Inequality Is Inefficiency

The fundamental reason why American cities -- all of them -- underperform.

Source: gettyimages.com

I’m an urbanist. If you’re reading this, you probably are one too. You, like me, want to make cities better places. That’s at the absolute core of being an urbanist.

How we make them better places is where differences surface. And I guess it depends on what each one of us wants from a city. If you want to eradicate homelessness or have more housing options that are affordable and offer more choices than single family homes, you’ll want dense, walkable neighborhoods. If you want to reduce auto dependence because of its impact on climate change, you’ll advocate for efficient public transit, or the spread of multimodal path systems for biking and pedestrian use.

Simple. That’s the state of urbanism now.

I follow Canadian planner and urbanist Brent Toderian on X. Toderian was at one time the chief planner for Vancouver, BC, one of the great North American cities. Toderian is a huge proponent of building up cities to promote environmental sustainability. He is also, as his consulting website says, a “passionate practitioner and advocate for creative, vibrant city-building.” Last month he started a thread with this:

My take on urbanism, however, has always been a little different. If contemporary urbanists viewed cities as systems that individuals can modify to improve their quality of life, I saw them fundamentally as economic systems created by societies to generate and distribute wealth.

Considering where I grew up (Detroit), when I did (1970s and ‘80s), and how I did (in a rapidly resegregating environment that saw white residents essentially abandoning the city between 1970 and 1980, and witnessing the economic base leave with them), I saw a city that was struggling to  distribute wealth. Wealth was still being generated, perhaps not like it once was. However, the distribution function was warped. I viewed cities as the greatest economic accelerator for humans, warts and all. I viewed my people, Black people, as being on the cusp of advancing our economic opportunity, and watching it slip away.

That led to my three-word entry: “Inequality is inefficiency.”

Black-white economic, spatial and social segregation is keeping our cities from reaching their peak performance.

This is especially true in the manufacturing Midwest that we call the Rust Belt. Detroit, and other cities across the nation but especially in the Midwest, dealt with the decline in manufacturing while there was a concurrent rapid rise in Black population growth. When paired with the Civil Rights Movement, the expectations Blacks had at the movement’s peak, and the rise of social and economic segregation in its wake, you realize cities haven’t always been operating at their best for all people.

Some readers here might say they live in a diverse city and therefore don’t have issues related to segregation. There are others who might say they live in a city with a large Black population that’s still a strong economic performer. That’s wrong on both fronts. There are cities that have lower Black populations (i.e., Denver, Las Vegas, Phoenix, San Diego and Seattle) whose economic performance has been only slightly impacted by existing segregation. There are cities that have higher Black populations and strong economies (Atlanta, Washington, DC) that would be doing far better if their inequality issues were truly addressed.

Put another way. When your economic future is more certain, you’re not always thinking about who’s potentially missing out, and how to reach them. You can focus on the quality-of-life issues that matter to you, and make cities more livable, even more enjoyable. You can welcome others to your world as they attain your economic and social status.

If you have a secure economic present and future, it’s easy to advocate for improvements that make your world, and indeed the entire world, a better place to live. But if your economic future is less certain, livability and environmental sustainability don’t mean quite as much. Walkability means much less to someone who’s livelihood strangely depends on it.

If you’ve been reading this page recently, you’ll notice I’ve talked quite a bit about Chicago’s segregation lately. I talked about it as it relates to the potential impact of a 2016 Olympics on Chicago's South Side, but also its role as an inhibitor to dramatically reducing the city’s violent crime rate. But Chicago and Detroit are not unique. Take a look at any list or map of the nation’s most segregated cities or metro areas, the Midwest figures prominently. Historic manufacturing centers like Chicago, Cleveland, Detroit, Milwaukee and St. Louis are usually in the top ten of anyone’s most segregated cities list. Cities that saw their growth phase take place later than the manufacturing centers, like Columbus and Indianapolis, are often found as well. Midwest-adjacent cities like Buffalo and Pittsburgh are usually found on such lists. And East Coast cities with Rust Belt-like economies and demographics, like Baltimore, Newark and Philadelphia, are often found there, too.

Why? An opinion piece in Crain’s Chicago Business published in May, called Race is the Midwest's economic Achilles' Heel, nails the reason. It’s paywalled, so here’s where I briefly quote the money piece:

“(T)he industrial cities of the North have long been hamstrung economically by the most intense racial divides in the country. Thes northern industrial communities were once a destination of hope and opportunity. The early 20^th century saw the Great Migration of Black and white laborers from the South and Appalachia flocking to the Midwest’s mills, factories and machine shops and the decent jobs they provided. This migration threw races together in Northern cities. But rather than a happy melting pot, white Northern community leaders aggressively worked to keep the races apart. Those cities soon enabled and encouraged the flight of white residents (and their businesses, jobs and wealth) to the suburbs, while strict discriminatory housing and educational policies kept Black residents confined in increasingly segregated communities.

The result is, the region boasts the nation’s most racially and economically balkanized metropolitan communities.”

I’d add a couple of finer points to this. Northern segregation began while the modern American suburb began to emerge, and the real estate industry was willing to indulge in suburban expansion. In addition, there was a correlation between the proportion of Blacks that migrated to certain Northern cities, and the eventual strength and depth of the segregation patterns. For example, New York City and Boston are also often found on “most segregated’ lists. But with lower overall Black populations, their segregation is less observable. In Boston’s case, it has a substantially lower Black population at the metro level than either Chicago or Detroit. In 2022 the U.S. Census reported that 7.4% of Boston’s metro population was Black, compared to Chicago’s 15.8% and Detroit’s 21.4%. At the metro level, New York’s Black population actually equals the 15.8% seen in Chicago. However, I’d argue that Blacks in metro NYC live in segregated communities but are far more dispersed across the region than in Chicago (well, that’s my early best guess).

Twice this century I’ve seen significant reports that address Chicago’s inequality, and its economic and social impact. The first was the Tri-State Chicago Metropolitan Area Territorial Review, published by the Organisation for Economic Co-operation and Development (OECD) in 2012. The second was the report jointly produced in 2017 by the Washington, DC think tank the Urban Institute and Chicago’s Metropolitan Planning Council entitled The Cost of Segregation.

Both reports acknowledge Chicago’s deep legacy of segregation and its impacts on economic development. OECD does so somewhat obliquely, within the context of Chicago’s aspirations to attain true global city status. The Urban Institute/MPC report addresses the issue far more bluntly. I’ll write more on both reports in the coming days and weeks.