Monday, September 19, 2011

A look back at Chicago's growth

To get some appreciation of the growth of the Northeast United States in the early 20th century I recommend reading this brief online book The Greatest Highway in the World.  It is a survey of the cities that lie along the New York central line:  New York to Chicago and everything in between.

90 years ago Chicago's rise to prominence could be summarized as follows:

"It is the financial centre of the west and the metropolis of the richest agricultural section in the country. These circumstances have contributed to make it the greatest grain and live stock market in the world. But its accessibility to the raw materials of industrial development has also made it a great manufacturing city. Chicago has more than 10,000 factories and the output of its manufacturing zone is probably more than $3,000,000,000 annually. The principal industries and manufactures are meat packing, foundry and machine shop products, clothing, cars and railway construction, agricultural implements, furniture, and (formerly) malt liquors."

Chicago has been described as being like a snake; periodically it sheds its skin and reinvents itself.  In the 1920s it was a manufacturing power.  Even the agricultural fruits of the Plains were put through the industrial operations of the meat packing plants.  By the 1970s many of the components of Chicago's manufacturing age had dissipated and the city slowly reinvented itself.  It is still in that process of reinventing itself.

A closer examination of these contributions to Chicago's past development shows the structural changes of the region that forced the city to shed its past.  Specifically the commodities that were used as inputs to Chicago's industries have changed.  For starters the agricultural output of the Great Plains has diminished relative to the country overall.

By 2006, the regional distribution of production had shifted substantially. The Central region’s share of U.S. production value decreased to 30.8%, while the Northeast region’s share fell from 9.6% in 1949 to 5.7% in 2006. The big increase was in the Pacific region, whose share roughly doubled over the 57-year period, from 8.3% of U.S. agricultural output value in 1949 to 16.3% of the 2006 total. As shown in Table 1, the output quantity index grew faster in the Pacific, Northern Plains, and Mountain regions than the nation as a whole.

So too has the manufacturing components of the region changed.  The iron ore, a crucial component of 20th century manufacturing, was primarily mined from the nearby Lake Superior region.  However the output of this region has declined since the publication of the Greatest Highway in the World.

During the twentieth century, high grade ore, originally so plentiful on all three iron ranges, became less available and less profitable to mine. The cost of underground mining became more prohibitive, and the owners of Michigan's mines began to search for other methods of tapping the iron riches of Lake Superior. Many of the mining operations, such as the Lake Superior Iron Company, were absorbed by larger corporations. Between World War I and World War 11, the total tonnage of iron ore shipped fluctuated drastically: in 1920, Michigan shipped over eighteen million tons of ore. In 1921, 1931, 1932, 1933, and 1934 Michigan shipped less than half that amount. 

Since 1920 the Midwest declined in agriculture and iron production.  And since 1920 Chicago has declined in manufacturing these raw materials into finished goods.  These changes can be seen in the face of the city itself, in good and bad ways.  From re-purposing manufacturing sites into condos to blight and empty fields, the face of the city has changed.

Of course this isn't unique to Chicago.  At the opposite end of the Greatest Highway in the World, New York City also saw manufacturing decline.

As John Gunther wrote in his 1947 best-seller, Inside U.S.A., New York City was "incomparably the greatest manufacturing town on earth." In 1947 over thirty-seven thousand city establishments engaged in manufacturing, employing nearly three-quarters of a million production and 200,000 non-production workers.

Today there are 233,000 manufacturing jobs in more than 10,000 New York City industrial businesses.  Quite a decline from the almost 1 million of 1947.

New York had been a major manufacturing center since the earliest days of the republic. In 1950, 28 percent of the city's employed workers were in manufacturing, two points above the national figure. The percentage of the city workforce employed in manufacturing had been declining since 1910, when it had peaked at just over 40 percent. However, except during the 1930s, the actual number of manufacturing workers in the city had risen each decade of the century. When World War II ended, New York manufacturing was at an all-time high.

In 1947, New York had more manufacturing jobs than Philadelphia, Detroit, Los Angeles, and Boston put together.

It isn't surprising then that Chicago is, in some ways, following New York's path in how it reinvents itself.

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