Part One: The State of America's Cities

For more than 200 years, America's cities have been testaments to our innovation and monuments to our progress. They have been gateways to generations of travelers and doorways to millions of people who seek to live in freedom. They have been ports of entry for trillions of dollars of products and ports of exit for some of the most breathtaking technology the world has ever known. They remain as centers of science and engineering, the axis of commerce and banking, and the lifeblood of arts and culture.

And in 1998, America's cities are more relevant and perhaps more vital to the state of our union than they have ever been. Today, metropolitan regions -- and the cities that drive them -- are home to 85 percent of America's people and nearly 80 percent of its jobs. Since 1992, they have generated more than 86 percent of the Nation's total economic growth. More than one-third of America's growing minority population are educated in fewer than 50 urban school districts. And an overwhelming majority of America's great colleges and universities call central cities home. All told, in 1998, the arithmetic of urban America is clear and unquestionable: if America is going to remain strong in the 21st century, our cities must be strong.

Today -- fewer than 600 days away from the beginning of that new century -- is a particularly important time to ask about the state of America's cities. We do so at a time of profound optimism in America. Guided by the social and economic strategies of the Clinton-Gore Administration, America today is both strong and at peace. The economy is breaking new records, opportunities are increasing for many, the Federal budget is in surplus, and consumer confidence is at a 30-year high. And after more than 20 years of erratic fits and starts that saw the fraying of much of the social and economic fabric of urban America, our cities are -- in many ways -- sharing in America's economic comeback. The record is clear: while jobs, incomes, and homeownership are all increasing in our Nation's cities, unemployment, crime, welfare, and fiscal unrest are decreasing in most cities.

Rarely have cities and the Nation been better positioned to tackle the challenges that remain. As Robert Kennedy observed more than 30 years ago, while America's cities are the center of the possibilities of American life, they are also the centers of the problems of American life. As reported in last year's The State of the Cities report, cities continue to find themselves on the losing side of fundamental structural and demographic trends that have reshaped the face of metropolitan America over the past 30 years. Namely, cities continue to be home to an intolerably high and concentrated level of poverty and a shrinking middle class.

This report finds that cities face three fundamental challenges -- or opportunity gaps -- that will ultimately determine whether urban America can reduce poverty and retain and attract the middle-class families it needs to survive and thrive. First, employment is increasing, but central cities are generating relatively few new jobs -- and even fewer of the entry-level opportunities that their residents most urgently need. Second, as America's mayors agreed in a White House summit on educational opportunity in May 1998, too many inner-city schools are leaving urban America ill-prepared to compete for 21st century jobs. Third, the central city homeownership rate has risen but still significantly lags behind the rate in the suburbs. At the same time, low-income renters still face an affordable housing crisis.

The strength of the American economy today provides us with an unprecedented opportunity to address these challenges. At the same time, the strategy undertaken by the Clinton-Gore Administration over the past 5 years provides a roadmap -- a strategy that emphasizes a Federal menu of opportunity rather than Federal mandates, with solutions that are community-driven rather than Washington-driven, in partnership with the private sector rather than in opposition. Our progress over the past 5 years has come hand-in-hand with a recognition that government alone cannot solve every problem, but working together -- with innovative mayors and county officials, business leaders, and community organizations -- we can go a long way toward solving the challenges that face us.

Part One of this report sets the stage for action by surveying the impact of these policies on cities and the dimensions of the problems that remain. Part Two describes President Clinton's proposals and other Administration initiatives to tackle the critical opportunity gaps facing our Nation's cities.