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Urban Change and Poverty (1988)

Chapter: Jobs, Migration, and Emerging Urban Mismatches

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Suggested Citation:"Jobs, Migration, and Emerging Urban Mismatches." National Research Council. 1988. Urban Change and Poverty. Washington, DC: The National Academies Press. doi: 10.17226/1096.
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Jobs, Migration, and Emerging Urban Mismatches JOHN D. K ASARDA Spatial disparities in economic growth and corresponding migra- tion adjustments have been constant features of our nation's devel- opment. As more efficient transportation and communication tech- nologies evolve, modes of production organization and services are transformed; labor and natural resource requirements of industry change; and locational advantages shift, with new areas of oppor- tunity rising while others decline. America's people, in turn, have tended to follow opportunity. In particular, this tendency has been the case for our nation's disadvantaged who historically have fled areas experiencing economic distress (often characterized by a sub- stantial labor surplus relative to jobs) for areas of better opportunity. Indeed, it is not mere chance the three great symbols of opportunity for the disadvantaged in America all represent migration the Statue of Liberty, the underground railway, and the covered wagon. One consequence of the constant search of Americans for eco- nomic opportunity and a better life is that cities, suburbs, non- metropolitan areas, and entire regions have frequently experienced uneven demographic growth. Before World War IT the metropolitan areas of the Northeast and Midwest contained the majority of the nation's inclustrial locational advantages (excellent deep-water ports, extensive railroad and inland waterway systems, well-developed inter- and intrametropolitan highways, proximity to rich coal deposits, ubiquitous public utilities, a diverse and relatively better-educated 148

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 149 labor force, and strong local markets). Such externalities provided firms locating in metropolitan areas of the North with competitive cost and market advantages that allowed them to expand much faster than their counterparts in more isolated, less-developed regions of the South and West. In fact, as late as 1950, more than 70 percent of all manufacturing jobs were in the Northeast and Midwest, mostly concentrated in and around the largest cities. Since World War IT a number of economic, political, and tech- nological forces have combined to accelerate industrial restructuring and shift the nation's employment growth pole first to the West and then to the South. The rapid postwar growth of aerospace, defense, solid-state electronics, and other advanced technology in- dustries, together with expanding construction and services, fueled the economies of the Far West, especially California. Growth of these industries was instrumental in attracting over 3 million migrants to California alone between 1945-1960 (Bureau of the Census, 1975b). With diversified economic expansion continuing in the West, the region's total employment doubled during 1960 1985. Nevertheless, the South emerged in the 1960s as the nation's leader in absolute employment gains. Between 196~1985, the South added 17 million jobs to its economy, compared with a growth of just over 11 million in the West. During the same period, the Midwest added 7.3 million and the Northeast just over 5 million jobs (Bureau of the Census, 1960, 1985~. The South's econorn~c surge has been attributed to its improved accessibility to national and international markets through newer interstate highway systems and expanded airports; shifting energy sources; upgraded public schools and universities; more modern phys- ical plants; a sunny, benign climate; and relatively lower taxes and wage rates (Cobb, 1984; Goldfield, 1982~. To these technological and financial considerations were added healthy doses of progrowth atti- tudes and industrial solicitation on the part of southern states and communities (Cobb, 1982; Kasarda, 1980~. Thus, while manufactur- ing employment in the Frostbelt (Northeast and Midwest regions) declined by over a million jobs between 1960-1985, manufacturing employment in the South grew by over 2 million. Moreover, em- ployment growth in southern manufacturing was far overshadowed by substantial increases in construction, trade, en c! services, which added more than 15 million jobs to the South's economy between 1960-1985 (Bureau of the Census, 1960, 1985~. The expanding post-WorId War II economies of the West and

150 John D. Kasarda South sequentially attracted major streams of migrants. The net interregional migration exchanges for the past three decades pre- sented in Table 1 reflect the nation's shifting demographic growth poles from the West to the South. Before 1970 the West was the net beneficiary of migration streams from all census regions. These streams were especially large during the 1950s. During the 1970s the Current Population Survey indicates that more persons from the West began moving to the South than vice versa, while net flows from the Northeast and Midwest to the South rose dramatically. Be- tween 1975-1980, overall net migration to the South was double that to the West. Spurred by a marked increase in net flows from the Midwest, net migration to the South was nearly triple that to the West between 1980-1985 (1.9 million versus 649,000~. During the past 15 years the Northeast and Midwest have experienced combined net migration losses of 8 million people, most of whom moved to the South. Since 1980 the Midwest has experienced a net migration loss of 1.5 million, of which 1.1 million may be attributed to this region's negative exchange with the South. The research literature points to a complex of interacting factors that have transformed the South from a net exporter of people until the early 1950s to a demographic magnet in the 1970s and 1980s. These factors include: (1) a sun-seeking retirement population whose priorate pensions, Social Security payments, and other sources of in- come free them from their previous work locations; (2) the intros auction and spread of central air-conditioning systems that permit far more comfortable summertime living and working conditions; (3) life-style changes oriented to more recreation and year-round out- door activities; (4) changing racial attitudes permitting blacks and Hispanics new opportunities to participate in mainstream southern institutions; (5) more progressive political orientations; (6) generally lower costs for land, living, and amenities; (7) a major improvement in the quantity and quality of consumer services brought about by rising personal incomes; and (8) the emergence of the South as an economic growth pole for the reasons mentioned earlier in this paper (for additional discussion, see Kasarda, 1980~. What about the demographic composition of the migrants? Ta- ble 2 shows the net interregional migration exchanges between 1975- 1980, and between 1980-1985, by race and ethnicity. These ex- changes, which were computed from the machine-readable files of the Bureau of the Census' Current Population Survey, show that

JOBS, MIGRATION, AND EMERGING URBAN MIS~4TCHES TABLE 1 Net Interregional Migration Flows (in thousands), 1955-1985 151 Regional Net Migration (in thousands) Exchanges 1955-1960a 1965-1970b 1970-1975C 1975-1980d 1980-1985 South with Northeast 314 438 964 945 737 Midwest 122 275 790 813 1,100 West -380 -56 75 176 60 Total other regions 56 657 1,829 1,935 1,897 West with Northeast 285 224 311 518 234 Midwest 760 415 472 634 475 South 380 56 -75 -176 -60 Total other regions 1,425 695 708 976 649 Midwest with Northeast 40 53 67 146 50 South -122 -275 -790 -813 -1,100 West -760 -415 -472 -634 -475 Total other regions -842 -637 - 1,195 - 1,302 - 1,525 Northeast with Midwest -40 -53 -67 -146 -50 South -314 -438 -964 -945 -737 West -285 -224 -311 -518 -234 Total other regions -639 -715 - 1,342 -1,609 -1,022 NOTE: Some columns do not sum precisely because of rounding. bFrom Bureau of the Census (1963:Table 237~. c From Bureau of the Census ~ 1973:Table 274) . -dFrom Bureau of the Census (1975c). e From Bureau of the Census ~ 1980b) . -From Bureau of the Census (1985~. non-Hispanic whites accounted for nearly 90 percent of the net south- ern migration gains from other regions. Indeed, both the absolute number and the percentage of net migrants to the South who were non-Hispanic whites rose from the 1975-1980 period to the 1980- 1985 period. In the West, on the other hand, there has been a substantial decline in the number and percentage of net inmigration accounted for by non-Hispanic whites. Much of this decrease is due

152 John D. Ka~a~da to a dramatic decline in the migration of non-Hispanic whites from the Northeast from the 1975-1980 period to the 1980-1985 period. Of related interest, the net return of non-Hispanic blacks to the South from other regions declined from 194,()00 between 1975-1980 to 87,000 between 1980-1985, with most of this slowdown due to a drop in the number of black migrants (59,000) from the Northeast. Furthermore, the migration of non-Hispanic blacks from the South to the Northeast increased by 50,000 between the 1975-1980 and 1980-1985 periods. Table 2 also reveals the accelerating loss of non-Hispanic whites from the Midwest. Between 1980-1985, the Midwest experienced a negative net migration exchange of nearly 1.4 million non-Hispanic whites with other regions of the country, compared with a net loss of 1.2 million between 1975 and 1980. The accelerated out-migration of non-Hispanic whites from the Midwest was due largely to an increase in this region's negative net exchange with the South. Another migration stream of growing importance is movers from abroad. Table 3 shows these movers, by region, for a series of 5- year periods between 1955-1960 and 1980-1985. Two trends are immediately apparent. First, there has been a substantial increase in the total number of movers to the United States during the past three decades. Second, since 1965 virtually all of the increase has been captured by the West and the South, with the West pulling ahead of the South as the primary destination. Between 1975-1985, over 2.8 million persons from abroad moved to the West, 2.3 million moved to the South, 1.7 million moved to the Northeast, and slightly over 1 million moved to the Midwest. In fact, since 1980 the West has gained more than twice as many movers from abroad as from the other regions of the nation. A more detailed analysis of these data by race and ethnicity shows that during the last 10 years the West has received approx- imately 1 million Asian immigrants, more than all other regions combined. The vast majority of Asian immigrants have settled in California. The West has also been the largest receiver of Hispanic immigrants, gaining over 900,000 between 1975-1985. The South has exhibited major increases in Hispanic immigrants during the 1980s, falling closely behind the West. The South also registered increases in Asian immigrants but still trails the West substantially as the regional destination of this group. Between the 1975-1980 and 1980-1985 periods, Hispanic immigrants to the Northeast and

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154 TABLE 3 Moorers from Abroad (in thousands) by Region, 1955-1985 John D. KaJarda Region 1955-1960a 1965-1970b 1970-1975C 1975-1980d 1980-1985e Northeast 592 821 903 834 832 Midwest 361 440 638 590 457 South 505 740 1,082 1,164 1,180 West 545 697 980 1,475 1,387 bFrom Bureau of the Census (1963:Table 237~. c From Bureau of the Census (1977:Table 274~. -~From Bureau of the Census ~ 1975c). e From Bureau of the Census (1980b). -From Bureau of the Census (1985b). Midwest increased modestly, while Asian immigrants to these regions declined slightly. The shift in regional residence of movers from abroad during the past three decades reflects a major change in the principal countries of origin of such movers. Until the late 1950s the origin of most U.S. immigrants was in Europe, geographically to the east and north of the United States. The majority of immigrants therefore found their closest ports of entry in New York and other northern states. During the past two decades the territorial locus of origin nations has increasingly shifted to the west and south of the United States (principally Mexico, Latin America, and Asia). As a result, Los Angeles, San Etrancisco, Miami, and Houston have become primary ports of immigrant entry. Between 1970-1983, more than a million Hispanics, Asians, and other foreign-born persons settled in Los Angeles County (Muller and Espenshade, 1986), lending empirical credence to anecdotal reports that Los Angeles has replaced New York City as the exemplary smelting pot" of the nation. With increased immigration supplementing substantial internal net migration flows to the South and West, population growth in these regions has dwarfed that of the Northeast and Midwest. Table 4 describes population change in each region between 1975-1980, and between 1980-1985, by race and ethnicity. Over the past 10 years, the South has added 12.3 million residents, the West has added 8.8 million, the Midwest 2.2 million, and the Northeast 1.2 million. Further examination of Table 4 shows that, between both 1975-1980 and 1980-1985, the South and West have accounted-for more than 85 percent of the nation's population growth. Table 4 also illustrates significant racial/ethnic differences in

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156 John D. Kasarda regional population growth. The Northeast is the only region to experience an absolute and percentage increase in population dur- ing the 1980s compared with the latter half of the 1970s, yet its non-Hispanic white population losses accelerated. Between 198(~ 1985, the non-Hispanic white population of the Northeast declined by 554,000, while the region's Hispanic population expanded by 773,000, its black population increased by 475,000, and its Asian population expanded by 90,000. The population increase that occurred in the Midwest during the first half of the 1980s also was predominantly through increases in that region's minority populations. On the other hand, the South and the West experienced major growth of their non-Hispanic white populations between 1975-1985. An aggregate comparison of the Frostbelt (Northeast and Midwest) with the Sunbelt (South and West) reveals that, between 1975-1985, the Sunbelt added 11.64 million non-Hispanic whites, whereas the Frostbelt lost 371,000 non- Hispanic whites. The Sunbelt also added more minorities than did the Frostbelt, although absolute differences in minority population growth were not nearly as striking as they were for non-Hispanic whites. Along with racial/ethnic changes of migration flows among re- gions, there have been changes in the racial/ethnic composition of metropolitan central cities, suburbs, and nonmetropolitan areas of each region. Table 5 presents these composition changes from 1975- 1985. With modest growth in the black, Asian, and Hispanic pop- ulations, and absolute declines in non-Hispanic whites, the minority proportion of central cities in the Northeast grew from 33 percent to 42 percent during this period. In the Midwest, central-city minority proportions increased from 28 percent to 36 percent. Concurrently, central cities in the South exhibited monotonic rises in their over- all minority proportions, primarily through growth in the number of Hispanics. Substantial growth in the Hispanic and Asian populations occurred in western central cities. Indeed, increases in the number of Hispanics and Asians in these cities were so substantial between 1975-1985 that, despite an absolute increase in the number of blacks there during the period, the black proportion of central-city tote] population fell by nearly 3 percent. The racial/ethnic compositions and compositional changes that occurred between 1975-1985 in the metropolitan suburban rings and nonmetropolitan areas reveal some striking interregional contrasts. In the Northeast and Midwest, non-Hispanic whites constitute more

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158 John D. Ka~a~da than 90 percent of the suburban populations of these regions and more than 95 percent of their nonmetropolitan populations. These percentages changed very little between 1975-1985. In the South and West, the minority percentages of the population in the suburban rings and nonmetropolitan areas were much higher. The growth of black, Asian, and Hispanic populations in the suburban rings of southern metropolitan areas increased the minority percentage in these areas from 15 percent to 21 percent between 1975-1985. The minority percentage in western metropolitan suburbs concurrently rose from 20 percent to 26 percent. L`ed by a steady growth in the Asian population, minority per- centages of nonmetropolitan areas in the West increased from 15 percent to 18 percent during 1975-1985. In the South, minority per- centages of nonmetropolitan areas remained constant at slightly over 21 percent. It is important to emphasize that, although the overall minority proportions of central cities in the four regions are similar, there are significant differences between the Frostbelt and Sunbelt regions in their suburban and nonmetropolitan minority proportions. In 1985, the highest overall minority percentage In the metropolitan suburbs or nonmetropolitan areas of the Frostbeit was 8.9 percent in Northeast suburbs. Conversely, the lowest overall suburban or nonmetropolitan minority proportion in the Sunbelt was 18 percent, which was registered in nonmetropolitan areas of the West. Clearly, then, minorities are less confined to central cities in the South and West than in the Northeast or Midwest. Recent minority immigrant locational trends reinforced these relative differences in minority confinement. Between 1975-1985, most minority immigrants to the Northeast and Midwest settled in the central cities of metropolitan areas, whereas in the South and West, most have settled in the suburban rings and nonmetropolitan areas. As we will see later, such settlement patterns have important implications for entry-level job opportunities for minorities. COMPETITIVE EFFECTS AND REGIONAL GROWTH A fundamental reason for the substantial growth of the South and West during the past decade has been the ability of their economies to weather recessions better than those of the Northeast and Mid- west. In accounting for differential local and regional econorn~c per- formance during economic downturns, industry mix has received a

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 159 good deal of attention. It is argued that areas whose economic bases are dominated by firms whose products are disproportionately con- centrated in cyclically sensitive industries (e.g., as consumer durable goods manufacturing) will experience more severe declines in their local employment during recessions than those places whose employ- ment mix is less sensitive to recessions, such as places where higher order producer service industries predominate (Bergman and Gold- stein, 1983; Bluestone and Harrison, 1982; Noyelle and Stanback, 1983~. Conversely, localities with especially advantageous industrial mixes often experience employment gains in the face of recessions and expand much faster than national growth rates during periods of economic prosperity (Noyelle and Stanback, 1983~. These localities have high proportions of younger, more vibrant industries that are adapted to macrostructural transformations in the broader economy (Bell, 1973; CastelIs, 1985~. Yet the industrial structure of localities and regions is not always predictive of how their employment bases will respond to business cycles. The South, for example, added substantial employment dur- ing the most recent recession (198~1982), despite having an overall industrial mix that was not nearly as favorable as that of the North- east. The analysis of employment change among all 3,200 U.S. coun- ties further revealed numerous counties with unfavorable industrial mixes that exhibited marked employment gains during recent na- tional recessions; yet other counties with favorable industrial mixes experienced considerable employment decline, even during periods of national economic prosperity (Kasarda and Irwin, 1986~. Such local- ities appear to possess competitive advantages or disadvantages that overcome both the effects on employment growth of local industrial structure and national business cycles. To measure these competitive effects and assess their role in regional job growth and decline, shift/share techniques were applied to analyze employment changes in all counties within each region during the last two recessions (1974-1976 and 1980-1982) and the business cycle upswings that followed them. Very briefly, shift/share analysis decomposes an area's employment change between any two points in time into three parts: (1) that portion accounted for by national employment change, (2) that due to the area's industrial mix, and (3) that due to unique local features (see Dunn, 1960, 1980; Perioff et al., 1960~. The third term, known as the shift or competitive component, is the amount of an area's employment

160 John D. Ka~arda change that cannot be explained by national economic conditions or local industry mix. It is an outcome of such factors as transportation access, land availability and cost, wage rates, taxes, union strength, federal investment, business regulations, physical climate, and local attitudes toward growth. As these locally unique competitive factors come into play, some localities and regions fall behind, while others surge ahead. Table 6 presents aggregate summaries of the competitive effects of metropolitan core, metropolitan rug, and nonmetropolitan coun- ties in each region during different phases of the business cycle.: These summary statistics were obtained by aggregating the compet- itive components of all counties in each spatial category at each cycle phase. The algorithm for computing the competitive components standardizes the effects in a zero-sum manner such that industry- specific employment gains in one county come at the expense of another county's loss (hence, the "shift" terminology). Thus, each column of competitive effects sums to zero. Competitive effects were computed for 10 categories of counties within each region along an urban/rura] continuum (from counties containing large metropolitan central cities to nonmetropolitan coun- ties containing no place larger than 2,500 residents); corresponding local Industrial mix ("shaver) ejects were computed for the same 10 categories. Space constraints preclude tabular presentation of these finer grain results; comments are made about them where pertinent, however. For example, prior to 1978 the employment growth of the Northeast was hampered by exceptionally weak competitive ejects iThe shift/share analysis presented in this paper was based on industry- specific employment obtained for 3,101 U.S. counties from the County Bwinces Patterns (CBP) machine-readable files of the Bureau of the Census (1974, 1976, 1978, 1980a, 1982a, 1984~. Since 1977 COP employment has been the count of employees during the pay period including March 12 for each year, as reported on Treasury Form 941, Schedule A. The form is used to indicate all employment covered by Social Security or other retirement systems. Prior to 1977 coverage included only employment covered by Social Security. This change affected employment coverage in industries in which private retirement systems are prevalent, such as health and educational services. CBP covers approximately 88 percent of total civilian, nongovernment employment. For a discussion of the industrial categories used in the shift/share analysis and related methodological issues, see Kasarda and Irwin (1986~. In Table 6, Metropolitan core counties" refers to counties in which the metropolitan central city is located. Metropolitan ring counties refers to those counties not containing the central city in multiple-county metropolitan areas.

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162 John D. Kaearda of the region's large and medium-sized metropolitan core counties. After 1978, however, the competitive position of these larger urban counties and the region improved. By the 1980-1982 recession, the Northeast's overall competitive effect was positive (see Table 6~. This regional improvement in the competitive effect is indicative of im- portant changes in defense expenditures, new industry demands for better educated and more highly skilled labor, and reduced business regulations, taxation rates, and ecological structure as the decen- tralization of population and industry acted to decrease problems of congestion in certain core cities at the same time it boosted economic growth in the suburban ring counties. Led by a remarkable trans- formation of the Northeast's largest cities to white-collar services, industrial mix effects in the Northeast became much more favorable to growth during the 1980s. Mends in competitive ejects in the Midwest ran counter to those of the Northeast, with the Midwestern situation steadily deteriorat- ing between 1974-1982. This deterioration occurred in most types of counties but was especially severe in metropolitan core counties. Such factors as high wage rates, union restrictions, aging infrastruc- ture, and a negative balance of tax payments with Washington have apparently compounded problems of the Midwest's disadvantaged industrial mix during economic downturns and substantially weak- ened the region's ability to compete for jobs (Checkoway and Patton, 1985~. Even during the post-1982 recovery, the positive competitive effects of midwestern metropolitan ring counties did not compensate for the competitive disadvantages of midwestern metropolitan core counties and nonmetropolitan counties. Thus, the regional totals in Table 6 show that all other regions grew since 1982 at the competitive expense of the Midwest. The South's competitive edge increased sharply between 1978 and 1982, then atrophied. During the 1980-1982 recession, all types of counties—from the most rural to the most urbanized gained far more jobs than can be accounted for by either national growth trends or the southern counties' industrial structures. Smaller metropolitan central-city counties showed particularly strong competitive effects during the 1980-1982 recession, as did the central-city and subur- ban counties in the region's largest metropolitan areas. The highly unfavorable industry mix of the South's nonmetropolitan counties was not entirely offset by these counties' positive competitive effects, and consequently southern nonmetropolitan counties had modest employment declines during each of the last two recessions.

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 163 With agricultural problems, falling of! prices, and foreign compe- tition striking particularly hard at the South's rural manufacturing industries, negative competitive multipliers rippled through the re- gion's nonmetropolitan areas while previous overbuilding and prom lems related to the energy industry severely dampened a number of large metropolitan core counties, such as Harris County (Houston) in Texas. During the 1982-1984 period, the combined competitive effects of metropolitan core counties in the South were less than those in the Northeast and almost as weak as in the Midwest's metropolitan core counties—a dramatic reversal from the strong competitive posi- tion of the South's metropolitan core counties during the 198~1982 recession. The competitive components of growth in the West were stron- gest during the 197~1980 economic upswing. Although the region maintained a consistently positive advantage throughout the business cycle, its competitive edge weakened during the 1980-1982 recession. The West's industrial mix, however, remained highly conducive to employment growth during both national economic booms and busts. Thus, the western regional economy, led by its spatially expansive metropolitan core counties (e.g., Los Angeles, Maricopa [Phoenix], San Diego), was particularly vibrant during periods of national eco- nomic growth and only mildly affected by economic downturns. Overall, the shift/share analysis of county-level employment change showed that the competitive effects of nonmetropolitan coun- ties have weakened: the counties exhibited negative effects in all regions during the 1982-1984 interval. The analysis also indicated that the marked expansion of jobs in the South during the past decade occurred largely because of the region's strong competitive features. These features (which did deteriorate after 1982) more than offset the poor industrial mixes of the South's nonmetropolitan coun- ties. The large employment declines in the Midwest resulted from a disadvantaged industrial mix that was highly sensitive to economic downturns, coupled with weak competitive ejects relative to other regions. (The industrial mix of the Midwest, however, was conducive to employment growth during business cycle upswings.) The North- east has improved its competitive features and its industrial mix in recent years, increasing its ability to hold and attract jobs. Finally, the West has been blessed with a favorable industrial mix and with competitive features that have resulted in its steady employment growth through all phases of the business cycle.

164 John D. Kasarda If the shift/share results are predictive of what should be hap- pening during the current postrecession period, we would expect the South and West to still lead the nation in employment growth, with the Northeast closing the gap and the Midwest still lagging behind. Table 7 shows the changes in the number of nonagricultural employ- ees across the four regions by major industry groupings for 2-year intervals between March 1980-March 1986. The industry groupings are production Omening, construction, and manufacturing), trade (retail and wholesale), and services (finance, insurance, real estate, civilian government employees, and other service industries). Comparing total nonagricultural employment changes during the 1980s (column 1 of each pane] in the table) reveals interesting cross- regional dynamics. Whereas the South added the most employment both in absolute and proportional terms between 1980-1986, it lost its lead in percentage growth rate to the West following the 1982 recession. The Northeast exhibited a strong turnaround (from em- ployment loser to employment gainer) from 1982-1984, as did the Midwest. The economies of both regions further strengthened be- tween March 1984-March 1986 with the Midwest actually surpassing the Northeast in absolute (although not proportional) job growth. The recent improvement of the Midwest was due primarily to the sig- nificant economic recoveries of Ohio, Michigan, and Indiana, whose cyclically sensitive industrial bases responded to the business cycle upswing. Between 1983-1986, these states added more than 620,000 nonagricultural jobs to the Midwest's employment base. Facilitated by its improved competitive situation and industrial mix, the Northeast's employment growth rates during the 1984-1986 interval were nearly as high as those of the South and West. In fact, between March 1985-March 1986, total employment growth in the Northeast equaled that of the South, whose economy slowed for reasons that will be noted shortly. Employment changes within the three industry groups illustrate the major economic restructuring that is taking place in the regions. Nowhere is this more apparent than in the Northeast. This region added 1.73 million jobs to its employment base between 1980-1986; yet it lost 495,000 production jobs.2 Service industries alone added Manufacturing employment in the Northeast actually declined by 686,000 jobs, and mining employment declined by 14,400 jobs; construction, on the other hand, expanded by 205,700 jobs.

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166 John D. Kasarda 1.52 million employees during the first 6 years of the decade.3 By March 1986 over half of all employment in the Northeast was in the services sector. Also remarkable was the Midwest's loss of more than 1 million production jobs (in mining, construction, and manufacturing) during the 198~1982 recession. Despite the modest recovery of this sector following the recession, overall employment gains in the Midwest since 1982 have been largely through the expansion of services and trade industries whose average wages are generally lower than the production jobs they replace. Employment is only one side of the regional job outlook, how- ever. The other ~ unemployment, which reflects growth in the labor force as well as numbers of jobs. Table 8 presents labor force sizes, the number of persons employed, the number unemployed, and un- employment rates for the four regions from March 1976-March 1986, with biennial data during the 1980s. Once again, we can see the uneven regional effects of the most recent recession: marked declines in the number of people employed in the Northeast and Midwest between March 1980-March 1982 in contrast to growth in the South and West. After the recession, however, the number of unemployed persons in the Northeast and Midwest fell more sharply than in the West and South. Indeed, between March 1984-March 1986, the number of people unemployed in the South actually increased by 162,000, making it the only census region to experience a rise in its unemployment rate. The more recent rise in the number of the unemployed in the South not only reflects such factors as agricultural distress, falling oil prices, and foreign competition for southern textiles and other products but also the substantial in-migration of labor to the region during the 1980s (see Tables 1 and 3~. Although the South has added more jobs than any other region of the country since 1982, it has also added the largest number of individuals to its labor force. The Northeast and Midwest, on the other hand, have continued to experience net out-migration, bringing the sizes of their labor forces into better balance with employment opportunities. This pat- tern ~ most pronounced in the New England census division in 3Civilian government employment increased by 16,300; employment in the areas of finance, insurance, and real estate increased by 276,900; and employment in other services rose by 1,236,800.

JOBS, MIGRATION, AND 13MERGING URBAN MISMATCHES TABLE 8 Labor Force Size, Employment, and Unemployment (in thousands) by Region, March 1976-March 1986 Percentage Region Year Labor Force Employed Unemployed Unemployed Northeast 1976 21,561 19,438 2,122 9.84 1980 22,943 21,351 1,592 6.94 1982 23,277 21,193 2,084 8.95 1984 23,593 21,818 1,775 7.52 1986 24,383 22,852 1,531 6.28 Midwest 1976 25,742 23,784 1,958 7.61 1980 27,856 25,811 2,045 7.34 1982 28,159 24,991 3,167 11.25 1984 28,272 25,559 2,713 9.60 1986 29,032 26,686 2,345 8.08 South 1976 29,804 27,705 2,101 7.05 1980 33,946 31,931 2,015 5.94 1982 35,865 32,805 3,060 8.53 1984 37,379 34,559 2,820 7.54 1986 38,963 35,982 2,982 7.65 West 1976 16,078 14,571 1,506 9.37 1980 19,155 17,901 1,254 6.55 1982 20,083 18,108 1,974 9.83 1984 20,661 18,904 1,757 8.50 1986 21,934 20,285 1,651 7.52 SOURCE: Bureau of Labor Statistics (1986b). 167 which substantial job growth, along with slowing yet continued out- migration, depressed that division's unemployment rate to just 4.43 percent In March 1986, nearly half of what it wan in March 1983. Much of New England today is experiencing a labor force squeeze, in dramatic contrast to 1976 when the division had a huge surplus of labor.4 The numerical balance between labor availability and jobs (as manifested in unemployment rates) is central to understanding the numerous problems facing regions and cities. Beyond the raw num- bers, however, are the matches between the composition of jobs and the mix of skills held by the resident work force in transforming local economies. If these matches are disjointed, the unemployment 4 this prior labor surplus is redected in the 10.3 percent unemployment rate of the New England census division in March 1976. This division then had a total of 575,000 people unemployed, compared to 294,000 in March 1986.

168 John D. Kasarda rates of mismatched labor may well rise simultaneously with sum stantial job growth in their localities. Nowhere are the problems of demographic-employment opportunity mismatches and correspond- ing structural unemployment more acute than in the older, larger cities of the North. The remainder of this chapter describes how the redistribution of people and jobs in urban America has resulted in widening <lemographic-employment opportunity mismatches in these cities and the consequences of such mismatches for their disad- vantaged residents. TRANSFORMING URBAN ECONOMIES America's older, larger cities have always been leaders in the development and transition of the nation's employment base. They spawned the nation's industrial revolution, which generated massive numbers of blue-collar jobs that served to attract and economically upgrade millions of migrants. More recently, these same cities were instrumental in transforming the U.S. economy from one primarily of manufacturing to one of basic services (during the 1950s and 1960s) and from a basic service economy to one of information and administrative control (during the 1970s and 1980s). The transformation of major cities from centers of goods proc- essing to centers of information processing was accompanied by cor- responding changes in the size and composition of their employ- ment bases. Manufacturing dispersed to the suburbs, exurbs, non- metropolitan areas, and abroad. Warehousing activities relocated to more regionally accessible beltways and interstate highways. Retail establishments followed their suburbanizing clientele and relocated in peripheral shopping centers and malls. The urban exodus of the middle class further diminished the number of blue-collar service jobs such as domestic workers, gas station attendants, and delivery per- sonnel. Many secondary commercial areas of cities withered as the income levels of the residential groups that replaced a suburbanizing middle class could not economically sustain them. Although most parts of the central city continued to experience an erosion of their employment base, pockets of economic vital- ity emerged offering entertainment, cultural, and leisure services to younger white-colIar workers residing in the cities and to growing numbers of tourists and conventioneers (Kasarda, 1985~. The cen- tra] business districts also experienced a resurgence in investment,

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 169 particularly in high-rise office structures. In contrast to the expan- sive space per worker typically consumed in processing, storing, and selling material goods, the worker space required for processing, stor- ing, and transmitting information is small. Moreover, unlike material goods, information can be transferred vertically as efficiently as it can be transferred horizontally. Those who process information, there- fore, can be stacked, layer upon layer, in downtown office towers, and the resulting proximity actually increases the productivity of those who require extensive, nonroutine, face-to-face interaction. The intensive use of prime space by information-processing func- tions has driven up central business district rents to such a high level that other functions often have difficulty competing. Thus, dur- ing the past two decades, we have witnessed the closing of many traditional downtown department stores and of other large, space- consuming retail and wholesale facilities, concurrent with the boom in central business district office construction. Table 9, which is derived from County Business Patterns data for five major northern cities whose boundaries match or approximate county boundaries, illustrates the nature and scope of urban indus- trial transformation. Between 1953-1985, New York City lost over 600,000 jobs in manufacturing. During this same period, white-colIar service industries (defined as those in which executives, managers, professionals, and clerical employees constitute more than 50 percent of the industry work force) grew by nearly 800,000 jobs.5 Retail and wholesale employment since 1970, corresponding to the industrial redistributional patterns discussed above, declined by 168,000, with blue-collar service employment dropping by 58,000. Philadelphia, Baltimore, Boston, and St. Louis likewise expe- rienced substantial employment declines in manufacturing and in retail and wholesale trade, as well as in blue-collar services. Between 1953-1985, Philadelphia lost more than tw~thirds of its manufac- turing jobs (which dropped from 359,000 to 109,000), decreasing employment in this industry from more than 45 percent of the city's 5White-collar and blue-collar service industries were determined by cate- gorizing industries using occupation data from the Bureau of Labor Statistics (1981) industry-by-occupation matrix for 1970. Those service industries with fewer than 50 percent of their employees classified in executive, managerial, professional, or clerical occupations were designated blue-collar service indus- tries; those with more than half of their employees classified in these same occupations were designated white-collar service industries.

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172 John D. Ka~arda total employment in 1953 to just 18 percent in 1985. During the same period, manufacturing employment in Boston cleclined from 114,000 to 49,000; in Baltimore, it went from 130,000 to 55,000; and in St. IJouis, it dropped from 194,000 to 66,000. Employment declines in retail and wholesale trade and in blue-collar services followed suit, although the absolute and proportional losses were not as steep as those for manufacturing employment. As In New York City, white-collar service employment expanded substantially in the four cities between 1953-1985. Boston's white- colIar service employment increased from 87,000 to 278,000; Philadel- phia's rose from 98,000 to 277,000; Baltimore's went from 44,000 to 139,000; and St. Louis's increased from 50,000 to 97,000. St. Louis is the only northern city in which white-colIar service employment did not exceed 40 percent of the city total in 1985. By the same token, 58 percent of all Boston's jobs were in white-collar service indus- tries in 1985, compared with 22 percent in 1953. Such increases in white-coBar service employment across these northern cities clearly manifest their emergin g information-processing roles in the computer age. Table 10 further highlights the overriding significance of predom- inantly information-processing industries for contemporary urban employment growth. This table divides total employment change between 197~1985 for each city into that accounted for by (1) its service sector industries in which more than 60 percent of the em- ployees in 1978 were classified in executive, managerial, professional, and clerical occupations and (2) all other industries combined (Bu- reau of Labor Statistics, 1981~. In addition to the five northern cities discussed above, four southern and western cities with closely cor- responding city-county boundaries (Atlanta, Houston, Denver, and San Francisco) are presented for comparative purposes. Observe that all five northern cities experienced substantial em- ployment growth in their predominantly information-processing in- dustries and marked employment declines in their other combined industries. For example, New York City added 385,000 jobs between 197~1985 in its predominantly information-processing industries (a 41 percent increase) while losing more than 700,000 jobs in other industries (a 30 percent decrease). By 1985, 44 percent of all jobs in New York City were in service industries in which executives, man- agers, professionals, and clerical workers constituted more than 60 percent of the industry's total employment. Boston's information-processing industries expanded by 42.3

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 173 percent between 1970-1985 while its other industries declined by 21.4 percent. Boston, in fact, is the only major northern city that added more jobs during this period to its predominantly information- processing industries than it lost in other industries. For the other three northern cities Philadelphia, Baltimore, and St. Louis job increases in their predominantly information-processing industries were overwhelmed by job losses in their more traditional industries. This is especially the case for St. Louis, which lost more than half of -its manufacturing jobs between 1970-1985. In contrast to larger, older cities in the North, Atlanta, Hous- ton, Denver, and San Francisco experienced employment gains in both their predominantly information-processing industries and in all other industries combined. Like larger cities in the North, how- ever, the older, major cities in the South and West (Atlanta, San Francisco, and Denver) exhibited substantially greater absolute and proportional gains in their information-processing industries than they exhibited in their other combined industries. Indeed, all three cities lost manufacturing employment between 1970-1985. Houston, on the other hand, added substantial employment across all indus- tries between 1970-1985, no doubt reflecting the city's economic surge during much of this period. A major difference, then, between large cities in the FrostbeTt and large cities in the Sunbelt is that since 1970 Sunbelt cities have added jobs in many other industries besides information-processing, jobs that have contributed to these cities' overall employment growth. Conversely, many FrostbeTt cities have experienced overall employ- ment decline since 1970 because growth in their predominantly information-processing industries did not compensate for substantial losses in their more traditional industrial sectors, especially manufac- turing. In this regard, we find a strong negative correlation between the percentage of the city's employment in manufacturing in prior decades and total job change since 1970. Those cities in which manu- facturing constituted at {east 35 percent of their employment bases in 1953 (Philadelphia, Baltimore, St. Louis, and New York) all experi- enced significant overall job declines between 1970-1985; in contrast, the others (Boston, Atlanta, Houston, Denver, and San Francisco) all added jobs during this period. The functional transformation of major northern cities from cen- ters of goods processing to centers of information processing during the past three decades corresponds to an important change in the ed- ucation required for employment in these cities. Job losses have been

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176 John D. Kasarda greatest in those northern urban industries in which educational requirements for employment tend to be Tow (e.g., a high-schooT degree typically is not required). Job growth has been primarily concentrated in urban industries in which education beyond a high- school degree is the norm. To illustrate this phenomenon, Table 11 presents the employment changes from 195~1985 in industries classified by the mean years of schooling completed by their jobholders. Two categories of industries were selected: (1) industries whose jobholder educational levels in 1982 averaged less than 12 years (i.e., employees did not complete high school), and (2) industries whose jobholders averaged more than 13 years of schooling (i.e., employees, on average, acquired some higher education).6 The figures reveal that all major northern cities had consistent employment losses in industries with Tower educational requisites. The heaviest job losses occurred in these industries after 1970. New York City, for instance, lost more than half a million jobs between 1970-1985 in those industries in which mean jobholder educational levels in 1982 were less than high school completion; the city added 268,000 jobs in those industries in which mean employee educational levels exceeded 13 years of schooling. Philadelphia, Baltimore, and St. Iiouis have also lost substantial numbers of jobs with low educa- tional requisites since 1970, with St. Louis experiencing a small Toss of jobs in those of its industries with high mean jobholder educational levels as well. Boston, on the other hand, added more jobs in industries with high educational requisites than it lost in industries with low edu- cational requisites, a tendency that has contributed to overall city 6 Industry employment changes in cities by average educational level of jobholders were estimated by synthesizing individual-level data on the school- ing completed by jobholders in detailed classified industries with data on the aggregate job changes that have occurred within each industry in each city. To measure the average educational level of employees in detailed urban industries, the March 1982 Current Population Survey (Bureau of the Census, 1982b) was used to compute the mean years of schooling completed by all central-city residents who were employed in two-, three-, and four-digit Standard Industrial Classification (SIC)-coded industries. Mean educational levels were then com- puted for each detailed industry classified in County Bwir~c~ Patterns. Aggregate job changes within each educationally classified industry were then traced be- tween 1959 and 1985 for the nine major cities (see Table 11) whose boundaries are either identical to or closely approximate those for which place-specific industrial employment data are available in County Busir~es~ Patterns.

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES TABLE 11 Central-City Jobs in Industries (in thousands) by Mean Education of Employees: 1959, 1970, and 1985 City and Educational Mean of Industry Number of Jobs 1959 1970 1985 Change 1959-1970 1970-1985 New York Less than high school 1,561 1,525 1,048 -9 -504 Some higher education 682 1,002 1,270 320 268 Philadelphia Less than high school 466 430 243 -36 -187 Some higher education 135 205 256 70 51 Boston Less than high school 180 189 137 -1 -52 Some higher education 117 185 261 68 76 Baltimore Less than high school 236 207 132 -29 -75 Some higher education 59 90 124 31 34 St. Louis Less than high school 221 210 117 -11 -93 Some higher education 61 98 97 37 -1 Atlanta Less than high school 130 179 182 49 3 Some higher education 42 92 143 50 51 Houston Less than high school 192 348 567 156 219 Some higher education 59 144 368 85 224 Denver Less than high school 92 120 130 28 10 Some higher education 42 72 132 30 60 San Francisco Less than high school 143 155 174 12 19 Some higher education 82 138 218 56 80 SOURCE: Bureau of the Census (1959, 1970, 1982b, 1985a). 177 job growth since 1970. By 1985 Boston had nearly twice as many jobs in industries with high mean employee educational levels than it had in industries with low mean levels of employee education. This fact would appear to indicate that Boston's economy has adapted especially well to the emerging postindustrial order, an adaptation that shout sustain that city's employment growth into the l990s.

178 John D. Kasa~da New York City likewise has a much higher percentage of its labor employed in knowledge-intensive service industries, implying that this city, too, should fare well in employment growth during the remainder of the 1980s. Employment growth in industries whose jobholders' educations averaged more than 13 years in 1982 was also marked in major cities in the South and West. Yet in contrast to major cities in the North, each of the four cities in the South and West gained jobs in industries with low educational requisites between 1959-1985. Even after 1970 these cities added jobs in their industries with low educational requisites, although Houston (Harris County) is the only city to experience a boom in jobs with low educational requisites during the 1970s and early 1980s. The oil price decline of the mid-1980s has cooled Houston's econ- omy considerably and has also depressed recent employment growth in Denver. At the same time the transformed service economies of Boston, New York City, and a number of other northeastern cities have led to a recent resurgence in their employment growth. Although job losses are continuing in manufacturing and other blue- colIar sectors of these cities, their vigorous information-processing sectors are more than compensating for blue-collar job losses, revers- ing decades of net employment decline. WIDENING DEMOGRAPHIC-EMP[OYMENT OPPORTUNITY MISMATCHES IN CITIES We have seen how jobs in industries with lower educational requisites have increasingly disappeared from northern cities to be partially replaced by information-processing jobs requiring substan- tial education or skills. Unfortunately, the northern cities that have lost the greatest numbers of jobs with lower educational requisites during the past three decades have simultaneously experienced large increases in the number of their minority residents, many of whom are workers whose limited educations preclude their employment in the new urban growth industries. In this section, we examine urban demographic changes and assess the role played by educational distributions of residents in urban structural unemployment. We begin with an overview of the changing size and racial/ethnic compositions of selected cities. Table 12 presents these demographic changes between 1970-1980 within the four largest northern cities (New York, Chicago, Philadelphia, and

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180 John D. Ka~arda Detroit). New York City, which experienced an overall population decline of more than 823,000 people during the decade, actually lost 1.39 million non-Hispanic whites. Approximately 40 percent of the loss of non-Hispanic whites in New York City was replaced by an infusion of more than 570,000 Hispanics, blacks, and "others" (mostly Asian minorities) during the 1970s. Chicago's demographic experience during the 1970s was similar to that of New York City. More than 50 percent of Chicago's minority population increase during the decade consisted of Hispanics. It is important to point out, however, that Chicago also experienced the third largest absolute increase of non-Hispanic blacks (111,422) of any U.S. city. By 1980, 57 percent of Chicago's resident population was composed of minorities. Philadelphia had the smallest aggregate population decline of the four cities. The number of non-Hispanic whites and non-Hispanic blacks in Philadelphia declined between 1970-1980; the number of Hispanic and Asian minorities increased. Philadelphia's substantial decline in the number of non-Hispanic whites, together with its net increase of 23,000 minority residents during the 1970s, raised its minority population percentage to 43 percent in 1980. Detroit experienced the highest rate of non-Hispanic white resi- dential decline of any major city in the country. Between 1970-1980, Detroit lost more than half of its non-Hispanic white residents. Con- currently, Detroit had the fourth-largest absolute increase of non- Hispanic blacks (102,427) of any city in the country, falling just behind Chicago in its rate of increase in black residents. Detroit's large increase in numbers of black residents and its sharp drop in non-Hispanic white residents, combined with modest increases in the number of "non-Hispanic others," transformed the city's residential base from 46 percent minority in 1970 to 67 percent minority in 1980. The Bureau of the Census's Current Population Survey (1985) is not designed to provide population size estimates by race and ethnicity for individual cities, so estimates for 1985 from this survey must be interpreted with extreme caution. Bearing this caveat in mind, aggregated summary statistics were computed for these four large cities and their suburban rings to obtain rough estimates of total and minority population shifts during the first half of the 1980s. The 1985 estimates suggest that New York City added more than 200,000 residents (luring the first half of the 1980s, that Chicago's population essentially stabilized, and that Philadelphia's and Detroit's losses slowed substantially. These results are consistent with independent

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 181 local and Bureau of the Census mid-decade estimates. For all four cities, however, the Current Population Survey aggregates indicate that their non-Hispanic white populations continued to decline while the minority populations of all but Philadelphia grew. By 1985 the Current Population Survey estimates suggest that minorities had become a demographic majority in New York City (54 percent) and had grown to 46 percent of Philadelphia's resident population, 61 percent of Chicago's, and 72 percent of Detroit's. The corresponding 1985 sample estimates of minority percentages in the suburban rings of these four cities were 13 percent for Chicago, 6 percent for Detroit, 9 percent for Philadelphia, and 20 percent for New York. The point at issue, however, is that all four central cities expe- rienced increasing minority dominance of their residential bases at the same time they were losing massive numbers of traditional blue- colIar jobs. This is particularly the case in the cities' manufacturing sectors. Between 1972-1982, the U.S. Censuses of Manufacturing show that Chicago lost 47 percent of its manufacturing jobs, De- troit lost 41 percent, Philadelphia 38 percent, and New York City 30 percent. Bureau of Labor Statistics data further reveal that manu- facturing job losses continued in these cities into the mid-1980s. For example, although New York City added 239,000 jobs in the period from 1980-1986 (a 7 percent overall increase), it lost 108,000 jobs in manufacturing a 22 percent drop in this sector (Bureau of Labor Statistics, 1986b). Manufacturing job decline is by no means the only pertinent mea- sure of urban blue-collar job loss, but it is a good general indicator of the continuing ability of a city to sustain large numbers of residents with limited educational attainment. Such figures, combined with the industrial employment data cross-cIassified by occupation and mean education of jobholders (Tables 10 and 11), imply that urban racial/ethnic differences in the years of education completed will have significant effects on the employment prospects of each group. Table 13 presents these differences, by race and sex, for the central cities of the four census regions. Bearing in mind the selective employment and demographic changes in large northern cities during the past 15 years, compare the 1985 distribution of education completed by white male residents of central cities in the Northeast and Midwest with that of black male residents in the same central cities. Note that the modal category of education completed by white men in northern cities is "completed 1+ years of higher education." The smallest representative category

182 TABLE 13 Number of Central-City Residents Aged 16-64 by Race, Sex, and Years of School Completed, 1985 John D. Kasarda Race, Sex, and Schooling Region Northeast Midwest South West White men Did not complete high school 944,964 743,105 950,060 825,810 Completed high school only 1,096,986 1,136,702 1,283,903 984,280 Completed 1+ years of higher education 1,205,944 1,291,168 1,869,914 1,694,782 Black men Did not complete high school 445,349 479,141 636,271 102,811 Completed high school only 366,932 404,121 574,247 151,870 Completed 1+ years of higher education 234,723 352,993 315,924 186,187 White women Did not complete high school 1,073,245 750,902 984,791 736,821 Completed high school only 1,486,641 1,435,176 1,486,740 1,085,916 Completed 1+ years higher education 1,128,071 1,150,689 1,720,628 1,469,271 Black women Did not complete high school 501,588 523,110 595,935 95,995 Completed high school only 555,176 543,309 704,946 154,321 Completed 1+ years higher education 351,755 393,324 575,190 169,732 SOURCE: Computed from Bureau of the Census (1985b). for white men residing in northern central cities is "did not complete high school." The education-completed distribution of white men is therefore consistent with the distribution of job changes classified by education. The opposite educational distributions hold for black men resid- ing in central cities of the Northeast and Midwest. Despite substan- tial gains in educational attainment during the past two decades, black men (16 years of age and older) in northern cities are still mainly concentrated in the education-completed category in which employment opportunities declined the fastest; they are least repre- sented in that category in which northern central-city employment has expanded the most since 1970 (see Table 11~. The consequence, to reiterate, is a serious mismatch between the current educational distribution of minority residents in large northern cities and the

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 183 changing educational requirements of their rapidly transforming in- dustrial bases. This mismatch is one major reason why unemploy- ment rates and labor force dropout rates among central-city blacks are much higher than those of central-city white residents, and why black unemployment rates have not responded well to economic re- covery in many northern cities. Let us now assess these concrete manifestations of mismatch. Table 14 presents the changing unemployment rates of whites and minorities, by sex, within the four large northern cities whose transforming demographic compositions were described in Table 12. It is immediately apparent that white unemployment rates in all four cities in 1985 were substantially below those of blacks and others. The gap is particularly large in those cities that lost the greatest percentages of their manufacturing bases during the 1970s and early 1980s (Chicago and Detroit). Note that in these two cities minority unemployment rates actually rose during the 1980s while their white TABLE 14 Unemployment Rater (percentage) in Selected Major Northern Central Cities by Race and Sex: 1976, 1980, and 1985 Whites City and Sex 1976 1980 1985 Blacks and Others 1976 1980 1985 New York Total 10.7 7.7 7.2 12.8 10.8 10.1 Men 10.9 7.5 7.4 14.4 12.6 11.2 Women 10.3 7.9 6.9 11.0 8.9 8.8 Philadelphia Total 7.9 7.7 6.5 19.2 20.4 12.0 Men 8.5 7.8 6.1 24.9 21.8 13.4 Women 7.0 7.6 7.0 11.7 18.9 11.4 Chicago Total 5.9 9.0 8.0 14.6 15.4 24.6 Men 6.6 9.8 S.8 16.7 17.7 25.8 Women 5.0 7.8 7.0 12.3 12.8 23.0 Detroit Total 11.3 16.2 13.3 15.0 26.2 30.3 Men 11.3 18.9 15.9 12.5 31.6 29.7 Women 11.3 12.4 9.5 18.2 22.2 30.9 SOURCE: Computed from Bureau of Labor Statistics, Geographic Profiles of Employment and Unemployment, 1976-1980; 1985 figures provided by the Bureau of Labor Statistics.

184 John D. Ka~arda resident unemployment rates fell. In point of fact the unemployment rates of whites in all four northern cities declined between 198~1985, along with the size of their white populations. One interesting figure in Table 14 is the rather sharp recent de- cline in the rn~nority unemployment rate in Philadelphia. Philadel- phia was the only major northern city listed in Table 12 that also experienced a decline in its black population between 1970-1980. The Census Bureau's Current Population Survey estimates suggest that this city's black population declined further between 198~1985, in contrast to New York, Chicago, and Detroit. Yet the minority unemployment drop is greater than might have been predicted by demographics alone. Even with this decline, however, Phitadelphia's male minority unemployment rate was still more than twice that of its white resident rate in 1985 (Bureau of the Census, 1985~. The Current Population Survey does not contain a sufficiently large sample to provide reliable estimates of unemployment rates by both race and education level for individual cities. Such detailed decomposition might explain the Philadelphia case. It is possible, however, to aggregate central-city samples by region and calculate central-city unemployment rates, by race and education completed, for each region. These computations, which are presented in Table 15, illustrate the increasingly important role education has played in urban employment prospects. Consistent with the mismatch thesis, one finds a precipitous rise in unemployment rates between 1969 1982 for those who have not completed high school. Within central cities in the Northeast and Midwest, the unemployment rates of black men without a high-school degree exceeded 30 percent in 1985. Indeed, for blacks in northeastern cities who lack a high-school de- gree, the economic recovery had no effect—their unemployment rates actually increased from 26.2 percent in 1982 to 30.4 percent in 1985. Another statistic revealing the growing importance of education for urban employment prospects is the substantial increase in the absolute gap in unemployment rates between the poorly educated and the better educated in 1969 versus 1985, regardless of race. For central-city white residents in all regions combined, the education- leve} gap in unemployment rates in 1969 was 2.7 (4.3 - 1.6) percent. By 1985 it was 11.9 (15.5 - 3.6) percent. For central-city blacks, the gap was 2.9 (6.6 - 3.7) percent in 1969 and 14.2 (27.3 - 13.1) percent in 1985. This widening gap over time between the unemployment rates of lesser educated labor and those of more highly educated labor appears within all four regions.

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186 John D. Ka~a~da In examining central-city unemployment rate changes across re- gions since 1982, note that although white male unemployment rate declines were generally consistent for all education categories, de- clines in black male unemployment were consistent only for those who had completed further years of education beyond high school. The relatively large 1985 unemployment rates among better-educated black urban men (particularly in the Midwest) ~ troublesome and difficult to interpret. The quality of education may play a role here, as could racial ceilings in the hiring practices of firms in major mid- western cities with exceptionally large minority percentages (e.g., Chicago and Detroit). Unemployment rates reveal only part of the picture of demo- graphic-economic opportunity mismatch and the corresponding dis- placement of many minorities from the urban economic mainstream. These rates do not include persons who have given up looking for work because they believe no jobs are available (discouraged workers) and those who want work but cannot hold employment for a variety of physical or personal reasons. Such individuals are not considered to be in the labor force and therefore are not counted among the unemployed. To measure the proportions of discouraged workers and other urban labor force nonparticipants, we can compute a statistic that taps the percentage of each city's men (aged 16-64) who are neither in school nor in the labor force. The numerator of this statistic is men aged 1~64 who are not classified as in school, employed, or unemployed. The denominator is the total number of males (aged 1~64) classified as employed, unemployed, and (excluding those in school) not in the labor force. Thus, the "in school" population has been removed from the "not in labor force" numerator and from the "labor force" plus the "not in labor force" denominator. Table 16 presents age-specific unemployment rates along with corresponding labor force nonparticipation rates, by race, between 1969-1985 for central-city male residents (aged 1~64) across the four census regions. This table reaffirms the sharp increase since 1969 in unemployment rates among young (aged 16-24) black men residing in central cities of the Northeast and Midwest. It also shows the large percentages of male working-age blacks in northeastern and midwestern metropolitan cities who are both out of school and out of the labor force. If one combines black unemployment rates with black labor force nonparticipation rates, the dire straits of black

Region, Race, Unemployment Rates and Age 1969 1980 1985 1969 JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 187 TABLE 16 Unemployment Rates (percentage) and Proportion of Male Central-City Residents (Aged 16-64) Who Are Not in School and Not in the Labor Force, by Region, Race, and Age: 1969, 1980, and 1985 Percentage Not in School and Not in the Labor Force 1980 1985 All regions White Aged 16-24 7.3 12.1 13.5 4.5 5.2 6.1 Aged 25-64 1.6 5.2 6.2 5.8 9.8 10.4 Black Aged 16-24 13.0 29.0 37.1 8.2 13.7 14.1 Aged 25-64 3.4 10.9 14.6 10.3 18.6 20.4 Northeast White Aged 16-24 7.4 16.5 16.7 6.9 5.5 9.4 Aged 25-64 1.6 6.2 7.1 6.9 11.9 12.7 Black Aged 16-24 12.0 33.8 43.5 12.2 19.2 24.5 Aged 25-64 4.8 12.5 13.1 10.7 17.7 19.0 Midwest White Aged 16-24 7.0 14.7 19.1 3.2 2.6 7.1 Aged 25-64 1.4 6.8 8.1 5.1 9.6 10.5 Black Aged 16-24 16.3 40.5 44.5 7.2 19.4 N.A. Aged 25-64 3.0 15.2 18.6 9.9 19.9 27.0 South White Aged 16-24 6.0 8.4 8.9 4.0 8.7 3.7 Aged 25-64 1.0 3.6 4.5 5.0 9.0 9.6 Black Aged 16-24 8.5 19.4 29.2 6.9 9.5 14.3 Aged 25-64 2.4 7.1 13.9 10.6 19.3 17.1 West White Aged 16-24 9.5 9.3 11.3 4.5 3.8 5.5 Aged 25-64 2.8 4.9 5.8 6.0 8.8 9.1 Black Aged 16-24 19.7 30.0 29.6 6.0 N.A. 9.3 Aged 25-64 4.8 9.1 11.7 9.3 15.0 17.4 NOTE: N.A. = not available. SOURCE: Bureau of the Census (1969, 1980b, 1985b).

188 John D. Canards men residing in central cities in the Northeast and Midwest may be quickly seen. Corresponding black male unemployment and labor force non- participation rates tend not to be as high in the central cities of the South and West. For one reason, recall that these cities have ex- perienced relatively fewer blue-collar job losses during the past two decades, and some cities have added large numbers of jobs in indus- tries that do not require substantial education in their work forces. Moreover, the West, which has the lowest combined unemployment and labor force nonparticipation rates for black men, is also the only region in which the educational distribution of black men is skewed toward the upper end (see Table 13~. It is not fortuitous, then, that black males residing in central cities of the West also showed the smallest increases in rates of unemployment and rates of labor force nonparticipation between 196~1985. CONCLUSIONS AND POLICY ISSUES A key policy construct developed in the preceding sections is "mismatch," which is defined as a discordant distribution of labor qualifications vis-a-vis the qualifications required for available jobs at a particular point in time. Mismatch has both nonspatial (nation- wide) and spatially specific (community) aspects. The nonspatial aspect results from transformations in the overall economy from an industrial to a postindustrial base and the corresponding shrinking demands for traditional blue-collar labor (Bell, 1973; Singlemann, 19783. A tacit assumption in much of the literature on postindustrial society is that, through the interplay of market forces, displaced labor will adapt to the transforming economy by "shifting" from one sector to another (e.g., from manufacturing to services). Appropriate skills will eventually be acquired or sufficient numbers of service-sector jobs (both Tow-skill and high-skill) will be created, absorbing the displaced and relieving the mismatch. This, of course, has been slow to happen in the United States, giving credence to those who argue that some structural unemployment will remain a permanent feature of the national economy. Spatially specific mismatches emerge in those areas in which transformations in local employment bases occur faster than their local labor can adapt, either through retraining or relocation. These mismatches are most apparent in larger, older cities in the North in which declines in traditional blue-collar industries and the growth

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 189 of information-processing industries have been rapid and substan- tial. So different are the skills used and the education required in these growing as opposed to declining urban industrial sectors that adaptation by the displaced is exceedingly difficult. This difficulty is concretely represented in the exceptionally high unemployment rates of those central-city residents who have not completed high school, regardless of race, and the widening gap over time between the central-city unemployment rates of the poorly and the better educated. It follows from the above that unemployment rates and labor force dropout rates will be higher for resident groups whose educa- tional distributions are inconsistent with the changing job opportu- nity structures of their localities. Such circumstances are particularly the case for black men (aged 16 or older) in major cities in the North who are most concentrated in the education-completed category in which matching local jobs are contracting (less than high-schooT degree) and least represented in the education-completed category in which local jobs are expanding (some higher education typically required). Exacerbating resident labor force job opportunity mismatches have been recent demographic trends in these cities. During the past two decades, northern cities that lost the largest numbers of blue- collar and other jobs with Tow educational requisites simultaneously added large numbers of poorly educated minorities to their work- ing age population. This demographic phenomenon, which contrasts sharply with that anticipated on the basis of market equilibrium models, leads to an important policy question: What is continuing to attract and/or hold large numbers of less skilled minorities in urban centers while employment opportunities appropriate to their skills are disappearing? To be sure, such factors as racial discrimi- nation, a lack of sufficient low-income housing in outlying areas, and the dependence of low-income minorities on public transportation account for a significant part of the explanation. There is also the vast urban underground economy that enables many of those dis- placed from the mainstream economy to survive. Indeed, for many who lack the educational, technical, or interpersonal skills for em- ployment in mainstream institutions, the inner city may provide the only environment in which they can stay afloat economically. It has been suggested elsewhere (Kasarda, 1983, 1985) that cer- tain public policies may also be anchoring disadvantaged persons in areas of rapid blue-collar job decline. These policies are based

190 Jot D. Kasarda on the seemingly reasonable principle of spatially targeting public assistance: areas of the greatest economic distress (measured by such factors as poverty rates and persistent unemployment) receive the largest allocations of funds for public housing, community nutri- tional and health care, and other locationally focused government aid (U.S. Department of Housing and Urban Development, 1978, 1980~. Formula-based community assistance programs have also been intro- duced such that the greater a locality's employment loss or other indicator of economic distress, the more federal aid it could receive (U.S. Department of Housing and Urban Development, 1980, 1984; Swanson and Vogel, 1986~. Thus, as the blue-collar employment bases of cities have withered, additional public assistance has been provided, serving as a partial subsistence surrogate for many of those displaced from the economic mainstream (for data, see Kasarda, 1985~. Although these policies helped relieve certain problems associ- ated with declining blue-collar job bases (e.g., the inability of the unemployed to afford private sector housing or adequate nutrition and health care), they did nothing to reduce the growing skills mis- match between the resident labor force and available jobs. In fact, such spatially targeted assistance may have inadvertently increased the mismatch and the plight of the poor by bonding distressed people to distressed places. For those with some resources and for the fortunate portion of that population whose efforts break the bonds of dependency, spatially concentrated public assistance may not impede mobility. But for many inner-city poor without skills, local concentrations of public assistance and community services can be sticking forces. With a low perceived marginal utility of migration relative to the opportunity costs of giving up their in-place assistance, they see themselves as better off staying where they are. Yet such immobility is detrimental to the longer term economic prospects of both the unemployed and the places in which they re- side. Imagine, for instance, what knight have happened in the first half of this century if the millions of structurally displaced southern- ers who migrated to economically expanding northern cities in search of jobs and a better life had been sustained in their distressed com- munities by public assistance. It is possible that many would never have moved, and the significant advances in income levels and living standards that the South and its out-migrants eventually attained would not have occurred.

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 191 Circumstances in today's distressed inner-city areas are roughly analogous. These areas are characterized by excesses of structurally displaced labor as their blue-collar job bases wither. Large concentra- tions of the unemployed who are increasingly dependent on welfare or the underground economy, or both, pose negative externalities (crime, alcoholism, drug abuse, loitering, vandalism) that further dissuade new businesses from locating nearby. Eventually, neigh- borhood deterioration and residential abandonment will probably thin out the population to the extent that spatially extensive pri- vate sector reinvestment becomes feasible. This process often takes a generation or more, however, and in the meantime it imposes heavy social and economic costs on the city and on those remaining. To alleviate the problems engendered by excesses of structurally displaced labor in inner-city areas of decline, some have suggested a national development bank, a new Reconstruction Finance Corpo- ration, enterprise zones, or government-business-labor partnerships that might ~reindustrialize" these areas or otherwise rebuild their blue-collar employment bases (see Butler, 1981; Hanson, 1983; Ro- hatyn, 1979, 1981; U.S. Department of Housing and Urban Devel- opment, 1978, 1980, 1984~. Such jobs-to-people strategies may be as unrealistic in terms of their objective as they are nostalgic. The government subsidies, tax incentives, and regulatory relief contained in existing and proposed urban policies are not nearly sufficient to overcome technological and market forces that are redistributing ur- ban blue-collar jobs and shaping the economies of our major cities. Economic advancement of cities and maximum job creation can best be accomplished through private and public initiatives that promote information-processing and other advanced service sector industries whose functions are consistent with the roles computer-age cities most effectively perform. Cities that are proactive in capitalizing on their emerging service sector roles should experience renewed overall employment growth, as, it has been noted, is already occurring in Boston and New York City. But if large portions of their residents lack the appropriate education to be hired by information processing and other white- collar service industries beginning to dominate urban employment bases, the plight of the poorly educated could further deteriorate. For this reason, and because demographic forces portend potential shortages of educationally qualified resident labor for the knowledge- intensive industries that are already expanding in the cities, there have been cogent calls from both the public and private sectors to

192 Johns D. Kasarda upgrade city schools and increase the proportion of urban residents who receive some higher education. Policies geared to improving the education of urban residents are essential to longer term solutions of mismatch and the social and eco- nomic health of cities. Such policies, however, are unlikely to alleviate the persistent unemployment problems currently facing a large num- ber of displaced older workers and yet-to-be-placed younger workers with serious educational deficiencies those caught in the web of ur- ban change. Such unemployment persists because the educational qualifications demanded by most urban information-processing in- dustries are difficult to impart through short-term, nontraditional programs. Qualifications for employment in these industries typically accrue through prolonged formal schooling during which marketable benefits accumulate as one passes through certifying educational thresholds (e.g., high school, baccalaureate, M.B.A., law degrees). It seems overly optimistic to think that sizable numbers of those displaced because of their educational deficiencies (especially older persons) will desire or be capable of reentering prolonged schooling programs to obtain the appropriate qualifications. The unplausibility of rebuilding urban blue-collar job bases or of providing sufficient education to large numbers of displaced ur- ban laborers so they may be reemployed in expanding white-colIar industries necessitates a renewed Took at the traditional means by which Americans have adapted to economic displacement that is, migration. Despite the mass loss of lower skill jobs in many cities during the past decade, there have been substantial increases in these jobs nationwide. For example, between 1975-1985, more than 2.1 million nonadrn~nistrative jobs were added in eating and drinking establishments, which is more than the total number of production jobs that currently exist in America's automobile, primary metals, and textile industries combined (1.86 million in 1985) (Bureau of I,abor Statistics, 1975, 1986~. Unfortunately, essentially all of the national growth in entry-level and other jobs with low educational requisites has occurred in the suburbs, exurbs, and nonmetropolitan areas, all of which are far removed from growing concentrations of poorly educated minorities. It is both an irony and a tragedy that we have such huge surpluses of entry-level labor in the inner cities at the same time suburban businesses are facing serious entry-level labor shortages. The inability of disadvantaged urban minorities to follow de-

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 193 centralizing entry-level jobs (either because of racial discrirn~nation, inadequate knowledge or resources, or government-subsidized an- choring) has increasingly isolated these minorities from shifting loci of employment opportunity and has contributed to their high rates of unemployment, labor force nonparticipation, and welfare depen- dency. Such isolation, blocked mobility, and dependency breed hope- lessness, despair, and alienation that, in turn, foster drug abuse, fam- ily dissolution, and other social problems that disproportionately af- flict the urban disadvantaged. For many young men, confined as they are in commercially abandoned ghettos in which stable husband-wife families are few, pimps, pushers, and toughs replace working fathers as role models. The cultural isolation of these young men and their sociaTization-by-the-street prevent them from developing the positive work values and interpersonal skills that are as important as tech- nical skills in obtaining and holding a job. The result is a powerful spatial interaction of social and economic malaise. To sum up the working thesis of this paper, America's jobs and people have moved about continuously. Now it appears that at least one segment of our population has become increasingly immobilized in culturally and economically isolated inner-city areas of decline. Without jobs and without much hope for jobs, the "new immobiles" are caught in a downward socioeconomic spiral that is unprecedented for urban dwellers in this country. To improve the mobility options of the urban disadvantaged and reduce their spatial isolation from job opportunities that are better matched with their skills, a number of strategies should be con- sidered. These might include: (1) a computerized job opportunity network providing up-to-date information on available jobs through- out the particular metropolitan area, the region, and the nation; (2) partial underwriting of more distant job searches by the unemployed; (3) need-based temporary relocation assistance, once a job has been secured; (4) housing vouchers for those whose income levels require such assistance, as opposed to additional spatially fixed public hous- ing complexes; (5) stricter enforcement of existing fair-housing aIld ~ e ~ ~ ~ ~ ~ ~ ~ talr-nlrlng laws; hi) publlc-ptlvate cooperative efforts to van pool unemployed inner-city residents to suburban businesses facing labor shortages; and (7) a thorough review of all public assistance programs to ensure that they are not inadvertently anchoring those with lim- item] resources to distressed areas in which there are few prospects for permanent or meaningful employment.

194 Johns D. Kasa~da The strategies enumerated above are not suggested as replace- ments for efforts to make cities more attractive to blue-collar indus- tries or imperative programs to improve the educational qualifica- tions of inner-city residents but rather as complements to them. All three general strategies (jobs-to-people, people-tojobs, and educa- tional upgrading) must be further complemented by national eco- nomic development policies that foster sustained private sector em- ployment growth. The economic health of cities is inexorably inter- woven with the health of the national economy. Moreover, programs assisting the retraining or relocation of the structurally unemployed will prove fruitless unless there are new and enduring jobs at the end of the training programs or moves. Thus, rather than subsidizing the relocation of industries to ur- ban areas of greater cost or Tower productivity (thus lowering the net national return on investment), cities should be encouraged to intro- duce economic development strategies aimed at creating productive, cost-competitive environments that would attract such industries. The prior appraisal of regional employment shifts suggests that there are a number of important competitive factors that city officials can influence such as local taxes and business regulations. They can also influence local policies regarding public schools, safety, and municipal service delivery, all of which might make the margin of difference for middIe-income families and businesses that are considering locating in (or leaving) the city. In other words, local officials are not helpless in determining the fate of their cities. They must think strategically about their own city's future, however, and candidly assess its competitive strengths and weaknesses in a changing national and international economic arena. They must implement policies that will be oriented more toward the future, building on their city's emerging strengths in this transforming arena. Let us take public infrastructure development policy as one brief example. Just as canals, railway terminals, paved streets, running water, and electric power lines once provided cities with comparative advantages for processing and transporting goods, successful cities of the future will develop computer-age infrastructures that will provide them with comparative advantages for processing and transmitting information. As a start, concerted efforts must be made to "wire" cities with fiber optics and broad-band cables so that businesses lo- cating in them can quickly and efficiently receive, process, store, and

JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES 195 transmit immense amount of data and information. Cities, like- wise, should take advantage of their economies of scale and provide municipally owned supercomputer facilities and teleports to service their growing information-processing industries on a cost-sharing ba- sis. They should also nurture national and international accessibility through their unrivaled airports (a unique comparative strength of major cities) by further improving these facilities and expanding airline connections for business people and tourists. To repeat, the destinies of cities are not entirely shaped by exter- nal forces beyond their control. All have enormous latent strengths that can be built upon in constructing brighter urban futures. Even those of our older industrial cities that have experienced the greatest population and job losses over the past two decades have a rich archi- tectural heritage, diverse ethnic character, and urban ambience that cannot be replicated in most newer Sunbelt cities. Recognizing and exploiting such strengths will require foresight and action on the part of local leaders. In the end, the economic and demographic future of cities will be determined less by national urban policies than by how effectively local leadership fosters new urban roles and meets the needs and aspirations of various population groups and firms. ACKNOWLEDGMENT Research reported herein was supported, in part, by a grant from the National Science Foundation. Tabular assistance was provided by Andrea M. Bohlig, Holly L. Hughes, and Michael D. Irwin. This paper wan originally titled "The Regional and Urban Redistribution of People and Jobs.n REFERENCES Bell, Daniel 1973 The Coming of Po~t-Indwtrial Society. New York: Basic Books. Bergman, Edward M., and Harvey A. Goldstein 1983 Dynamics and structural change in the structure of metropolitan economies. Journal of the American Planning Association 49~3~:263-279. Bluestone, Barry, and Bennett Harrison 1982 The Deindwtrialization of America. New York: Basic Books. Bureau of the Census 1953 County Business Patterns. Machine-Readable Files. Washington, D.C.: U.S. Department of Commerce. County Business Patterns. Machine-Readable Files. Washington, D.C.: U.S. Department of Commerce.

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This up-to-date review of the critical issues confronting cities and individuals examines the policy implications of the difficult problems that will affect the future of urban America. Among the topics covered are the income, opportunities, and quality of life of urban residents; family structure, poverty, and the underclass; the redistribution of people and jobs in urban areas; urban economic growth patterns; fiscal conditions in large cities; and essays on governance and the deteriorating state of cities' aging infrastructures.

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