized around factories and manufacturing. Its most tangible and immediate effects were city purchasing and hiring policies established by executive order from the mayor’s office. 19 Other cities—like Atlanta, where Maynard Jackson—who had been that city’s first black mayor and who later visited Washington as an informal advisor—had initiated purchasing mandates. Before 1984, roughly 10 percent of Chicago’s $450 million in annual purchases went to minority-owned firms. Executive order 85-2, in April 1985, required that 25 percent of purchasing go to minority firms and 5 percent to women-owned firms. By the end of 1985, minority purchasing was 29 percent; in 1987, it was 33 percent and 5.6 percent went to women-owned firms. Purchasing from local firms increased from 30 percent to 60 percent between 1983 and 1987, and there was an estimate that an increase to 90 percent by 1991 would create as many as 40,000 net new local jobs.
There were parallel efforts to generate minority hiring. Some of this was attached to specific city contracts, including experiments with “first source” hiring where contractors would agree to look initially at applicants referred by the Mayor’s Office of Employment and Training (MET). Eventually, Washington issued an executive order for first source hiring in 1987 to connect low-income job seekers to city-supported jobs. This was attacked as an effort to create a “patronage army,” but it also was handicapped by employer resistance.
There was also a retargeting of city-controlled loan funds to minority firms. A 1999 article noted “… 62 loans went to minority and women-owned businesses compared to only 11 in the previous administration of Jane Byrne;” and there was an overall improvement in the quality and quantity of city investments: “$40 million of federal UDAG funds leveraged $347 million of private investment.” 20
Evaluations of Washington administration performance tended to focus on these relatively tangible goals, finding uneven results. Wiewel and Rieser, while impressed with the purchasing initiatives, found the personnel and loan programs often ineffective or at variance with the administration’s announced redistributive goals. And it is true that the numbers and dollar figures could be difficult to interpret in a still polarized climate. 21
Building on the Basics: Industrial Retention
What was less disputed was the dramatic effort to change the participatory balance toward the neighborhood organizations. This included contracts not only to provide services like housing upgrades and construction but also—and less remarked—to help create jobs, including through the support and preservation of industrial firms. “Industrial retention” gets no mention at all in many chronicles of the Washington administration. Exceptions are Rast, noted earlier, and Fitzgerald and Green Leigh, who note that
Chicago’s comprehensive industrial retention strategy did not emerge as a totality; rather, it evolved over time. Each program was the brainchild of a new mayor or commissioner… It was only after several years … that the separate programs were linked to form a comprehensive strategy. (p. 106)
With hindsight, one might see two separate strands in the city’s interventions toward manufacturing. One, present early on, was aimed at small factories in the neighborhoods. Perhaps factory owners were not a natural constituency for progressives in the 1980s. They could be on different sides in labor conflicts, and often disengaged from issues in their own neighborhoods. But Robert Mier, now Commissioner of Economic Development, had established relations with some through industrial retention studies he did as a community-involved faculty member at the University of Illinois- Chicago. An early initiative to let contracts to support “early warning” projects resulted in new contacts with small factories in the city’s west side. 22 By the end of the 1990s, political scientist Joel Rast saw the emergence—if not dominance—of a “… jobs-based development strategy supported by a coalition of manufacturers, workers and neighborhood organizations.” 23
Dan Swinney, a labor activist who led one of the early warning projects, put together a staff that surveyed and visited hundreds of small factories, finding that the vast majority, while facing problems, did not need to close if timely interventions could happen. Closings, they found, were often generational issues. Owners, originally from the neighborhood, had moved into the suburbs and, facing retirement, found that their children had no interest in returning—a problem exacerbated by the new racial makeup of these areas. Swinney eventually reconceived the plant closing problem as one of labor supply. By the end of the 1990s, he was focusing not on early warning, but the creation of the Austin Polytechnic High School and on entrepreneurship programs for the city’s now mainly African American west side population. 24
A parallel experience was that of Donna Ducharme, who began contacting small manufacturers in the city’s near North West side in 1982 as director of an outreach program at the New City YMCA (Young Men’s Christian Association) She was looking for ways to secure jobs for at-risk youth in her organization’s neighborhood and found manufacturers who were hampered by encroaching residential and commercial uses. She had studied city planning at the Massachusetts Institute of Technology (MIT) where she conceived the PMD, an innovation in zoning laws that would protect manufacturing zones from encroachments by residential and commercial developments—what zoning doctrine saw as “higher uses.” She then, through the 1980s, circulated in neighborhood organizations and with the manufacturers that were facing problems, building support for the proposed changes. Real estate developers, who would gain by converting factory buildings to residential and commercial uses, stood in opposition. But Ducharme built support, and by the end of the decade had not only gotten the first PMD approved but converted the new mayor, Richard M. Daley to the concept. (For three years, she was Daley’s Deputy Commissioner of Planning for Industrial Development and initiated a series of complementary city initiatives in support of industrial retention). 25
Within City Hall, DED expanded a business visitation program called “Technical Assistance to Business Groups,” and reoriented a set of “delegate agencies.” The new DED team took this set of some thirty-five neighborhood business groups that had been receiving staff attention with little accountability, and divided them into four categories that would be given different support levels and treatment based on periodic evaluation of capabilities. They also singled out a top group that was most concerned with industrial retention (manufacturing) as a Local Industrial Retention Initiative (LIRI), doubled their financing support, and withdrew DED staff, letting the LIRI groups control their own relations with and services to industrial firms. Overall, DED expanded the delegate agencies to over 100 groups, and increased the financial support, from $400,000 to over $3 million. 26 Later, Joan Fitzgerald and Nancey Green Leigh cited the LIRI groups as successful cases of contracting out city functions that could not have been done as well from City Hall. 27
Steel and Task Forces
The other manufacturing strand was steel. Manufacturing job loss was massive, led by the ongoing and impending loss of five large integrated mills in Southeast Chicago. Washington had made a campaign commitment to set up the Task Force on Steel in Southeast Chicago—and Steel was obviously crucial to the jobs goal. Mier and others in DED later reflected on the task force as a device to bridge ideological and experiential chasms: management and labor, neighborhood and City Hall, academics and executives. 28
The barriers were nearly insurmountable in the case of the Steel Task Force. Mier and Washington took several months and extraordinary care in selecting the membership, but some issues were never resolved. A fundamental problem was that the major steel corporations were international in scope and did not see their problems as locally contained. The one steel corporation still headquartered in Chicago, Inland Steel, never agreed to formal membership (though it did finally hold informal talks with task force members later in the process). Overall, DED had more luck with smaller, local manufacturers, the vast majority of firms in any case.
The main success of the steel task force was its contribution to the rationale for industrial retention. This was led by Ann Markusen, who took a leave from an academic position at the University of California at Berkeley to become research director of the DED task force staff, hired in part because of her work on plant closings in California. With DED staff members, she was to establish whether there was a future for steel production in the city. Her 1985 report, in 500 pages of detail, made a persuasive case. Her research supported these conclusions:
Contrary to some opinions, including within the industry, steel manufacturing was not a dying industry. Primary production of steel, which still employed over 7,000 workers in Southeast Chicago in 1983, was connected to a far greater group of suppliers and purchasers including secondary producers of products like machinery and consumer durables—15,000 workers in Southeast Chicago, and also nearly 300,000 workers in the larger region around Chicago. Thus, Steel production, rather than dead, still was an opportunity—to the extent steel jobs could be saved, they would trigger a much larger savings in the larger “steel industrial complex.”
29
The Task Force Saw the Point
The final step in Markusen’s argument was a survey of what might be done. There had been studies of steel production and decline in several different places. Markusen spoke of a typology of responses: (1) “bowing out”—that is, just give up on producing steel; (2) “bidding down” the cost of doing business, particularly labor costs; and (3) “building on the basics.” Markusen, arguing for the third, recommended city support for the maintenance of at least some steel production capacity. The final task force report stressed “the reversibility of technology lag and of an adverse macroeconomic environment” including trade policy, and urged “… the mayor to exert leadership in creating a regional and national political agenda aimed at reversing the harmful effect of macroeconomic policies on basic industry.” 30
In the end, the Task Force did not adopt the most dramatic recommendation suggested by Markusen’s findings: support for financing to keep at least one of the mills open. As she put it, “… it demurred from drawing the analogy between urban renewal, with its strong quasi-governmental development agencies and powers of eminent domain, and industrial renewal.” But in a recent comment, she stressed the positive results:
We made a large argument, inevitably, about the manufacturing economy in general, because some of steel’s problems were machinery and auto industry problems. You cannot imagine how strong the pessimism was in those days, both on the part of workers and communities and on the part of economists and opinion-makers—they just thought steel was dead! Although the industry did retrench a lot in the 1980s, especially in Pittsburgh, Youngstown and other land-locked sites, it was far from fatally ill, and I think we made a big difference in the public case for manufacturing.
31
The R&D Division
Markusen’s research role wound down after 1985, but DED was distinguished in its use of research to illuminate and influence policy questions that faced the city. This reflected the realization that much of the opposition to “progressive” programs was rooted in biases that would not stand up to careful scrutiny. DED repeated the research approach on many fronts, in particular through the creation of a “Research and Development Division” within DED. This unit, managed first by Kari Moe and later by Robert Giloth, supported collaborative initiatives to investigate different subsectors of manufacturing. The Apparel Task Force examined the potential for retaining the few remaining large firms and supporting new designer-oriented firms. The Printing Task Force, convened by the Center for Urban Economic Development (CUED) at the University of Illinois, made business development and education and training recommendations for an industry that was relatively stable. The Research and Development Division led a study of industrial displacement that supported Ducharme’s PMD proposals. The unit supported a number of other research and action projects related to other manufacturers such as electroplaters and automotive suppliers. 32
A lot of the policy and coalition framing for these manufacturing initiatives was provided by the Chicago Works Together plan of 1984 which emphasized jobs and balanced growth. Within this plan, the administration took an important step to institutionalize its collaborative and equity- oriented approach to the manufacturing sector. The 1986 updating of this plan in Chicago Works Together II provides one reflection of the success and future possibilities of this approach.
33
The goals—of jobs, balanced growth, and assisting neighborhoods to develop—remained central and the concept of “build on the basics” became one of eight “development principles” that cut across and informed all development strategies:
Goal 1, Increase Job Opportunities, included Chicago’s Fair Share Agenda; Public Technology for Job Creation…; Labor Force Development; Targeted Business Investments in Support of Job Development; Infrastructure for Job Development; and Joint Problem Solving for Job Creation and Business Retention. Goal 2, Balanced Growth, included the policy Balanced Investments and Benefits that articulated, again, the need for a diverse Chicago economy and balance between downtown and neighborhoods, which included many manufacturing businesses. Goal 3, Assist Neighborhoods to Develop, included the policy for the Preservation of Industrial and Commercial Areas. A second policy under this goal was to Target Resources: Area and Sector—that is, the City of Chicago recognized that “efficiency gains in resource allocation apply to targeting industry sectors.”
A core campaign document for the 1987 reelection campaign reaffirmed several of these priorities. The jobs pledge emphasized new industrial parks, an expanded early warning network for industrial retention, and implementation of industry task force recommendations. The platform called for a more aggressive state and federal policy agenda to support urban revitalization and job development. 34
National Economic Policy
Washington’s key staffers knew they were creating a new function and role of local government related to the economy. But they also realized—or soon came to realize—that some initiatives were risky in the national policy environment of the 1980s, and they sought to change that environment. There were harbingers of diverse policy approaches at the local level in addition to Chicago’s—Markusen’s “bow out, bid down, or build on the basics” typology was certainly empirically based—and there was much discussion of “industrial policy” in the business press and in academic discussion. In early 1984, Walter Mondale thought—briefly—that industrial policy would be the issue that could carry him to victory over Ronald Reagan in the presidential election that fall. 35 Thus, there was at least some reason to use whatever “bully pulpit” Harold Washington had attained to push national policy in supportive directions.
In a retrospective account, Giloth and Mier wrote that national policy should not emanate from the top down, but should take account of local initiatives and situations:
We believe the presidential debates, with their focus on the global economy, have overlooked recent local experiences that contain lessons for a new national strategy. We suggest that distinctive local responses to events of economic restructuring, such as plant closing, show that there are continuing opportunities at the local level to articulate new development ideas and practices, to cultivate new coalition, and to explore new relations between government institutions and social movements.
36
But even a brief review of the course of “industrial policy” is disquieting. With a welter of opposing interests, any sense of national direction is difficult to discern, and policy tends to be subject to simplistic and ideological posing, with one initiative undercutting another. The dominant example is “trade policy,” but defense buildups and bailouts have also been prominent. In the 1970s, the Carter administration was a great disappointment—local initiatives were undercut by large corporations’ access to the administration, and the impression “the Carter Administration had not done its homework.” 37 Later, the Reagan administration undercut the “building on the basics” approach through its own defense buildup, and general hostility to anything that smacked of “planning.”
In this atmosphere, there was little federal capacity to put together a sensible policy. Looking back in 2008, Stephen Alexander, a key city official involved in the steel task force, commented that “we stayed with it for a long time, but in the end the one thing we could not counter was the lack of a national policy.” 38 The Chicago proposals—sensible though they might have been—were a voice in the wilderness. Federal policies that distinguished between sectors, or between cities, were beyond the capacities of the United States in the 1980s. National policy toward manufacturing was both ad hoc and constrained by ideology. There were “bailouts” when large corporations faced bankruptcy (Chrysler, Lockheed), but also a general antipathy to actions that looked as if they undermined “market function.”
Manufacturing, which had peaked at 28 percent of the US labor force in 1959, continued to slide backward. By 1999, it was only 17 percent and in 2008 11.5 percent of the total. Its place had been taken by other kinds of business, most notably that called “FIRE” that is, finance, insurance, and real estate. 39
Postmillennial Echoes
The losses in manufacturing jobs and output, alarming in the 1980s, were cushioned by a series of “fixes” in subsequent years. Housing “bubbles” got attention, but one could also point to war spending and other factors. By the end of the 2000–2010 decade, it might have been obvious that the services economy had reached its limit. Taking office after the financial meltdown of 2008, the new president seemed aware of that. America, he said, needed to “make things” once again. And the federal government started a series of efforts—experimental and constrained, as part of the stimulus package responding to the oncoming recession—at a new industrial policy. 40
Were there parallels with the situation in the 1980s? On one hand, with the 2009 stimulus package there was a new focus on auto bailouts, auto-affected communities, exports, innovation (R&D), new industry development, infrastructure (as support and demand generator, e.g., high speed rail), various interests in training, and education—middle skill jobs. 41 There were interesting initiatives toward sustainable and “green” industry. 42 On the surface, at least some of this was consistent with a “building on the basics” model a bit like Chicago’s.
Still missing were more than isolated hints of idea of “local industrial policy” as it emerged in Chicago and other large cities of the nation—nor was there much capacity to perceive its variety in Washington. Cities, seeing the contraction in federal aid and encouraged to be “entrepreneurial” by federal administrations since at least the beginning of the 1980s, found the best options in real estate development, not industrial retention. So that avenue toward a national policy seemed unlikely.
The Long Half-life of Industrial Retention
Chicago itself offers a poignant example. After his death in 1987, most of the industrial retention strategies initiated under Washington had an aftermath. Interim mayor Eugene Sawyer continued most key department heads. After 1989, the new Daley administration continued or built on at least some others. After well-publicized initial opposition, Daley not only came to support the PMD idea, he appointed its chief advocate, Donna Ducharme, as Deputy Commissioner of Planning for Industrial Development, Ducharme remained in the position for three years and initiated a series of “industrial corridor” studies that led to major infrastructure improvements and organizational linkages among area manufacturers, to mutual benefit.
Locally, few thought Daley’s turnaround was done strictly on the merits. It is a longer story, but what mainly happened was a surge of support for the neighborhood organizations, reflecting years of organizing and a sense of legitimate progress under Washington. Even before Washington’s election, these interests had put up strong opposition to a proposed World’s Fair—ultimately scuttled. This brought notice that the “old guard” downtown elites had, for the first time, been defeated when proposing a major project. Less than a year after Washington’s death, the same old guard interests seemed to have struck again. John McCarron, a Chicago Tribune reporter, published “Chicago On Hold,” a seven-part series attacking various aspects of Washington’s community development and industrial retention efforts. Seeing these articles as a general corporate threat to the continuation of many neighborhood-friendly programs, the McArthur and other foundations supported a Policy Research and Action Group (PRAG) centered on four universities that supplied interns and other research help to neighborhood groups. Neighborhood organizations and associated academics and foundation executives responded with conferences, op-eds, and support for housing initiatives. Daley, facing strong advocacy and not yet completely secure from political attack, found himself playing to both sides. He worked with the LIRI organizations, supported affordable housing demands, and accepted a role for a Neighborhood Capital Budget Review Commission. 43
Ducharme’s efforts on behalf of the city’s industrial areas are described by Joel Rast—a remarkable story. 44 “Industrial Corridor” studies had begun as early as in the Washington administration in the Department of Planning, and Ducharme built on these to put in motion infrastructure improvements and organizational linkages among area manufacturers, to mutual benefit, while complementing the PMDs—a more restricted and controversial list of areas.
As described by Rast, Ducharme’s central innovation was her participatory approach. Soon after her appointment in July 1993, she “… convened a task force to define the ideal features of a viable inner city industrial corridor: including manufacturers, developers, real estate brokers, industrial development organizations, and city planning staff.” 45 The key participants were the LIRI organizations, and they were promised “1–1.5 m to seed implementation within the corridors”—eventually twelve of these were funded by 1997. 46
Rast presents the Greater Southwest Development Corporation plan of 1995 as an example. The plan included a set of priority infrastructure improvements and also a survey of vacant parcels (basic to land use decision making in the corridor). Ducharme also facilitated networking among the participants: the Task Force found workforce training needs, did a survey that found interest in common warehousing and cooperative purchase of raw materials, and found and circulated opportunities for purchasing from local rather than outside suppliers.
Ducharme, in a 2013 interview, had further insights as to the Task Force:
It was a good innovation… The big innovation was the manufacturers typically hadn’t worked together to connect, do plans, relate to the surrounding community. Another reason to work with them was there was no institutional memory at City Hall. The tendency there was to create one’s own program, not build on others. Another [reason] was that manufacturers didn’t get a vote when city council allocated funds for capital improvements—they [council] tended to do residential projects, because residents voted.
47
John McCarron, in an otherwise negative article commenting on Ducharme’s appointment, noted that what she was best at was organizing: “She gets my vote as the most effective community organizer of that decade. Certainly she had the most impact on city economic development policy.” 48 McCarron was attacking Ducharme for “being more interested in stopping developers from accommodating ‘yuppies’ than paying attention to vacant lots and decaying infrastructure,” but Ducharme was in fact organizing manufacturers and affected neighbors to find a voice in the cause of “jobs not real estate” that Mier and Washington’s constituency had identified ten years earlier.
Workforce Development
Industrial retention was not the only economic development theme in the Washington administration. A particularly parallel one was the Chicago First workforce development program initiated under Washington in 1987. It was the attempt to address the match problem of employer needs for suitable labor with the needs—particularly of unemployed youth—for jobs with reasonable career ladders. Greg Schrock’s 2010 dissertation described the evolution from a program dominated by representatives of unemployed workers, to the employer-run Private Industry Councils, to the Sector Center Initiative that finally emerged in 2005, during Daley’s last decade. According to Schrock, the key to success for this independent entity was the development of credibility with employers that this was not to be a welfare program, but also “criticality” in the sense of pushing employers to develop “high road” practices in wage scales and career ladders. 49
Denouement: City Hall Finds Other Options
But much of this ended in 1995. Daley let go his key advisor Valerie Jarrett, and Ducharme followed. The new emphasis in City Hall—led by new advisor Jeff Boyle—focused more on real estate. Postmortems noted the LIRI organizations had let their comfortable relations with City Hall lead them to inattention to their political bases. A leading coalition group, CANDO, went out of existence in 2002, and there were reports of a wholesale shift in power from neighborhood groups. 50
This coincided with a major innovations in how the city was to do physical improvements. As described by Rachel Weber, not only was the new financial instrument—the Tax Increment Finance bond—now to be the device for infrastructure and real estate development within the city (the new “urban renewal”); the city took the lead in selling Tax Increment Financing (TIF) to investors and intermediaries, thus tapping international bond markets and becoming an agent in the development of the finance sector itself, and developing a substantial staffing and clientele infrastructure for it. Weber claims that Chicago was but one example of a national trend at the municipal level. 51
The increased financing capabilities might, in principle, have been directed toward the industrial corridors or the PMDs, and some of it was. Fitzgerald and Leigh report that 15 of over 110 TIF projects were industrial. 52 But the main emphasis had to be for residential and high-end commercial development, because that was the best bet for generating the financing. Apparently, the staff attention to the needs of industrial development lagged after Ducharme’s departure. Rast at least implied that in a 2005 study of PMDs. Rast studied the first PMD established under interim mayor Eugene Sawyer in 1988 and two under Daley in 1990. Two more were established between 1991 and 2000; then eight more in 2004 and 2005 for a total of thirteen.
But Rast had concerns about the later PMDs. The three earliest established ones, he wrote,
… were developed through a broad-based community planning process. As the planning process moved forward, manufacturers gradually came to view the PMDs as their initiative. For several of the companies we interviewed, this sense of ownership remains palpable today. (pp. 24–25)
But this was not the same story in the newer PMDs: While not the focus of his study, Rast found it
hard to imagine that the planning of these PMDs has featured the same degree of community participation as Chicago’s first three PMDs did. The planning of the Clybourn Corridor, Goose Island, and Elston Corridor PMDs each took several years, partly to allow sufficient time to build support among stakeholders.
53
One can infer the transition. In the early 1990s, with a former community organizer-planner like Ducharme in charge, a great deal of time and attention went into the organization of the PMDs and industrial corridors. Later, there seemed to be a change. Jarrett and Ducharme were gone. Others in City Hall—noting the continued loss of manufacturing jobs—were in a position to pitch a renewed emphasis on the upscale residential policy; and with City Hall attention focused on financialization and all the manipulations involved, less time went to the PMDs and to industrial retention generally. More PMDs were established, but they were not as well nurtured. What might have been a managed decline or even growth in manufacturing in Chicago turned into an unmanaged situation. Firms, left to themselves, more often went out of business or left the city.
Rast, writing in the late 1990s, still held out hope for the “local producer” strategy in Chicago. Most likely, he thought, Daley would continue with a modified version of the corporate center approach, mainly investing in the Loop, and adjacent areas of gentrification, while providing for a measure of participation and doling out what was necessary to keep the neighborhoods reasonably content. But Rast also thought City Hall might adopt a dual strategy, continuing to provide infrastructure and logistical support to the inner city small manufacturers. 54 And Daley did in fact continue to create PMDs and provide TIF financing in support into the first millennial decade.
But there was increasingly little mention of industrial TIFs or PMDs in local press or other accounts. By the end of Daley’s mayoralty, it appeared that the corporate center approach was hegemonic, and the main questions were how the city might be managed and how any surpluses would be distributed within that context.
In contrast to the current reality, one could ask whether the city could foster a better developed “politics” of manufacturing. Giloth reflected on one main lesson, looking back in 2011:
55
We often think of the Steel TF, etc. as in the same boat as LIRI, PMDs, etc. In some way it is quite different—Steel dealt with collapse of big industry, big unions, buffeted by global forces. It naturally led to thinking about industry policy in the top-down, national version. This stands in contrast to the more decentralized, small-scale, neighborhood manufacturing work that we did—building unlikely coalitions, etc.—and we got more traction. [It had] the potential for progressive partnerships with business locally and regionally —… For me, this led to some equity potential because of… skilling up of industry, etc. One could develop local/regional training efforts with industry—a commonality that was win/win.
And perhaps the nation would come out of the 2008–2011 recession and budget crises with more of a manufacturing policy. Perhaps small successes would lead to the political space to expand the nation’s current efforts to “rebalance” the economy toward one that not only consumes but also “makes things.” The obvious need was to balance the policy-making community, so that initiative at the top is qualified by awareness of what is going on locally. This was Mier’s proposal in 1993.
Reflections
This is not a happy ending. Industrial retention “had legs” as a policy initiative, lasting several years after Washington’s death. But for the nation, manufacturing employment dropped markedly, and in Chicago, where the sector had been relatively stronger, it dropped at least as fast after 1990. 56 When Daley announced his retirement in 2010, the industrial retention efforts that continued into his mayoralty merited scarcely a mention.
The question now is whether the story can be safely forgotten or is it still useful to the city or nation. To claim the latter, these bear consideration:
Mier and Washington, with many allies and staff support, showed that an economic policy coordinated around manufacturing jobs and neighborhood-level organizations could sustain a concerted effort by a sprawling city administration and varied outside interests. They showed the possibility of a double shift: from city services organized top down to shared with neighborhood-level organizations (the LIRI groups); and from the real estate oriented “corporate center” strategy to the sectorally oriented “local producer coalition.” From practice, they learned principles of economic development, such as the importance of treating the small and medium sized manufacturing firms (SMEs) differently from the multinational firms, whose interests differed. Chicago also showed the differences between what could be accomplished by highly motivated neighborhoods and racial groups as in the early years of the Washington administration, and in the more fragmented and scattered efforts of the later Daley years. In the first case, there was conflict but also a chance to experiment with many more and less successful approaches. Later, some approaches had been more tested, but mayoral support was scattered and episodic. Workforce development policy, begun with the Chicago First program of “first source” hiring under Washington in 1987, evolved to the point where it was pushing employers toward “high road” salary and career ladders while also attaining credibility with manufacturers leery of programs that aimed primarily at employing the unemployed. Ultimately, the industrial retention goal reconnects with the question of national policy, and whether an other than top-down approach can emanate from the nation’s capital. The Chicago history informs that question.
There is another perspective, beyond the concern for local economic development practice and even that of national policy: the evidence from the Chicago planning effort under Washington and its survival into the 1990s, for how planning is to be conceived by its own practitioners and spokespersons. Industrial retention initiatives extended beyond Mier and DED. The opening up of government to citizen participation, once initiated, and taking momentum from the opening up of voting to African Americans and from the segment of the city population who supported open government, went beyond DED to other agencies: certainly planning, but also housing, MET, and human services. And while the LIRI units may have led the way in taking on city functions as “delegate agencies,” the overall participatory atmosphere opened the door to further possibilities.
That the lead in this decentralization occurred with the LIRI organizations and the industrial retention goal further distinguished the Chicago effort. Many other cities established neighborhood units of various kinds, but not for purposes beyond the interests of neighborhood people in their immediate living environments. Community development corporations grew out of many of these neighborhoods, but typically moved in the direction of local real estate ventures. These were often in the interest of low-income people, thus broadening the constituency of planning in a city; but in Chicago, the breadth stretched across industrial sectors.
We can go back to the question of the scope of city planning mentioned earlier. Robert Walker had argued for a planning function “as broad as the scope of local government,” and against its limitation to issues of land use and physical design. John Howard had responded that local planning commissions were functioning well by staying close to the ground, to land use issues and implementation devices like zoning and subdivision controls. More generally, Friedrich Hayek—launching a neoliberal movement that increased in force through the end of the century—attacked the very idea that planning could supplant the invisible hand of the private market, begrudging only small-scale efforts at the local level. By the 1980s, Howard’s view seemed to have won the day, as practicing planners sought protection against political attacks—and Hayek’s argument—by adopting incrementalist theories, specializing in process skills, and allying with private real estate developers, whose access to capital became increasingly important as public funding sources began to fail in the 1970s. 57 Increasingly after the 1980s, little in planning practice reinforced Walker’s view.
The Chicago experience under Washington and Mier—and its aftermath—provides a partial response .The question is not whether there emerged a rooted, thoroughly institutionalized “Local Producer Coalition” before or after the Richard M. Daley mayoralty in Chicago. That did not happen. But did Mier, Ducharme, the LIRI groups, and others involved demonstrate to professionals and constituents the outlines of a local economic development practice that, should the essential political and institutional pieces appear, could be mobilized and operate effectively? To that, we have a stronger case.
What Mier accomplished was the concatenation of several pieces, each of which, however effective, represented learning opportunities and reminders that other pieces also had been in play and, if not immediately implemented, might later reappear. Thus, because it broadened the planning function, the Chicago experience contrasts with the more general practice, and for that it deserves a history.
Footnotes
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.