This paper describes the decline and polarization of American cities into two separate and coterminous systems: the city of the poor, characterized by the function of redistribution (i.e., public welfare benefits); and the city of the elite, a city of information processing, economic facilitation, and consumption. Demographic trends and social and economic factors that have shifted the nation's production base away from urban areas are described. Statistics on migration into and away from the central cities since 1965 are presented, as are income figures that demonstrate the declining buying power of urban residents. Social as well as economic differences between urban elites and the urban poor are discussed, and the implications of these disparities are considered in terms of human services, education, housing, and other areas of public policy. It is held that if cities are to survive, they must apply creative solutions in order to attract a broad economic base which includes middle class and affluent residents and increased employment opportunities. (GC)