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UW-Milwaukee - Center for Economic Development

Policy Research Report Abstract

Metropolitan Polarization in an Era of Affluence: Income Trends in Metropolitan Milwaukee Since 1990

Executive Summary

Metro Milwaukee's economy flourished in the 1990s: Controlling for inflation, the average income reported on the tax returns of the region's residents grew by 17.6 percent between 1990 and 2000.

However, the "rising tide" did not "lift all boats" in metropolitan Milwaukee during the 1990s boom. Real income barely budged in the City of Milwaukee and, notwithstanding recent reports on the "economic well-being" of Milwaukee's inner city, real income actually declined in inner city neighborhoods despite one of the greatest booms in U.S. economic history. The income gap between city and suburb widened markedly during the 1990s, and income inequality deepened in the region. The number of affluent metro Milwaukee residents, reporting annual income above $100,000 (in 2000 constant dollars), surged during the 1990s, but the vast majority of these affluent taxpayers lived outside the City of Milwaukee.

There were some encouraging signs in the city. For the first time in decades, the absolute number of affluent tax filers living in the city increased during the 1990s, a trend that accelerated towards the end of the decade. Nevertheless, by 2000, as the great boom of the 1990s came to end, a decade of suburban sprawl and growing inequality had resulted in a highly polarized distribution of the benefits of prosperity in metro Milwaukee, leaving the city further behind its increasingly prosperous suburbs.

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