Chicago is a large City in the American state of Illinois that is believed to have been settled around 1780. Currently, the city is home to around 2.7 million inhabitants, according to the 2020 census. This not only makes it the largest city in the State of Illinois but also the third largest in the whole of America behind New York and Los Angeles. Furthermore, as of 2018, the Chicago metropolitan area was the 39^th largest in the world.

History

Chicago has a rich history, from its settlement to ‘The Great Fire’ which occurred on October 8^th, 1871. The fire killed 300 people and left one-third of the city’s population homeless (National Geographic , 2023). Some of the city’s most important infrastructure was speared such as factories, railroads, and docks, which helped it make a speedy recovery.

The 1886 Haymarket affair was another significant point in Chicago’s history. William J. Adelman, who was a professor of Labour and Industrial Relations at the University of Illinois, Chicago, said, “No single event has influenced the history of labour in Illinois, the United States, and even the world, more than the Chicago Haymarket Affair. It began with a rally on May 4, 1886, but the consequences are still being felt today. Although the rally is included in American history textbooks, very few present the event accurately or point out its significance”. The event revolved around the unlawful police killing of a protesting worker at the McCormick Reaper Plant at Western and Blue Island Avenues. The protests were a result of the workers being forced to sign waivers of the law as a condition of employment. This event led to the first-ever use of a dynamite bomb in the peacetime history of the United States of America. The use of this bomb and subsequent firing by the police in the darkness caused the deaths of a further seven policemen and four workers. Only one death was a direct result of the bomb’s explosion. The following day, there was a nationwide crackdown on labour unions. On the 1^st of May every year, the world celebrates “Labour Day” in memory of those who lost their lives because of the Haymarket affair. The event was mainly viewed as a suppression of freedom of speech/press, the right to free assembly, the right to a fair trial by a jury of peers, and the right of workers to organise. (Sky History, 2010), (Adelman, n.d.)

The city’s population rose to 3 million people by the 1930s, with gangsters like Al Capone and John Dillinger grabbing headlines across the nation for their gang operations. During World War II Chicago’s industrial might swung into full war production mode. By the end of the war, the city had produced $24 billion worth of war goods. These came from the 1,400 companies that produced everything from field rations to torpedoes. Aircraft plants employed 100,000 people, and The Douglas-Chicago plant, which was situated on the present O’Hare Field, produced 654 C-54 Skymaster transports in 25 months. Finally, over half of all military electronics used in the war came from 60 local plants throughout Chicago. However, many Chicagoans frequently worked double shifts to aid the war effort. (Encyclopedia of Chicago , 2005)

The post-war Chicago era began, and it looked like the city would continue to grow its well-known industrial sector. At this time, the city had 204 large-scale industrial projects under construction for the five-year period between 1946 and 1951, with a combined value of $131 million, or $1.65 billion in 2023. Over this time, corporations built over 800 industrial buildings, leading to 1,000 acres of new manufacturing capacity. By the end of this era, roughly 8,000 acres were dedicated to industrial purposes, excluding railyards and trackage. Unfortunately for the city, this growth was not going to last forever, and in 1986, U.S. Steel reported a loss of $1.83 billion. Prior to this announcement, 16,000 Chicago steelworkers lost their jobs because Wisconsin Steel closed one of its plants. U.S. Steel’s South Works, which operated in Chicago’s South, once employed over 17,000 people. A few days before it closed, it was reported that only 700 workers remained. (Pacyga, 2020)

Another example of the industrial decline in Chicago is the Western Electric Hawthorne Works, which was a vast complex that included over one hundred buildings and provided 5 million square feet of industrial space. At its height, this mammoth of Chicago’s manufacturing industry employed 45,000 people, but in 1983, after years of rumours and a vastly reduced workforce, Western Electric closed Hawthorne Works. (Pacyga, 2020)

Between 1967 and 1982, Chicago lost 46 per cent of its industrial might (around 250,000 people), and in the 1970s, the city lost 25 per cent of its factories. The decline continued into the 1990s, when between 1982 and 1992 the area lost another 18 per cent and in the two years between 1991 and 1992, the city lost 19,000 industrial jobs in the city and 6,000 in the suburbs. (Pacyga, 2020)

Economy

For many decades, Chicago has been at the heart of many American industries, such as finance and manufacturing. Although High-income countries are shifting away from Secondary economies in favour of tertiary ones, Chicago has seemed to be able to embrace the changing world very well.

Finance:

According to the Chicago Business Bulletin and World Business Chicago, the city’s “financial and insurance industry generates $53 billion annually in output and employs over 240,000 individuals.” These facts alone cement Chicago as one of America’s most important cities for business, but when we look even deeper into it, we can see that Chicago only goes from strength to strength. For example, over 13,800 companies in 2021 were part of the city’s finance and insurance industry, and in 2020, the industry grew by 2.29%. Both statistics are very attractive for companies wondering where to set up their next headquarters or regional offices.

To understand another important aspect of Chicago’s financial sector, we need to know what is meant by “Fintech” which according to Columbia University means “a catch-all term referring to software, mobile applications, and other technologies created to improve and automate traditional forms of finance for businesses and consumers alike.” According to the same report by the Chicago Business Bulletin, “Chicago’s Fintech ecosystem consists of eight segments with over 300 companies that raised $4.58 billion in growth capital in 2021, an increase of 112% from 2020.” Now, when we compare Fintech investment to that of other cities in America, Chicago comes in at 3^rd place behind New York ($15.11B) and San Francisco ($22.05B). But significantly ahead of other major American cities such as Boston ($1.18B) and Seattle ($639M). Demonstrating that Chicago will play a big role in the upcoming breakthroughs in the technology industries, which only further keeps it at the top of the pack alongside other American cities.

Manufacturing

You will be very familiar with Chicago’s history as a manufacturing giant, not only in America but around the world. Many of you may think that with the changing economy, the Chicago region has veered severely away from this economic sector. There is some truth in this; for example, by 1950, 36 per cent of Chicago’s workforce was employed in manufacturing. Today, that figure is just 11 per cent. (Kang, 2019) (Pacyga, 2020)

This doesn’t mean this sector is no longer a valuable part of the region’s economy. In fact, “manufacturing, construction, retail trade, and wholesale trade collectively represent over one-quarter of all jobs in the region and add over $158 billion per year to the regional economy.” Metal manufacturing, electrical manufacturing, printing, and food manufacturing represent 64% of all Illinois manufacturing employment showcasing that even though the city has been through some rough patches, parts of its core industries still remain and succeed.  

Freight network

Chicago’s location in the middle of the United States has allowed it to become the hub of the American rail and highway networks.

Some facts about the region’s freight statistics:

• 10 Interstate highways
• 6 Class 1 railroads
• 1.1 billion Ft² of industrial space
• 6^th busiest cargo airport in the nation.
• 25% of all freight trains and 50% of all intermodal trains in the U.S. pass through the Chicago region.
• Some facilities in metropolitan Chicago carry over 30,000 trucks each day.

The combination of location and a strong manufacturing sector means that “over 7.8 million freight containers originated or terminated in the city in 2016, or nearly 16.3 million twenty-foot equivalent units (TEUs)”. (Chicago Metropolitan Agency for Planning, 2023) Meaning $3 trillion worth of goods move through the region each year. All of this movement leads to businesses setting up in the region to try and capitalise on this.

Future

Chicago looks well-placed to continue to follow other major American cities as their economies change in accordance with global needs. The city also has lots of large developments either under construction or planned. Some examples of these are:

The 78

This new neighbourhood will cover around 62 acres and fuse homes, commercial enterprises, cultural events, academia, and outdoor recreation into a new city space. The developers say that this project will add $7 billion to the cites economy in the form of economic activity and this new development will offer 4 million square feet of “breathtaking” new office space in a neighbourhood that will welcome 24,000 people each day. (78Chicago, 2023)

The River District

The River District project is said to be a “major catalyst for the post-industrial transformation of the Chicago River’s north branch”. More than 8 million square feet of mixed-use development rights will accommodate 19,000 jobs and 4,100 residential units. Furthermore, more than 18,000 construction jobs will be created when construction starts. The current plan is expected to generate more than $1.1 billion in municipal tax benefits for the city over the next 20 years, which is approximately $60 million per year. Finally, the development is uniquely placed in the “Tech Triangle,” which will help the developers see their development turn into a technology hub at the heart of the city. (Kozlarz, 2018)

My Thoughts

Chicago is truly a global city of significant importance. The Globalisation and World Cities Research Network (GaWC) has placed Chicago as an ‘Alpha’ city, which according to the GaWC’s own website is a “Very important world city that links major economic regions and states into the world economy.” This puts Chicago on par with other major world cities like Amsterdam, Mexico City, Sydney, and Toronto (GaWC, 2020). Making sure the city’s economy runs smoothly is of paramount importance to the U.S. Government if they want to keep the city at the same status it is currently at. In addition, we can see that the city is still a hotspot for investment and will be able to hold its own against every other American city for the foreseeable future.

References

78Chicago, 2023. Get to Know Chicago’s Next Great Neighborhood. [Online]
Available at: https://www.78chicago.com/explore
[Accessed 16 July 2023].

Adelman, W. J., n.d. THE HAYMARKET AFFAIR. [Online]
Available at: https://www.illinoislaborhistory.org/the-haymarket-affair
[Accessed 18 July 2023].

Chicago Metropolitan Agency for Planning, 2023. Maintain the region’s status as North America’s freight hub. [Online]
Available at: https://www.cmap.illinois.gov/2050/mobility/freight#:~:text=By%20almost%20any%20measure%2C%20metropolitan,between%20western%20and%20eastern%20railroads.
[Accessed 14 July 2023].

Encyclopedia of Chicago , 2005. Word War II. [Online]
Available at: http://www.encyclopedia.chicagohistory.org/pages/1384.html
[Accessed 18 July 2023].

GaWC, 2020. The World According to GaWC 2020. [Online]
Available at: https://www.lboro.ac.uk/microsites/geography/gawc/world2020t.html
[Accessed 2023 July 2023].

Kang, E. Y.-J., 2019. Manufacturing needs workers. Chicago has plenty. Where’s the disconnect?. [Online]
Available at: https://www.marketplace.org/2019/12/11/manufacturing-needs-workers-chicago-has-plenty-wheres-the-disconnect/
[Accessed 14 July 2023].

Kozlarz, J., 2018. River District, Lakeshore East, Union Station towers clear key city vote. [Online]
Available at: https://chicago.curbed.com/2018/10/19/17990532/skyscrapers-lakeshore-east-union-station-river-district
[Accessed 17 July 2023].

National Geographic , 2023. The Chicago Fire of 1871 and the ‘Great Rebuilding’. [Online]
Available at: https://education.nationalgeographic.org/resource/chicago-fire-1871-and-great-rebuilding/
[Accessed 17 July 2023].

Pacyga, D. A., 2020. Chicago’s Postwar Industry. [Online]
Available at: https://www.chicagodesignstories.com/post/chicago-s-postwar-industrial-metamorphosis
[Accessed 14 July 2023].

Sky History, 2010. Chicago. [Online]
Available at: https://www.history.com/topics/us-states/chicago
[Accessed 18 July 2023].