With Chicago in the spotlight during the DNC, how is the city’s economy faring?
With Chicago in the spotlight during the DNC, how is the city’s economy faring?
This year’s Democratic National Convention is taking place in solidly blue Chicago. But economically, the city has fallen behind. Chicago has one of the highest unemployment rates of any major U.S. city: 6.2%, which is far higher than the national rate.
Employers like Mary Aregoni, owner of Saigon Sisters restaurant, are looking to both parties in this election for policy solutions.
“The latest one — about not taxing tips — my staff is going to be happy about that,” she said.
But on top of mind for Aregoni — along with higher costs — is loan sharks, as she calls them.
“I get called every day about, ‘I can give you a line of credit, I can give you this and this and this,’ but it’s like 20%, you know, 30% or 50%,” she said.
Before COVID-19, she might have taken a bridge loan during a slow month. Now, she has to think twice. That means business is precarious, and she can’t expand or hire.
“More access to low interest capital would help,” Aregoni said.
This problem may not be unique to Chicago, but what is unique is a heavy reliance on service sector jobs, according to William Towns, a professor at Northwestern University’s Kellogg school of management.
“Those industries — restaurants, retail, those sorts of things — really haven’t come back,” he said. “And so when you have an economy that has a lot of that in the employment sector, then you have an increase in unemployment.”
An additional challenge is that Chicago has been one of the most segregated cities in the country.
“There are pockets that are really sort of challenged and is really sort of bringing down, you know, the overall economic outlook of the entire city and region,” Towns said.
Mary Aregoni wants political parties to talk more about helping small businesses — everywhere around the country. But Chicago’s economy, the challenges are a lot more complicated.
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