Chicago on the Make

by Andrew J. Diamond

  This infusion of capital helped to offset the loss of about 100,000 jobs in the manufacturing sector between 1986 and 2000, and a good number of the new service jobs created went to the residents of the working-class black and Latino communities most affected by the forces of deindustrialization.62 This was a process that Daley’s school reform program promoted through its creation of several Education-to-Career Academies (ETCs), vocational high schools offering nonacademic concentrations in key areas of the tourist services sector such as secretarial sciences and hospitality management. Such structures of employment opportunity warn against taking too far the idea of an impenetrable barrier between the downtown business district and the other Chicago where low-income blacks and Latinos live. Every morning, thousands of people from these communities commuted into the Loop and its surrounding areas to work in office buildings, restaurants, hotels, bars, cafés, retail stores, and a range of tourist venues. To be sure, the service jobs they performed, on average, paid much less than the manufacturing jobs they replaced; a study commissioned by the U.S. Department of Labor in 2001, for example, found that while the average annual salary for Cook County manufacturing workers was $40,840, service-sector workers took home a significantly lower $32,251, and retail workers earned just $17,045.63 But these jobs helped to stave off the worst in the other Chicago, extending lifelines into Latino and black communities facing 20 percent unemployment rates. The political stability prevailing in Chicago between 1989 and 2006 would have been unthinkable without the fantastic growth in tourist and business-traveler spending, which dipped sharply after the World Trade Center attacks of September 11, 2001 but then quickly rebounded after 2002.

  In addition, at least some of the billions of dollars that City Hall poured into its infrastructural projects in the late 1990s and early years of the twenty-first century found its way into black and Latino communities—another reason why Daley’s electoral coalition held together so well. While African Americans and Latinos never received their rightful shares of city business, Daley was careful to spread just enough patronage into these communities to preempt charges of racism. During his first decade in office, for example, blacks, who constituted around 36 percent of the population and 40 percent of the city council membership, represented about 33 percent of the municipal labor force, and black-owned companies secured between 10 and 12 percent of city contracts. Latinos, by comparison, who constituted 28 percent of the population but held just 11 percent of the city’s jobs and procured 14 percent of its contracts, seemed to have fared rather poorly. But these numbers represented enormous gains from the Harold Washington years, when they procured a mere 4 percent of city contracts and 5 percent of city jobs.64 And when complaints about such arrangements arose, as they did especially in some quarters of black Chicago, those responding to them were likely to be high-ranking blacks and Latinos within Daley’s cabinet.

  Political scientist Larry Bennett has argued that one of the main pillars of Daley’s approach to governance was “elite social inclusivity.”65 Unlike his father, for whom, in the oft-quoted words of his press secretary Frank Sullivan, “affirmative action was nine Irishmen and a Swede,” Richard M. Daley was the first white mayor in Chicago to appoint significant numbers of blacks, Latinos, and Asians to high-profile positions in his administration. This was an objective the mayor had pursued since his first days in office, when the Chicago Tribune declared a “rainbow cabinet” had been installed in City Hall.66 By 2006, Daley’s cabinet contained seven African Americans (17 percent), 24 whites (59 percent), 7 Latinos (17 percent) and 3 Asians (7 percent), with blacks and Latinos compensating for their relative underrepresentation by their presence in some highly visible posts. Daley’s public relations savvy dictated that minority appointments be deployed strategically to those areas of city government most liable to come under public criticism from minority groups. His appointees for president of the Chicago Board of Education, for example, were always black or Latino, as were his human resources (or personnel) commissioners, and an African American served as his press secretary—the all-important face of his public relations apparatus—throughout Daley’s twenty-two years in office.

  What was being so brilliantly accomplished in all this—in the ward-level distribution of TIF funds for the benefit of local political leaders and business elites, in the parceling out of a quarter of the city’s contracts to minority-owned business, in the maintenance of appropriate levels of minority employment in the city’s workforce, and in the appointment of enough high-level minority officials to give blacks, Latinos, and even Asians the feeling of political representation—was what historian Michael Katz has termed “the management of marginalization.”67 Katz invokes the idea to help explain why U.S. cities witnessed relatively few outbreaks of collective “civil violence” between the 1970s and the first decade of the twenty-first century. He argues that in an American urban landscape in which the geographical boundaries of race were no longer being challenged—as they were during the Second Great Migration of African Americans from the 1940s through the 1970s—municipalities managed to dampen political opposition by “selectively incorporating” middling segments of economically marginalized communities with financial rewards and limited political powers while criminalizing and controlling the unincorporated.

  Critical to this story of incorporation was the role played by minority elites claiming to represent group interests while brokering policies that were actually detrimental to lower-income members of their communities.68 Mary Pattillo’s penetrating study of the South Side North Kenwood–Oakland neighborhood in the 1990s has powerfully shown that a key dimension of the process of incorporation in Chicago was City Hall’s deployment of a range of neoliberal policies—for example, the conversion of truly “public” high schools into selective “college prep” schools—to help promote gentrification.69 The availability of high-quality educational opportunities was essential for attracting black middle-class professionals to the area and thereby boosting property values (as well as property tax revenues). Pattillo’s work highights how effective the Daley administration was at buying out the support of middle-class homeowners in black and Latino communities by convincing them that he was committed to “improving” their neighborhoods and raising their property values—whether through policing methods better adapted to community needs made possible by the CAPS program, beautification and infrastructural improvements underwritten with TIF funds, the creation of specialized charter and prep schools, or the demolition of crime-infested public housing projects that tainted the image of the neighborhood.

  But there was more to the story than this. There was also a dimension that extended far beyond the city limits and that greatly surpassed City Hall’s powers of persuasion. In accounting for the depoliticization of black and Latino communities, it is of course also necessary to consider how patterns of overactive consumption made possible by easy credit tended to mask growing inequalities. Blacks and Latinos with much lower incomes than middle-class whites were able to acquire some of the same class-status symbols—from Timberland boots to Ralph Lauren shirts to flat-screen televisions and video games—a situation that ended up sucking capital out of working-class minority neighborhoods. Credit card debt across the country, Katz reminds us, nearly tripled between 1999 and 2005, when some 84 percent of African American cardholders were carrying a balance (compared with 50 percent of whites).70

  And then there was the frenzied consumption around professional sports, which in Chicago was especially pronounced at precisely the same time that Daley was restructuring the city’s economy. The Chicago Bulls won an astounding six NBA championships between 1991 and 1998 behind the magical play of superstar Michael Jordan, and while we will never have a way to truly make sense of the political implications of this, it is realistic to think that the “hoop dreams” of a generation of young Chicagoans, not unlike the gangster dreams of rap videos, deflected attention from the injustices of the here and now.71 As one sociological study o
f the impact of basketball on poor black youths has demonstrated, many teens clung desperately to the illusion that basketball could transport them out of the ghetto when the reality was that even winning a college scholarship was highly improbable.72 Like the other narratives of personal failure circulating through black ghetto neighborhoods at the time—failure in school, failure to advance in the service-sector labor market, failure to climb the ranks of the gang hierarchy—the shattered dreams of basketball glory mostly left individuals blaming themselves rather than the surrounding conditions that made a long shot seem like the best option.

  And yet ultimately what made Daley’s machine function so smoothly, despite the glaring inequalities it exacerbated, was the economic prosperity that surrounded it and the flow of cash that lubricated its gears. Between 1989 and 2007, the year the subprime mortgage crisis caused the housing market to collapse nationwide, the United States experienced only two relatively minor and short-lived recessions—one between July 1990 and March 1991 and the other between March and November 2001. With the economy of tourism booming, real estate values surging upward, and the stock indexes rising, there was enough capital flowing into the city to make the system work. Moreover, Chicago’s economy, labor market, and neighborhoods reaped enormous benefits from the massive wave of Mexican immigration in the 1990s, when Chicago’s Mexican population increased by 50 percent and the number of Mexicans residing in Cook County jumped nearly 70 percent. Chicago managed to avoid the Rust Belt story of urban crisis in large part because Mexicans and other immigrants regenerated and repopulated some of its distressed neighborhoods, working service jobs, opening up businesses where boarded-up storefronts had once been, renting and buying apartments, and spending their hard-earned dollars in the local economy. A case in point was South Lawndale’s Little Village neighborhood, whose population jumped from 62,821 in 1970 to 91,071 in 2000, with some 83 percent of the area’s residents of “Hispanic” descent by 2010.73

  But Chicago became a different place when faced with budget deficits in the hundreds of millions. Campaigning in the fall of 2006, Daley predicted a moderate $65 million shortfall for the fiscal year 2008, but after his election, with real estate values crashing, the actual figure came to $217 million, and the following year it rose to $470 million and then to $520 million in fiscal year 2010, when the mayor shocked everyone with the announcement that he would not be seeking a sixth full term. Daley seemed to have read the writing on the wall back in 2005, when he launched an aggressive privatization program to auction off some of the city’s major assets for short-term gains. Although Chicago was following New York’s lead in making cash grants to high-profile corporations to advance its global agenda, it was clearly leading the way in using privatization schemes to raise capital. In 2005 City Hall signed a ninety-nine-year lease that gave the toll revenues of the Chicago Skyway to the Skyway Concession Company in exchange for $1.83 billion. The next year it signed another ninety-nine-year deal with a subsidiary of Morgan Stanley that handed over the revenue derived from the 9,100 parking spaces in the four underground parking garages beneath Grant and Millennium parks for $563 million in cash. Then, in 2008, Daley announced a $1.2 billion deal that leased out the city’s 36,000 downtown parking meters for a period of seventy-five years—the first such privatized parking meter scheme in U.S. history. Finally, in 2009, the city made a bid to sell off Midway Airport for $2.5 billion, but the deal fell through when the buyers could not procure financing.

  In the eyes of many economists and consumer advocacy groups, Chicago was on the bad end of all these deals, which were negotiated and concluded in a manner befitting a banana republic. Declining to issue calls for tenders, City Hall badly undersold its assets, and now Chicagoans looking to park their cars were at the mercy of private companies—and complaints about exorbitant fees and malfunctioning meters began to pile up.74 But Chicagoans parking their cars were not the only ones being asked to tighten their belts in this moment of fiscal austerity. In 2007 the mayor announced the need for service cuts and fare hikes to keep the Chicago Transit Authority afloat, a burden that would have weighed most heavily upon low-paid service sector workers whose shifts fell outside banker’s hours. In the end, Daley was able to avoid such measures by calling in a favor in the form of a $78 million bailout from Illinois governor Rod Blagojevich, who worked as an assistant prosecutor under Daley during his stint as state’s attorney in the mid-1980s (and who was eventually removed from office and indicted by a federal court for trying to sell Barack Obama’s vacated senate seat to the highest bidder). But this was merely a short-term fix, and for the first time in his career, Daley began to look vulnerable. After raising property taxes in 2007, he turned to scaling back services and trimming the payroll, including unionized city workers and teachers. Indicative of where the backlash against such actions was heading, alderman Patrick O’Connor of the Fortieth Ward raised eyebrows when he suggested dissolving the TIF districts and using the $1.2 billion in them to help solve the budget crisis.

  This was the context within which City Hall put together its ultimately unsuccessful bid to host the 2016 Olympic Games—Daley’s last-ditch effort to save Chicago’s image in the midst of this financial distress. Apparently, the mayor was traveling in his limousine from the airport in Copenhagen when he heard the bad news, and one can only speculate about what was going through his mind at the time. This was a man who was used to getting his way; in 2003, for example, he had ordered city bulldozers to destroy the landing strip at Meigs Field, Chicago’s small waterfront airport, because he was tired of hearing opposition to his plan to convert the airport into a park.75 Making this defeat even more embarrassing was the fact that in an unprecedented move, President Barack Obama and First Lady Michelle Obama had personally traveled to Denmark to support Chicago’s bid. When Daley announced he would not run again in September 2011, many pointed to the failed Olympics bid as the reason. Yet there was likely much more to it.

  Chicago’s political terrain had finally begun to shift dangerously under Daley’s feet in mid-2006, when a grassroots movement spearheaded by a coalition of labor unions and community organizations managed to convince the city council to disregard the mayor’s wishes and pass by a decisive vote of 35–14 a “big box living wage ordinance.” The ordinance required large, profitable retailers with stores larger than 90,000 square feet to pay a wage of $10 per hour plus $3 in benefits to their employees—significantly above the $6.50 per hour minimum wage in the state of Illinois. Daley opposed the measure by arguing that it would steer big retailers like Wal-Mart and Target out of the city and into the suburbs, thus hurting low-income black communities badly in need of jobs and low-cost food retailers. He had used similar reasoning to oppose a living wage ordinance in the mid-1990s but then reversed direction in 1998 when he and his supporters on the city council saw the opportunity to exchange this minimum wage increase, which excluded employees of nonprofit organizations and contractors with fewer than twenty-five employees, for a significant hike in their own salaries. But this time there was no quid pro quo on the table and Daley dug his heels in, even going so far as to attack the largely white leadership of the Chicago Federation of Labor for racism. But the call for economic justice on behalf of the lowest-paid workers in the city carried the day; Daley’s reverse race-baiting tactics were no match for the grassroots organizing activities of the Association of Community Organizations for Reform Now (ACORN) and Local 880 of the Service Employees International Union (SEIU), which had been mobilizing workers behind living wage ordinances since the mid-1990s. And even though Daley had won the battle by using the first and only veto of his mayoral career and then twisting the arms of enough aldermen to prevent an override, the marginalized began to seem much less marginal.

  In 2007, for the first time in the Chicago Federation of Labor’s modern history, the organization did not endorse an incumbent Chicago mayor in the municipal elections, instead spending some $3 million to challenge Mayor Daley’s allies on the c
ity council. Labor had been one of Daley’s bread-and-butter constituencies, and even if the Building Trades Council would never leave his side, some of the major unions were leading a populist revolt against Daley’s global agenda. Around the time the mayor was pondering another run in 2011, the Teamsters were incensed about Daley’s use of nonunion truck drivers; the leadership of the Chicago Teachers Union, which had been recently taken over by the militant Caucus of Rank and File Educators (CORE), began stepping up its fight against privatized charter schools; and the American Federation of State, County and Municipal Employees (AFSCME) was challenging Daley’s plans to lay off thousands of city workers. And everyone was asking the same question: why not tap into the billions of dollars stashed away in the city’s TIF funds?