Diversified Job Base Is Key To Chicago Business Vigor

SPRAWLING amid 40-story skyscrapers, a vast vacant lot known ignominiously as "Block 37" is hogging Chicago's spotlight. That's because Sears, Roebuck & Co. is thinking of building a store there.

Boosters hail the vision of a Sears store in central Chicago as a symbol of the downtown's reinvigoration, even though Sears executives say the prospect is tentative at best. But deliberations alone underscore how the city, unlike many older industrial cities, has managed to sustain its downtown as a vibrant economic hub.

As the centers of many American cities lost jobs from 1979 to 1990, Chicago's central business district enjoyed 10 percent employment growth, according to the Illinois Department of Employment Security. But the district has yet to fully recover from the last recession: The number of jobs fell by 6.2 percent from 1991 to 1994.

The solid job base in downtown Chicago affirms the importance for cities of maintaining a diversified economy, experts on urban economy say. Compared with other Midwestern cities, Chicago has not tied itself to one or a few economic sectors, but has kept a footing in retail, insurance, manufacturing, and finance, as well as services - the mainstay of the national economy. When one sector slumps, the others help sustain the entire economy, the experts explain.

Unlike industrial Milwaukee, Cleveland, and Buffalo, N.Y., Chicago has also lured and retained businesses and residents by carefully cultivating vast lake-front parks, says Siim Soot, an urban geographer at the University of Illinois at Chicago. "We have gotten where we are not by any kind of recent magic, but by providing a very livable atmosphere close to the downtown area," he says.

Because of its healthy core, Chicago has suffered less than other central cities from the exodus of jobs to suburbs and "edge cities." An edge city, described in a book of the same name by Joel Garreau, has at least 5 million square feet of leasable office space, 600,000 square feet of leasable retail space, and more jobs than bedrooms. It is popularly perceived as a distinct place and was largely undeveloped 30 years ago, according to Mr. Garreau.

An edge city is widely viewed as a bane for officials and residents of older cities. The growth of peripheral cities often hastens economic decline, tax-base erosion, and class inequality within the adjoining older city, the experts say.

Chicago confronts these forces because of the rise of edge cities like Schaumburg and Naperville. Most conspicuously, it has lost more than 800,000 residents since 1950. "The most significant trend in this region has been population redistribution and, of course, the winners are the farthest out communities, and the losers are the ones closest in" to Chicago, says Richard Greene, a geography professor at Northern Illinois University in DeKalb.

In perhaps the clearest sign of outward sprawl, the amount of land consumed by the regional population grew 46 percent from 1970 to 1990, while the population rose just 4 percent, reports the Northeast Illinois Planning Commission.

Still, the downtown held its own even as the city saw a 4.7 percent drop in jobs in the last decade, according to a study on Chicago-area population and employment co-authored by Mr. Greene.

Central Chicago helps power the region's economy. The four-square-mile central area employs 542,000 people - a figure exceeding "the combined total of those employed in the six other major employment hubs in the region," reports a regional employment and commutation study by Mr. Soot.

By serving as a hub for finance and other sectors, Chicago exemplifies how an older city center can play a key role by binding companies and communities at its periphery. But the downtown can't count on holding on to such a high proportion of the region's jobs indefinitely, experts say.

Housing, mall, and office construction keeps spreading away from Chicago, pushing jobs further out and making the commute more onerous.

Suburban residents, especially a household's second wage earner, are more likely to accept jobs at edge-city offices. Their appeal could undermine Chicago's employment, Greene says.

But Soot believes central Chicago's job base won't shrink, because Chicago is an aesthetically appealing place to work and features a diversity of good jobs, a broad transportation system, and several nearby educational institutions. Instead, the downtown will probably see its proportion of regional employment decline as outlying areas continue to grow quickly, Soot says.

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