Skip to main content

Chapter Summary

Katz, Michael (2001). Poverty and Inequality in the New American City, Chapter 2 in The Price of Citizenship: Redefining the American Welfare State. New York: Metropolitan Books.

Katz presents the post-industrial spatial development of American cities. Katz argues that revolutions in economy, demography and space have shaped the new American city, reinforcing inequality and creating new forms of poverty. He asserts that economic changes shaping the American city transformed labor markets in ways that heightened the risks faced by the poor that the welfare states should have helped to reduce. (33)

Labor Market Restructuring: After presenting a brief history retracing the roots of the new American city, Katz points out that the negative impacts of deindustrialization on labor market were not realized until the 1960s as businesses competing in the global economy reduced the workforce, wages, and benefits. Large cities increasingly assumed new responsibilities in housing, social services, medical care, and education (34). At the same time, a new generation of urban economists argued, the people and services essential to commerce and finance continued to concentrate in cities (35). Y, the most dynamic sectors of the economy increasingly generated poorly paid jobs that lack benefits and lead nowhere (36). This has resulted in the informalization of labor market undermining job security (37).

Demography: Deindustrialization was accompanied by increasing income inequality. Gains in productivity were accompanied by falling real wages. Those reaping the benefits of growth were shareholders and senior management. Growing income inequality also translated into the growth of poverty (38). Black migrants and Hispanic immigrants, disproportionally represented in low-wage jobs were especially hard hit. These trends, in conjunction with the devolution of welfare program responsibilities to the sates placed increasing pressures on the ability of states to provide adequate assistance (41). While whites moved out enticed by inexpensive suburban housing, cheap government-backed mortgages, and the interstate highway system (40), black migrants and immigrants stemmed the population flow out of the American city.

Space: Municipal governments devised policies, such as urban renewal and highway construction, to spur economic development. Highway instead of channeling traffic downtown, gave further impetus to the growth of suburbs. Furthermore, highway construction in conjunction with urban renewal destroyed poor minority communities, displacing residents and disrupting lives (50).

Politics: Finally, the reorganization of space changed the balance of political power. Suburbs are now where most Americans live; and since 1975, they represent the largest voting bloc in Congress. As separate jurisdictions, they act as mini-governments empowered to define land use, organize institutions, and tax residents. The subsequent disparities between suburban and city tax bases have translated into dramatic inequalities and spatial economic and racial segregation (45). This demographic and political spatial shift in the end supported the rise of conservative politics. The new American city, Katz argues, is the result of political choices as well structural transformations. (56).