When it comes to municipal well-being, Detroit still seems to be the point of reference when it comes to talking about bankruptcy and being flat-out broke.
Melissa Harris of the Chicago Tribune writes:
Chicago isn't Detroit — and it's not going bankrupt.
When Moody's Investors Service recently downgraded Chicago's debt to junk status, the decision equated to a 5 percent chance, in Moody's view, of Chicago defaulting on its bond obligations in the next three years, meaning bondholders wouldn't get back all they have lent the city.
Admittedly, the numbers don't make Chicago look like nirvana, but they are far better than Detroit's in the year of its bankruptcy. The chances of Chicago going bankrupt are more like zero-point-zero.
She later goes on to write:
Like many industrial cities, Chicago lost population as whites fled the city for the suburbs. Detroit's population fell 61 percent from 1950 to 2010. Chicago's fell 25 percent during the same period. Chicago's people didn't flee the way Detroit's did.
And Chicago's economy didn't collapse in the same way, in large part because its tax base is far more diverse and therefore more resilient.
There's a reason Mayor Rahm Emanuel often repeats that no single industry employs more than 14 percent of Chicago's workforce. That statistic helps explain why Chicago has plenty of businesses and residents to tax. We're not dependent on a single industry, like auto manufacturing.
