Changing Urban Political Economy: USA

1. Changing Urban Political Economy: USA

2. CHANGING ECONOMIC CLIMATE OF URBAN AMERICA • Shift from industrial to post-industrial economy • Industrial based economy predominated until early 1980’s • Shift to service/high-tech economy • Manunfacturing still important – but: • Sunrise industries • Sunset industries

3. Where are Jobs being lost ? • Job loss occurring in the northern industrial (Rust) belt • Stretches from Hudson River to Mississippi River • Job loss also occurring in central city

4. Where are the new jobs being created? • Population shift to Southern tier • Rise of the Sun Belt cities • Atlanta • Houston • Los Angeles

5. Globalization and the Rise of Global City • Globalization • Industry • Finance • Globalization of United States cities • Cities now divided into tiers based on role in global economy • First tier (London, New York, Tokyo) • Second tier (Chicago, Los Angeles, Paris, Zurich, Brussels, Singapore, Washington D.C.

6. Global Cities

7. Interconnectedness • Key point: virtually all U.S. cities are linked in one fashion or another to global economy

8. Impact of Globalization on U.S. Cities • Positive: • greater variety of imported goods and services • American exports open to larger world markets • Cities housing export-oriented companies grow

9. Impact of Globalization on U.S. Cities • Negative • Many communities/companies poorly prepared to compete • Difficulties competing with cheap labor overseas

10. Paradox: Inequality/Poverty • Greater Inequality • Middle class shrinking • Between 1967 & 1998 middle-class share of income in the United States declined from 52% to 47%

11. Paradox: Inequality/Poverty • Less Poverty • 1990’s reduced poverty to 11.3% • African-Americans and Hispanics remain disproportionately “in poverty” (21%) Working class neighborhood Los Angeles

12. CHANGING NATIONAL ECONOMY: Impact on the CITY as a Place of Opportunity • Trends of 1980’s/1990’s have diminished ability of cities to perform historical roles as places of opportunity for the poor • Jobs migrated from inner city to suburbs • Jobs migrated to South • Jobs migrated overseas

13. Especially in Northeast and Mid-West • Inner-city ghettos have become holding pens for a desperate urban underclass

14. The New Underclass • Most adults in inner-city ghettos do not work • Structural explanation – work has disappeared • Lack of opportunities has intensified drug problems • Ghetto neighborhoods are spreading

15. The BIPOLAR CITY • Underclass and immigrants don’t have skills needed for advanced technical economy • Small elite of upper-income professionals work in high-rise downtown office buildings

16. Is an Urban Renaissance in the Making ? Gentrification: San Francisco Consumer Oriented Projects - Inner Harbor Baltimore

17. URBAN ECONOMIC DEVELOPMENT STRATEGIES I. • Redesign of urban landscape • Many buildings in central city boarded up/abandoned with migration to suburbs • Redeveloping these areas is the challenge – but is the cost too great? Detroit: Urban Decay persists

18. URBAN ECONOMIC DEVELOPMENT STRATEGIES II. • Cities engage in economic development plans • Economic incentives to attract businesses • Competition among cities fierce

19. INCENTIVES FOR ECONOMIC DEVELOPMENT • Urban Enterprise zones • Taxes and government regulations reduced in blighted neighborhoods • Financial incentives • Forgiving property taxes • Industrial Development Revenue Bonds help companies raise money at lower cost • Venture capital • State investment in promising start-up ventures

20. When all is said and done • business are attracted to states and cities with low average wages, weak unions and low unemployment and worker compensation benefits

21. CHANGE AND BIAS IN THE URBAN POLITICAL ECONOMY • Major changein urban political economy is solidification of the central-city mayor’s role as a promoter of public private partnership that seeks to: • Increase economic activity in urban areas • Improve city’s fiscal base

22. Consequences of biases that permeate new urban political economy • Urban redevelopment projects have had a bias toward the middle class and private sector • Redevelopment tools seldom used to help the poor • San Diego Inner Harbor

23. Dilemmas for Urban Governments as they Seek to Raise Revenue • Cities that raise too much money for redistributive services for needy residents will drive middle class residents to less redistributive oriented suburbs • Should mayors and city councils leave redistributive activity to the federal government and the states?