People often link Austin, Texas, and Ann Arbor, Michigan, as sister cities. Both are home to anchor universities with leading research institutions and quasi-professional college football teams; both are politically liberal enclaves with large student populations and a small-town feel.
But on at least one key metric—labor force participation rate—Austin has more in common with Salt Lake City, Utah. And when it comes to housing standards, Ann Arbor is closer in kind with Knoxville, Tennessee.
A new tool just launched by the Federal Reserve Bank of Chicago looks at the notion of sister cities from a more detailed perspective than the comparisons that residents sometimes reach for (“Hook ‘em Horns!” vs. “Go Blue!”). The Peer City Identification Tool is like a DNA test for civic data, allowing users to tell at a glance where certain cities’ specific interests and challenges align, and where they deviate—in effect, who their real siblings, cousins, and other relatives are.
Susan Longworth, senior business economist for the Community Development and Policy Studies Division at the Federal Reserve Bank of Chicago, says that the tool is the result of a series of some 300 interviews with leaders of cities across the Midwest and Northeast.
”They kept coming back to us, asking questions along the lines of, ‘How are we doing?’ or ‘Where do we rank?’” Longworth says. “We felt really strongly that it wasn’t the role of the Fed to tell people how they’re doing or pass that kind of judgment on them. But we wanted to make that data available to those leaders so they would be able to assess for themselves, to discover for themselves, who their peers might be.”
The tool emerged from a multi-year study conducted by the Chicago Fed to examine 10 post-industrial cities across Iowa, Illinois, Indiana, Michigan, and Wisconsin. Each of these cities, two for every state, had a common grounding: In 1960, each city’s population was around 50,000, and manufacturing accounted for at least 25 percent of employment. Some have since thrived. Many are struggling.
Rather than simply publish a report, the Chicago Fed decided to present the data they collected through a mapping tool, using four vectors: equity, resilience, outlook, and housing. “Resilience” focuses on economics and the labor market: unemployment, median family income, and labor force participation, plus changes in those metrics over time. “Equity” involves social factors: dissimilarity indexes, for example, to measure segregation.
Some of the data points are particular to cities that were small 50 years ago. Using wage inequality—rather than income inequality—reflects the fact that many medium- and high-income jobs have disappeared from these cities, says Mark O’Dell, research analyst for the Chicago Fed. While there’s growth at the high end for jobs with a college degree and growth at the low-end for service-sector jobs, the middle is missing. And for low-income households, total income may include sources other than wages, such as social support—making wage inequality a more revealing measure for capturing job polarization and middle-income stagnation.
Back to our two Big State cities: In Austin, about 38 percent of the city’s housing units were built before 1980. For Ann Arbor, that figure is 70 percent. They’re otherwise similar places, with values that align for homeownership rate, percentage of rent-burdened households, and home-value-to-income ratio. But they diverge sharply on labor force participation rate, age of housing, and above all, recent population growth—Austin’s soaring numbers land it in the exclusive company of Raleigh, Durham, Charlotte, and Orlando.
Perhaps that’s not so surprising about Austin. But some of the findings in the Midwest are unexpected. The Chicago suburb of Aurora, Illinois, enjoyed a 40 percent boost to its population between 2000 and 2015. Its population is 25 percent foreign born, mostly Latino, linking it to Bakersfield, California, and Fort Worth—two cities with similar outlooks, according to the Peer City Identification Tool.
“The common narrative out there really is that manufacturing has decimated these Midwestern cities,” Longworth says. “We wanted to understand that a little more. There are more nuances to this story.”