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UW-Milwaukee - Center for Economic Development

Policy Research Report Abstract

Downtown Redevelopment in Milwaukee: Has it delivered for the City? February 1994, by Marc V. Levine and John F. Zipp

Abstract

In 1991 and 1992, the University of Wisconsin-Milwaukee Center for Economic Development conducted two major surveys of businesses and employees in downtown Milwaukee. The surveys collected important information about downtown firms in three main area: purchasing and sales; employment and wages; and commuting patterns. Our chief findings:

Purchasing and Sales

Downtown firms had sales or service receipts of $7.88 billion in 1990.

53.5 percent of sales/receipts of downtown firms were to customers outside metropolitan Milwaukee; thus, there is a strong export base downtown that brings $4.2 billion into the Milwaukee economy.

Downtown firms purchases over $2.1 billion worth of goods and services in 1990. Unfortunately, a substantial portion of this purchasing "leaks" from the City of Milwaukee and the Milwaukee region. Over 62 percent of purchases by downtown firms were from businesses located outside metropolitan Milwaukee.

UWMCED estimates that if downtown firms could increase the local proportion of their purchasing by 10 percent, it would create 1,990 jobs in Milwaukee. As a minimum first step, UWMCED recommends a "two percent initiative" in which downtown firms are encouraged to increase their local purchasing by two percent; this would add nearly 400 jobs to the Milwaukee economy.

Employment and Wages

UWMCED estimates downtown employment in 1992 at 79,929, a healthy increase from the Census Bureau estimate of 45,000 in 1980.

A significant proportion (46.1 percent) of the jobs created in firms that began operating downtown after 1982 paid under $20,000 annually. 17.7 percent paid under $10,000.

A bare majority of employees in the new downtown firms lived in the City of Milwaukee (50.5 percent). 27.6 percent lived in Milwaukee County (outside the City), and 21.6 percent lived in one of the three other counties in the metro region (for a suburban share of 49.2 percent of new-firm downtown employment).

City of Milwaukee residents held the vast majority of lower-paid jobs in the new downtown firms: 74.5 percent of jobs paying under $10,000 annually, and 71.0 percent of the jobs paying between $10,000 and $20,000 a year. By contrast, over 79 percent of jobs paying over $40,000 annually in these firms were held by suburban residents.

88.2 percent of all employees in the firms that were created after 1982 were white; 7.4 percent were African-American; and 1.5 percent were Latino (the remainder were from other groups unidentified in the survey).

African-Americans and Latinos combined exceed 10 percent of the new-firm labor force in downtown in only three occupational categories: retail sales, clerical, and blue collar. On the other hand, minorities hold only 1.2 percent of managerial jobs and 2.6 percent of professional/technical jobs in these firms.

Minorities constituted 22.7 percent of the new-firm labor force earnings under $10,000 a year, 16.1 percent making between $10,000 and $20,000 annually, but only 1.7 percent of the workers earned over $40,000 a year.

94.8 percent of all African-Americans and Latinos in new downtown firms earned under $20,000 annually, compared to 41.6 percent for whites employed in these firms.

Milwaukee's minority communities are underrepresented as a whole in businesses started downtown since 1982; are disproportionately concentrated in clerical and retail jobs and underrepresented in managerial and professional/technical positions; and are concentrated in a low-wage, "secondary labor market" sector of the new downtown economy. By and large, the best jobs offering the highest have been garnered by white suburbanites.

The Downtown Economy and Transportation Planning

Almost 80 percent of the downtown labor force in the UWMCED survey commuted to work by automobile.

49.7 percent of downtown workers said transit route "closer to home" would be necessary to induce a shift from cars to mass transit.

37.0 percent of downtown workers said they would take light rail to work if Milwaukee had such a system; 15.5 percent said that they would not; and 47.5 percent were undecided.

Policy Recommendations

UWMCED recommends a two percent initiative, in which downtown firms would increase their local purchasing by at least two percent.

UWMCED recommends more vigilant public-private efforts to increase minority hiring downtown.

UWMCED recommends a review of municipal finance, with strong consideration given to introduction of a city wage tax (replacing portions of the property tax), or commuter tax that would encourage downtown workers to live in the city.

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