Feeling distressed? So is 42 percent of Chicago - Metropolitan Planning Council

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Feeling distressed? So is 42 percent of Chicago

Economic Innovation Group

Economic Innovation Group's Economic Distress Index

Feeling distressed? According to a report released last week by the Economic Innovation Group, 42 percent of your fellow Chicagoans are too. That's enough to make Chicago the nation's eighth most distressed big city, following Detroit, Memphis, Milwaukee, Atlanta, Baltimore, Fresno and Las Vegas.

The Distressed Communities Index used seven criteria to assess economic well-being:

  1. Educational Attainment: Percent of population 25 years and over with a high school degree
  2. Housing Vacancy Rate: Percent of habitable housing that is unoccupied
  3. Unemployment Rate: Share of the labor force that is unemployed
  4. Poverty Level: Percent of population living under the poverty line
  5. Median Income Ratio: Ratio of the zip code’s median income to the state’s median income
  6. Change In Employment: Percent change in the number of individuals employed
  7. Change in Business Establishments: Percent change in the number of businesses

While more than 22 percent of Chicago's residents are under the poverty line, the EIG study found that nearly twice that amount—42 percent—live in distressed zip codes, compared to 94 percent in #1 Detroit and 38 percent in #10 Houston. This finding fits with a trend I've written about before, that according to a University of Illinois’ Voorhees Center December 2014 report, the number of Chicago neighborhoods with a low and very low socioeconomic status has grown from 29 community areas in 1970 to 45 community areas in 2010.

It's worth restating that such concentrations of people in distress also negatively impact those living outside those concentrations. A 2014 study on intergenerational mobility found that racial and income segregation highly correlate with mobility; the more segregated the region, the less likely children living there will be upwardly mobile no matter their race or ethnicity.

It's also worth noting another recent list on which Chicago ranked third: cities with isolated wealth.  Research from the University of Minnesota defines racially concentrated areas of affluence as census tracts where 90 percent or more of the population is white and the median income is at least four times the federal poverty level, adjusted for the cost of living in each city. With 58 of these racially concentrated areas of wealth, Chicago ranks third behind Boston (77) and Philadelphia (70), while the sample average was 32.

So while Chicago has substantial areas of wealth and in 2014 was second only to New York on the list of America's fastest-growing private companies, a significant portion of its population lives in distress. These two realities are uneasy bedfellows under the roof of one city, and the gap between them is growing. What to do? Over the next several months, my colleagues and I at MPC will be examining where Chicago falls on a range of criteria, including and beyond those covered in the Distressed Communities Index to get at action steps. In the meantime, let us know what you think needs to happen.

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