A Brookings Institution report ranks Chicago 203rd out of 300 metropolitan areas around the world in bouncing back from recession. Just how concerned should we be? Joining us are Edward Stuart, economics professor emeritus at Northeastern Illinois University, Brian Battle, director at Performance Trust Capital Partners, and Alan Knuckman, a market strategist at Barchart.
Read an interview with Joseph Parilla, who’s one of the authors of the Brookings Institution report.
Why are the two economic indicators -- annualized growth rate of real GDP per capita and annualized growth rate of employment -- used as measurements?
We chose those two because employment growth, we think, reflects the importance people and policymakers attach to cities being able to have a widespread labor market. Employment growth is an indicator of whether the labor market is healthy or not.
GDP represents the importance of achieving rising incomes and standards of living in a place. The fact that those two indicators are available over a wide range of global metro areas gives us a good snapshot of economic performance.
Chicago ranked 203rd out of 300 global metro areas. How does the city compare in terms of improvement year over year to other metro areas of similar size?
Looking at it in terms of U.S. peers, which are not all similar sizes but are similar in terms of development state, 80 U.S. metro areas are in the sample. And Chicago came in 51st out of 80. But if you look across and look at similar size in terms of economic clout, [the report] had Los Angeles at 148th and New York at 176th. They’re slightly higher than Chicago. The large metro areas of Texas—Dallas and Houston—performed very well.
How does Chicago compare regionally to other Midwestern cities?
We don’t have a specific metric that looks at that, but this year it has performed lower than Milwaukee which was 136th, and better than St. Louis and Detroit.
Were those results expected?
I don’t know if it was expected. When you compare Chicago to Milwaukee and broaden it beyond the one-year trend which we did, Milwaukee has performed worse than Chicago in the post-recession period. Part of the fact that Milwaukee did better this year is because it is catching up from lower performances in previous years, whereas Chicago has been growing steadily since the recession but not at an overwhelmingly fast clip.
In terms of Chicago’s ranking, what should people take away from this?
Because [Chicago’s] already relatively wealthy and already very large, in order for it to grow from that base, it becomes even more difficult. A lot of cities on the list that were on top were developing countries, like China and Turkey, starting from lower development stages so there’s more growth potential.
For an advanced city, it becomes important for a city to invest in things that make the economy stronger, like education, job training, universities, research and development, and technological innovation. Infrastructure is also important, so firms that are trying to move goods to other markets can do so efficiently, and so people can move around the region and access jobs.
There’s no magic bullet to improve Chicago’s economy. It’s a combination of all those things. The ultimate goal is continued economic growth that includes the vast majority of the population so everyone can participate in whatever fruits the regional economy bears.
Is there anything you’d like to add?
In terms of how to interpret the study, it’s not a measure of the best cities or the most livable cities or the most economically competitive cities. These are [cities] that are growing the fastest this year and in the post-recession period. Use this information as another tool to inform decision-making. The report is measuring a pretty specific part of the economy.
Interview has been condensed and edited.