Rethinking Urban Policy Urban Development in an Advanced Economy (1983) / Chapter Skim
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2 The Economy and Cities
2 The Economy and Cities
Pages 11-37
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From page 11... ...
Later, major innovations in industrial technology electricity, petroleum, chemicals, and, ultimately, the automobile were matched by new urban technologies steel girder construction, the elevator, the electric streetcar, and the bus and fostered further changes in the way cities were built and functioned (Eberhard, 19661. The rise of the business corporation, the industrial trust, national and regional financial institutions, private philanthropy, labor unions, free public education, and the municipal civil service represents the beginnings of the modern service sector.
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From page 12... ...
Some industry analysts suggest that projections based on past trends do not adequately account for the discontinuities in technology, the organization of work, and the internationalization of capital and labor markets. They expect that soon after the turn of the century, manufacturing employment in leading industrial nations will decline almost to the levels that agricultural employment in the United States reached by 1950 less than 10 percent of the labor force (Drucker, 198 1:2371.
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From page 13... ...
Increasingly, such functions can be located in the suburbs, in smaller nonmetropolitan areas, or even in other countries. That these activities can be dispersed in order to take advantage of lower land costs, lower labor costs, less labor-intensive production processes, and better market access has also accelerated the decentralization
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From page 14... ...
The slowing of population growth and the consequent aging of the population, the increase in women's participation in the labor force, smaller households due to declining birth rates, delayed marriages, the increased number of divorces, and greater longevity have affected cities in several ways. The population density of the older urbanized areas has declined in both central cities and close-in suburbs.
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From page 15... ...
Because the population is aging, the generations that will replace the postwar baby boom generation are smaller, different regions and urban areas have substantially different age profiles and fertility ratios, and significant differences are developing among the labor forces of urban areas and regions of the country (Berry, 1981; Jackson et al., 19811. Another demographic factor that reinforces the economic forces restructuring the economy is increased levels of education.
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From page 16... ...
To understand the full significance of the adjustments and of the capacity of cities to make them successfully, we need to examine more closely two fundamental structural changes that are likely to continue well into the next century. The first is the shift in the principal source of employment from the extractive and transformative industries to service industries.
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From page 17... ...
Producer services mainly include industries that provide services to producers of goods or that are concerned with property matters. Like distributive services, the industries in this category provide intermediate services between the extractive and transformative industries or between them and other sectors.
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From page 18... ...
Central administrative office Finance, insurance, and real estate (FIRE) Business services Legal services Membership organizations Miscellaneous professional services Social services Nonprofit services Health Education Retail services Consumer services Hotels and other lodging places Personal services Auto repair, services, and garages Miscellaneous repair services Motion pictures, amusements, and recreation services 01, 01, 07-09 10-14 15-17 20-39 40-49 50-5 1 From each of the 10 basic SIC codes 60-67 73 81 86 89 83 80 82 52-59 70 72 75 76 79, 84 Private households 88 Government and government enterprises 91-97 SOURCE: Adapted from Noyelle and Stanback (1983)
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From page 19... ...
Consumer services, which are often assumed to have grown rapidly in response to the increased affluence of American consumers, have not in fact done so, although some growth is projected for this sector in the 1980s (Personick, 19811. Nonprofit and Government Services The growth of nonprofit services reflects the rapid expansion of education services in the l950s and 1960s.
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From page 21... ...
The Growth of Producer Services The most important finding from this examination of the changing structure of the economy is that producer services play a major role in the expansion of the service economy. Producer services include those industries that provide intermediate services to firms producing goods or other services.
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From page 22... ...
Consumer Services When a closer look is taken at consumer services, some similar trends appear. The consumer services that have grown steadily are those most susceptible to large-scale centralized management but decentralized delivery of a standard service, such as hotels, food franchises, and travel services.
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From page 23... ...
SOURCE: Adapted from Knight (1977~. employ a larger percentage of white-collar workers and service workers than the nonservice sectors, but it would be a mistake to assume that every white-collar or other service job requires a high degree of knowledge.
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From page 24... ...
What is significant is that services employ more "knowledge" workers—that is, workers whose jobs require a high degree of skills and training than nonservices, and those services that are growing the fastest (producer services, nonprofit services) , as well as government services, tend to have the highest proportions of professional, technical, and managerial occupations.
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From page 25... ...
25 A at ct A ~ au at cdo 'e u)
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From page 26... ...
The large number of service workers in the nonprofit sector reflects subprofessional jobs, which for the most part are not on career ladders that allow promotion into professional ranks (Stanback et al., 1981:66-881. There is some evidence that a substantial amount of "de-skilling" is taking place through division of some of the most complicated jobs in the economy into components that require less skill or training (Rumberger, 19814.
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From page 27... ...
While the overall profile of occupations is projected to remain fairly stable during the decade, the greatest rates of growth are expected in professional, technical, and related occupations and in service workers. Operatives and laborers, the traditional entry points to the labor market, show the least growth.
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From page 28... ...
28 Ct ho · _4 Ct S C)
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From page 29... ...
and service workers (orderlies, food and laundry workers) .7 This structure offers little chance for mobility between occupational categories and very short career ladders within each occupational group.
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From page 30... ...
Sales and clerical positions are viewed as being on a separate track, with little opportunity to move into a management position unless one enters these positions as a college trainee.8 Thus increased college attendance by minorities has been important in offsetting the tendency toward a dual labor market. In contrast to manufacturing and construction jobs, which in the past provided entry into the labor market for a large proportion of workers, entry-level jobs in the services today tend to be poorly paid and poorly sheltered and to offer less opportunity for future income and occupational progress.
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From page 31... ...
The lower-level occupations tend to be part time, less sheltered than either the high-level service jobs or traditional manufacturing jobs, and filled by women. These changes in the structure of employment produce problems, both of entry into the labor market and in career advancement for those who are poorly trained or educated.
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From page 32... ...
This implies that the earnings per worker in manufacturing will rise faster than average; thus, those people and places that can survive in the contracting manufacturing sector will be well rewarded. Also, while the proportion of the labor force employed in manufacturing can be expected to decline, the absolute number of jobs in manufacturing industries may increase slightly (Bureau of Economic Analysis, 1982; Personick, 1981:38-391.~° ~° Even the low-growth scenario of the Bureau of Labor Statistics projects actual growth in all major sectors except private household employment (Personick, 1981:38)
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From page 33... ...
Almost all urban areas have some jobs that the local labor force cannot fill and some workers who cannot find jobs that can use their skills (Cetron and O'Toole, 19721. Because of the historic concentration of specialized industrial production in particular urban areas, the restructuring of manufacturing produces local labor surpluses, whether the direct cause is technological change within an industry or product substitution in the marketplace, as in the replacement of steel with aluminum and plastics in construction and manufactured goods.
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From page 34... ...
Department of Housing and Urban Development, 1982) argues that the most serious urban economic problems stem from structural changes in the economy, but the report recommends that policy rely primarily on a cyclical remedy: the economic recovery program of the administration.
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From page 35... ...
13 Other factors are also important: the migration of older people with considerable amounts of retirement income to more benign climates offered by Sunbelt states, higher fertility rates, lower participation rates for women in the labor force (although the rates are quite high in some regions, such as the South Atlantic) , and the presence of large numbers of immigrants who provide a pool of labor at relatively low cost for some kinds of enterprises.
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From page 36... ...
, and Boston, suggest that the industrial mix and the diversity and quality of the metropolitan labor market may be far more important factors in the capacity of local economies to adjust to structural changes than is mere regional location (Rees, 19801. All regions have growing, stagnant, and declining urban areas.
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From page 37... ...
Once primarily influenced by their transportation networks, they are now experiencing a new set of changes made possible by the substitution of communications for some kinds of transportation. The economy of an urban area, as subsequent chapters discuss, may therefore depend for its vitality on invisible relationships that reach far beyond political boundaries, local markets, and commutation patterns.
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