C ities have always served many functions: as centers of religion, political power, and commerce. But one of their most important tasks has been to serve as engines of upward mobility and aspiration. Nowhere has this been more true than in American cities. From the earliest period of American settlement, European observers were often struck by the remarkable social mobility found in America’s urban centers. The average nineteenth-century American factory worker, whether native-born or an immigrant, enjoyed a far better chance–and his offspring an even better one–of rising into the middle or even upper classes than his European counterpart.

This is not to say that Industrial-era American cities constituted a workers’ paradise. Virtually every major city had its share of slums, and in the most important American metropolis, New York, the rate of infant mortality actually doubled in the mid-nineteenth century. Yet aspiring newcomers kept traveling to American cities, from both the surrounding countryside and the rest of the world, for one reason: the prospect of upward mobility. As historians Charles and Mary Beard noted in 1930, there may have been poverty "stark and galling enough to blast human nature," but "all save the most wretched had aspirations." There was, as they put it, "a baton in every toolkit."

So newcomers in search of a better life–the Irish in the 1840s, Italians and Eastern Europeans toward the century’s end, African Americans from the South following the first World War–propelled urban growth. As late as 1850, the United States had only six cities with a population of over 100,000, constituting barely five percent of the population. By 1900, there were 38 such cities, and they now housed roughly one in every five Americans. "A metropolitan economy, if it is working well, is constantly transforming many poor people into middle class people ... greenhorns into competent citizens," the great urbanist Jane Jacobs wrote. "Cities don’t lure the middle class, they create it."

Sadly, in recent decades, this notion of cities as mechanisms for upward mobility has broken down. Many cities, rather than trying to uplift their working class and nurture a middle class, have chosen to concentrate on "luring" the affluent, the hip, and the young as their primary development strategy. In some cities, such as in Boston, New York, and San Francisco, this has created the basis for a new kind of urban area, the "boutique city," which effectively abandons the middle class for the allure of an elite-based strategy focused on top-tier business services, arts, and hip culture.

Many other cities, particularly hard-pressed former industrial centers like Baltimore, Cleveland, Philadelphia, and Detroit, have attempted to follow this "cool city" model without much success. They may have developed Potemkin villages of coolness in their center, but they remain among the poorest and most neglected regions of North America. Cleveland, for instance, with its much-ballyhooed downtown renaissance catalyzed by the Rock and Roll Hall of Fame, ranked first in urban poverty in 2004.

In contrast, there is a group of cities which most commentators consider chronically unhip–primarily sprawling new cities of the South and West–but which are actually the most dynamic in the creation of middle-class residents. These cities–such as Phoenix, Houston, Charlotte, and Las Vegas–have traditionally put their focus on their basic infrastructure and economic competitiveness and, for the most part, enjoy relatively low costs of living, particularly for housing. As unhip as they may seem, it is these cities that present a model for how urban America can not only rejuvenate itself, but rejuvenate America’s central promise of upward mobility, as well.

Traditionally, progressive urban leaders embraced Jane Jacobs’s mission of building the middle class and providing avenues of aspiration. The old political machines did this crudely, dispensing patronage and finding jobs for newcomers. Later, the Progressive movement, the New Deal, and the Truman Administration promoted upward mobility largely by building critical, wealth-creating infrastructure: schools, roads, bridges, mass transit, public parks, and housing.

Culture did play an important role in this traditional urban model, but generally it wasn’t a major part of the city government’s job–rather, the arts were funded by those individuals who made fortunes there. Indeed, the great cultural assets of places like St. Louis, Cleveland, or Philadelphia–such as these cities’ world-class orchestras–owe their existence to the cities' own aspirational past. This is true even in some newer cities like Los Angeles, whose greatest artistic monuments bear the names of those–Getty, Disney, Geffen–who found that city a place of unlimited opportunity.

In other words, the economy came first, and the amenities followed. But such an approach has been gradually abandoned over the past few decades, replaced with a strategy that puts the cultural horse before the aspirational cart. This shift well predates the early 2000s rage over public policy scholar Richard Florida’s gospel asserting the primary need for a "creative class" of well-educated, hip, single, and gay people in the urban core. Rather, it began as urban decline became painfully evident in the 1960s and 1970s. Aware that the middle class as well as many companies were moving out, cities, particularly New York and Chicago, placed their future hopes on seizing "the commanding heights" of the global economy–notably the finance, design, project coordination, and information industries. Although planning for the "commanding heights" did leave an appropriate legacy of high-rise office towers, this elitist strategy fundamentally failed to reverse the out-migration of headquarters, jobs, and the middle class outside the urban core.

Like aging dowagers, many cities have sought to arrest their decline by applying both a touch of rouge and some serious cosmetic surgery. This is the urban landscape of the "boutique city"–one dominated not by middle- or working-class concerns, but by elite culture and the antics of celebrities, whether cultural icons, financial titans, foundation bosses, or media moguls. The boutique city is the playground of Paris Hilton and P. Diddy, as well as the assorted "masters of the universe"; it not a place with playgrounds for working-class and middle-class kids. These cities are almost obsessively concerned with "coolness" and "hipness," being "with it" and "trend-setting." Boutique cities, like a high-end specialty merchandiser, have little use for the general run of the working and middle class, whose needs are assigned to the domain of Target, Wal-Mart and other suburban merchandisers. Indeed, if the makers of the boutique city worry about anything besides themselves, it is usually not the disappearance of this hardworking middle class, but how to deal with the potential threat represented by the alienated underclass, with its potential for lethal mayhem. Many denizens of these environments do not see the city as a place that holds their commitments, but only one locale that, for a period of time or a particular season, seizes their fancy. Many are not even full-timers, instead flitting to Florida, Malibu, Palm Springs, Europe, or the Hamptons, depending on the season and their latest whims (since the 1990s, for example, the number of Manhattan residences serving as second homes has grown by as much as three-fold).

Spatially, the boutique city can be found in certain locations–Manhattan, Chicago’s "Gold Coast," much of San Francisco, Seattle, and West Los Angeles–but it can best be viewed as an interconnected archipelago of interrelated elite communities. Its fundamental economic power lies not so much in the efficiency of place but in harnessing the influence of the media and financial elites. It depends also on the energies of a steady stream of young, educated workers and legions of poorly paid, often immigrant, service workers.

To understand the change from a traditional to a boutique city, it is instructive to look into the evolution of our greatest urban center, New York. For much of its history until the 1950s, New York’s economy, including its manufacturing sector, more than held its own against the rest of country. Although it always had its slums, the city also boasted scores of solidly middle- and working-class neighborhoods. But starting in the mid-1960s, New York’s job engine began to sputter as manufacturing firms and corporate headquarters decamped, and the city failed to find industries of comparable size and quality to replace them. By 2000, the city’s overall employment stood at less than that in 1969 (and this during a period in which the number of positions grew by 61.3 million, an increase of 87 percent). Five years later, despite a much-ballyhooed recovery, yet another 100,000 more private-sector jobs had been lost.

Equally troubling, throughout this period the city’s employment pattern became ever more characterized by a mix of elite and low-wage employment. Since 2002, much job growth has been concentrated in the lower-paying retail and hospitality industries. As a result, median average wages, including for college graduates, have not kept up with inflation. Yet, at the same time, there has been robust income growth, paced by often-spectacular gains at the upper echelons of the financial and business service sectors. There may be as little as a third as many Fortune 500 headquarters in New York today compared with 1955, but those that remain employ a relatively small number of people at rapidly escalating wages. These changes have had a severe impact on New York’s demography. While it is true that the city continues to attract legions of talented people under 35, this inflow is more than balanced by an out-migration of people over that age. Nor does the current "boom" seem to be changing this reality. Since 2000, in New York City and its environs, rates of domestic out-migration, already among the highest nationwide, have actually accelerated.