To Grow or Not to Grow, That Is the Question

Mechanically there is an inextricable interaction between the economy and our political system. The political-economic model functions similarly to two interlocking gears whereby any movement in one induces movement in the other. To build a thriving city, these two forces must be engineered to work together rather than in conflict. In Part II, I outline the core principles and design needed to build a healthy, vibrant, and growing city—setting the stage for Part III, which explores how to put those principles into practice.

If you're not growing, you're dying. This is true across time, across space, and across different scales of civilization. It is true for cities, states, nations, and empires. Much as other factors are at play, growth itself is a key and foundational driver of opportunity, prosperity, and a broad-based improvement in a society's quality of life. While it should be pursued responsibly, growth must be elevated to a key strategic priority if a given civilization or society wishes to succeed.

Chicago is not growing. Quite the opposite! We have had a generally declining population trend since a 1950 peak of around 3.6 million compared to today's roughly 2.7 million. ¹² We've lost 900,000 people, or 25%, of our population, in the last 75 years. In the last five years alone, Chicago has grown the slowest out of the largest 25 metro areas in the US. ¹³

There are two key drivers of growth: population growth and productivity growth. From the earliest days of Chicago to the 1950s, much of the positive growth could be attributed to population growth itself with tailwinds of general productivity growth during the industrial era. From the 1950s until the early 2000s, Chicago's economy grew and prospered due largely to productivity growth in the workforce ¹⁴ despite decades of population decline. Our economy evolved and adapted with better and faster transportation systems, an increasingly large demand across a connected national economy, manufacturing, the financial system and markets, the rise of technology, and many more sectors that varied over the decades. This economic growth for Chicago came amidst the overall population decline. As the productivity growth rate was higher than the population decrease rate, the economy continued to experience a net positive economic growth rate.

Since the Great Recession era, however, productivity rates are fluctuating more and are generally lower than mid-20th century rates. Pair that with a flat or decreasing population and we find ourselves in a cycle of economic stagnation and decline. It's when both population and productivity are fluctuating, stagnant, or negative, that we start to feel the effects more acutely.

Looking at the last five years, the economy in Chicago has grown at a much slower rate of just under 1% per year compared to 2.9% for the US economy as a whole. ¹⁵ We are growing a full three times slower than the US which leaves Chicago's relative growth, economic prosperity, and share of the national economy weakening and shrinking. Other cities and states have stepped up to address this issue while Chicago remains stuck squabbling over a smaller and smaller pie and fighting over who gets what rather than working together to build a bigger pie for all to enjoy.

In addition to the impacts of population and productivity on the overall economy, the fiscal situation and management can either be an accelerant or an inhibitor to the growth of the city. Chicago's corporate fund budget has exploded by over 50% from $4 billion in 2021 ¹⁶ to more than $6 billion in 2026. ¹⁷ This unchecked spending compromises the financial integrity of city operations and directly hurts affordability for hardworking residents. Furthermore, it burdens small businesses and job creators, making it increasingly costly to start, operate, and grow in the city.

Everyone is negatively impacted when the city spends more than it has, can't reign in unsound practices that lead to reckless debt, and turns around and asks the people of Chicago to foot the bill with more and more taxes. The government needs to respect taxpayer dollars by finding ways to deliver high-quality services at an affordable, efficient cost. People don't mind paying taxes when they feel like the government is responsible with their hard earned money, but they will fight tooth and nail against more spending and higher tax bills if all they see is waste, fraud, and abuse and a political class cashing in to promote themselves and their hand-picked favorites instead of fixing potholes, making sure streets are safe, and delivering on the basic social contract.

Our city's finances make life hard for all and near impossible for some. Thus, the current fiscal situation hampers and suffocates growth instead of enabling it. It doesn't have to be that way. It's not sustainable, it's crushing us with one of the highest tax rates in the nation, and it directly and unequivocally pushes people to leave - whether it's a single parent working two or three jobs to make ends meet or a high-paid, two income earning household. Cost and affordability is relative, but one thing virtually all Chicagoans agree on is it's too dang expensive to live here.

Described above is what I like to think of as the two interlocking gears of our political-economic system: The Virtuous Growth Cycle and the Fiscal Flywheel. I have outlined the current state of Chicago's gearing mechanism slowing to anemic growth rates and a dereliction of fiscal responsibility. Yet with a clear-eyed diagnosis of our current state, we can start to work together to stop the decline of our economy and poor fiscal management and start improving both gears to accelerate our growth, become more disciplined financial stewards of people's tax dollars, and ultimately bring about a higher level of affordability and opportunity for all in our city. Let's dive into each.