Chicago economy lags behind rest of US, 22-year study shows

You may or may not be surprised that the Chicago area has been gaining fewer jobs than the national average, given the last recession. What may surprise you is the fact that this is part of a trend that began well before 1960.

The problems of basic industries are partly to blame for this. But the Chicago area's job growth has lagged the national average in virtually every area of the economy.

Even the boom in Chicago's commodity exchanges has failed to keep the metropolitan area in step with the nation's growth in the finance, insurance, and real estate sector.

Other large Northern industrial urban areas have not fared as badly. Minneapolis-St. Paul has done well. Even St. Louis and Detroit outpaced the Chicago area's growth from 1960 to 1982.

These are some of the findings from a soon-to-be-released study commissioned by the Commercial Club of Chicago.

The study reveals a city and surrounding metropolitan area with deep, pervasive challenges that include: insufficient stimulus for new business; a costly business climate; a negative image to the outside world; and a net outflow of federal funds.

''We've got to do something to get (the federal funds) back in line or Chicago will be a difficult place to live,'' says Hugh Reams Jr., who, as manager of the consulting division of Arthur Andersen & Co., has had a major hand in the study.

Just as important, the federal funds coming in have been the wrong kind. These have been transfer payments - such as welfare, social security, and agricultural subsidies - and not the development-oriented funds that could encourage a lot of job growth.

The study could mark an important change for Chicago area.

As a first step in a long-range, job-creating initiative, the Commercial Club hopes the study will foster cooperation among top business, political, and academic leaders in the area. Illinois Gov. James Thompson, Chicago Mayor Harold Washington, and officials of some of the largest Chicago corporations are involved.

Up to now, cooperation has been difficult.

The expansion of O'Hare International Airport, for example, has been a source of serious friction not only between the suburbs and the city, but between mayor and the majority faction of the City Council as well.

To create jobs - in the suburbs and the city - at least six proposals are being discussed, Mr. Reams says, which would build on the metropolitan area's existing strengths.

These include: encouraging the area's health-care industries; developing an information and software technology center around companies like AT&T and area universities; stimulating emerging enterprises; assisting small businesses; creating a strategy for strengthening the area's financial services; coordinating the marketing of Chicago to reverse negative perceptions of the area.

''I'm very optimistic,'' Reams adds. ''Business, education, labor, even government are communicating.''