Wednesday, March 20, 2013

The rise and fall (and rise?) of the Hartford Empire

The rise and fall (and rise?) of the Hartford Empire 

Attempts at reducing regional inequality in the greater Hartford area 

by Rozalia Kepes

The 20th century brought unseen inequality on Hartford county in Connecticut: by today, a ring of wealthy White suburbs surrounds an extremely poor, predominantly Black and Hispanic inner-city area. After years of unsuccessful interventions, downtown Hartford might stand a chance at regaining its once buzzing economic life thanks to a new set of regional policies. 

The state of Connecticut is a controversial one – while according to per capita income it is the 4th richest out of the 50 states in the U.S., its inequality, measured by the Gini coefficient, is the 2nd greatest. (No.1 is – who would have guessed? – New York). Inequality is even more pronounced in Hartford County, where the per capita income of the most affluent town is almost 4 times as big as that of the poorest: the state capital, Hartford. How did the 20th century reduce Hartford, once the richest city in America, to – in the words of New York Times columnist Paul Zielbauer – “the most destitute 17 square miles in the nation's wealthiest state”? And more importantly: is there any hope for recovery? 

The glory days of Hartford came to a sudden halt in the 1950s, when – because of a huge reduction in transportation costs due to an increase in car ownership – the wealthy white inhabitants started to move out of the city center. By today this trend has resulted in near-complete social stratification with low-income minorities living in tiny flats under appalling conditions in downtown Hartford, and the fortunate whites residing in grandiose mansions in the suburbs. The map below, showing the percentage of whites living in each Hartford region in 2010, illustrates this: the tendency is that the closer a region is to the center, the smaller the percentage of whites are. (The University of Connecticut offers a great tool where fascinated students can discover how racial segregation has evolved.)

Matters got even worse after 1991, when the Governor changed the tax system in a way that was mostly favorable for investment income. This resulted in a great number of hedge funds moving to the state, which, among other things, changed the structure of labor demand rapidly. The manufacturing industry, which used to be happy to employ the cheap and unskilled immigrant workforce, were now going downhill, while skillful businessmen and insurance company agents were in great demand. This was a change to which most Hispanic immigrants could not adjust: with a general low level of education and the language barrier, inter-sectoral mobility was (and still is) extremely low in the area. The numbers need no further explanation: in 1999 poverty rate in Hartford County (which includes Hartford and its suburbs) was 9%, while that of Hartford itself was a shocking 30%.

Ever since the mid-1990s, policy makers and NGOs have been designing projects aimed at revitalizing downtown Hartford, such as residential improvements, or the building of a football stadium, with more or less success. Some projects, such as the Knowledge Corridor between Hartford (CT) and Springfield (MA), intended to attract and benefit from the rich human capital of the surrounding towns, which have an outstanding density of universities and hospitals. So far the most promising of these has been the launch of the grandiose Adriaen’s Landing project in 2001, which was a complex plan to breathe new life into the city center. This consisted of the Connecticut Convention Center, the greatest meeting space between New York City and Boston, to which was attached a huge hotel, the Connecticut Science Center, and Front Street, a passage full of retail and entertainment. Or at least this was the plan.

In reality, however, constructing big buildings is not – or not necessarily – enough. Regional economists call this the threshold effect: policy actions may or may not be effective depending on whether their amount surpasses a certain critical mass, which in turn depends on the initial point of the economy. Therefore, one of the reasons why so many expensive projects failed in their attempt to improve Hartford is that the city started from such a low economic level that it needs an unusually high amount of intervention before one can reach the break point.

The most recent initiative attempted to get a handle on the problem from the opposite direction by trying to improve the existing human capital of Hartford rather than to attract well-educated people. The “Social Justice Plan”, set in motion in 2012 by community activists, is aimed at reducing the health and economic inequalities as well as the achievement gap in education. As it is explained on their website, they encourage locals to get involved in any of their Task Forces, which are forums focusing on issues such as literacy education, afterschool programs, healthcare R&D, employment and entrepreneurship training, and child care subsidies.

Based on regional growth theory, such a project might be the cure Hartford has been longing for. The prosperity of a city is usually determined by its physical geography and by the policy measures taken. Hundreds of successful years are the proof that Hartford has great geographical endowments, but after these doomed decades it is in serious need of some policy enhancement. Luckily, by focusing on education, healthcare, and the building of the new convention center, it might on the right track, because investing in human capital is said to be the most robust way to promote growth. Still, while the increase in the city’s human capital can boost productivity – which in turn raises wages – these measures are advised to be complemented by improvements of infrastructure, innovation, and agglomeration. Therefore, the “Social Justice Plan”, combined with the planned 2015 opening of a Knowledge Corridor high-speed intercity rail line, has enormous potential for giving real meaning to Hartford’s nickname: “New England’s Rising Star”.


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