Collaborative Public Management: New Strategies for Local Governments

Appendix: B. Economic Characteristics of the Sample Cities

APPENDIX B ECONOMIC CHARACTERISTICS OF THE SAMPLE CITIES T he sample cities that are located in the five states of the East North Central (ENC) Census subregion have experienced geographical and structural shifts in their economic base during the past several decades that figure prominently in the strategic direction of their development activity. What Eisinger calls the ‘‘decentralization of people and industry’’ describes the drastic shift since 1950 in population and jobs from the states located in the Northeast and Midwest Census Regions of the country to states in the South and West (1988, 55). Three of the sample states— Illinois, Michigan, and Ohio—experienced a net loss of persons from 1950 to 1995. The distribution of jobs throughout the country from 1970 to 1994 also shifted decidedly away from the East and Midwest sections of the country—including the sample region— toward the South and West (see table B.1). In 1970, the five sample states possessed nearly 21 percent of all nonfarm jobs in the United States, the most of any subregion, but by 1994 just 17.4 percent of all U.S. jobs were located in these states. During this period, the sample states experienced the second lowest job growth of the nine subregions (36.3 percent), a rate lower then the national mean growth rate and much lower than that in most South and West subregions . Economic restructuring—the systematic shift in the distribution of jobs across industrial sectors—has also occurred over time in the sample cities. The vast bulk of the net job growth in the sample cities from 1970 to 1990 can be attributed to the service and finance sectors of the economy (see table B.2). Controlling for the rate of change in total employment during the same period, these were the only two sectors that saw jobs being created at a rate substantially greater than the overall rate of growth. Sample cities experienced a 50 percent loss in the number of manufacturing jobs 200 Appendix B / 201 Table B.1. Historical Employment Distribution in Nine Census Subregions Percentage of U. S. Nonfarm Employment Percentage of Job Growth Subregion 1970 1980 1994 1970–94 Relative Index Northeast 6.4 6.0 5.4 37.0 60.2 Mid-Atlantic 20.0 16.5 14.5 17.0 27.7 East North Central 20.6 18.5 17.4 36.3 59.1 West North Central 7.6 7.6 7.6 62.8 102.1 South Atlantic 14.8 16.1 18.3 99.4 161.7 East South Central 5.4 5.7 6.0 78.5 127.7 West South Central 8.5 10.3 10.3 96.7 157.4 Mountain 3.8 4.9 5.9 153.3 249.4 Pacific 13.0 14.4 14.6 80.9 131.7 United States 100.0 100.0 100.0 61.5 100.0 over and above the total job loss in these cities, and suburban cities lost manufacturing jobs at a rate much greater than central cities (65 percent loss in small suburbs, 75 percent loss in large suburbs, and approximately 27 percent loss in central cities). However, compared with central cities, suburbs experienced nearly three times as much employment gain in the finance sector and more than twelve times as much growth in the services sector. Because the industrial sectors of manufacturing, finance, and services account for approximately two-thirds of all sample city employment, the significant differences between suburbs and the other cities are notable. The cyclical shifts and fundamental changes in both the condition and overall structure of the Midwestern economy are extremely important for understanding the policy context of these sample cities. As a result of these changes, the states and their cities have become extremely active in pursuing economic growth through the development of innovative products and state-of-theart manufacturing technologies. The 1994 State Policy Index compiled by the Corporation for Enterprise Development ranked all five sample states in the top eleven in terms of the quality and quantity of the state’s overall development policy strategy. All of the states ranked in the top five in at least one subindex, with the subregion showing particular strength in the Technology and Innovation and Local Economic Development Assistance subindexes. Whereas 202 / Appendix B Table B.2. Mean Net Sectoral Employment Change by City Type, 1970–90 Industrial Sector All NM SS...