Chapter 3: Income, Earnings, and Inequality


Income and earnings are basic measures of a community's economic well-being. How much money people are bringing home and how well jobs are paying are key determinants of the quality of life in a city or metropolitan area. In assessing the economic state of Milwaukee, we want to answer several key questions:

  • Is income rising or falling in the city and the region? How have income trends in Milwaukee changed over the past twenty-five years? How do metropolitan Milwaukee and the city of Milwaukee rank compared to other cities and regions in the Frostbelt, on measures of income and earnings?

  • How do various measures of income and earnings in the city of Milwaukee stack up against trends in the suburbs? To what extent is the city resembling a poorer and poorer core, ringed by increasingly affluent suburbs? Is the gap larger or smaller in Milwaukee than elsewhere?

  • Are racial disparities in income growing or shrinking in the city and the metropolitan area? Are these disparities larger or smaller in Milwaukee than other cities -- and in what direction are trends moving?

  • Is income inequality -- the gap between rich and poor -- growing in Milwaukee? Is there more or less inequality in this region than other cities and metropolitan areas?


Metropolitan Areas: Trends in Per Capita Income

The most up-to-date income data available is for per capita personal income, for metropolitan areas through 1995.1 Tables 3.1-3.3 present data on trends in metropolitan area per capita income since 1970, examined from three different angles.

First, Table 3.1 presents unadjusted income measures (i.e. in nominal dollars). Since 1970, Milwaukee has consistently ranked in the top half of larger Frostbelt metropolitan areas in per capita income (except for 1990, when the region fell to 8th among the 14 metropolitan areas studied). As we will see on a number of income indicators, the 1980s were difficult years for both the city and metro Milwaukee; thus, it is not terribly surprising to find that the metropolitan area had fallen from 4th to 8th in per capita income between 1980 and 1990. By 1995, at least in nominal dollars, metro Milwaukee had rebounded to 6th among the 14 metropolitan areas in our study.


Table 3.1

Per Capita Income in Metropolitan Areas, 1970-1995
(in unadjusted, nominal dollars)

RANK
1970
1980
1990
1995
1
Chicago

$4,985

Chicago

$11,829

Boston

$22,589

Boston

$28,564

2
Minneapolis

$4,605

Minneapolis

$11,469

Chicago

$22,156

Chicago

$28,177

3
Boston

$4,539

Detroit

$11,200

Philadelphia

$21,513

Minneapolis

$27,436

4
Detroit

$4,530

Milwaukee

$11,153

Minneapolis

$21,418

Philadelphia

$26,959

5
Cleveland

$4,508

Cleveland

$10,973

Baltimore

$21,252

Detroit

$26,889

6
Milwaukee

$4,488

Boston

$10,766

Detroit

$20,482

Milwaukee

$25,906

7
Philadelphia

$4,431

Baltimore

$10,702

St. Louis

$20,116

Baltimore

$25,347

8
Baltimore

$4,273

Philadelphia

$10,645

Milwaukee

$19,925

Cleveland

$25,303

9
St. Louis

$4,262

St. Louis

$10,489

Cleveland

$19,905

St. Louis

$25,170

10
Buffalo

$4,139

Pittsburgh

$10,450

Indianapolis

$19,227

Indianapolis

$24,664

11
Indianapolis

$4,094

Indianapolis

$10,174

Pittsburgh

$18,970

Cincinnati

$24,199

12
Cincinnati

$4,073

Cincinnati

$9,925

Cincinnati

$18,905

Columbus

$24,132

13
Pittsburgh

$4,049

Buffalo

$9814

Columbus

$18264

Pittsburgh

$24071

14
Columbus

$3,961

Columbus

$9,657

Buffalo

$17,877

Buffalo

$22,645


However, comparing the per capita income of metropolitan areas in nominal dollars is somewhat misleading. Thus, a second angle comparing metropolitan income would take into account differing rates of inflation among metropolitan areas. After all, if Milwaukee and another region's per capita income rose by 20% during a decade, but Milwaukee's inflation rate was much lower than the other region's, then clearly income growth in Milwaukee -- in real dollars -- would be higher than the other region. Thus, it is important to examine trends in per capita income, adjusted for inflation.

Table 3.2 shows changes in real per capita personal income for Frostbelt metropolitan areas, for various time periods, controlled for each region's inflation rate. Several points stand out.


Table 3.2

Real Per Capita Personal Income - Metropolitan Area
(percentage change 1970-1995, in 1995 constant dollars)

RANK
1970 to 1980
1980 to 1990
1990 to 1995
1980 to 1995
1970 to 1995
1
Pittsburgh

21.5

Baltimore

27.1

Columbus

13.7

Boston

38.2

Boston

59.5

2
Minneapolis

18.1

Boston

24.7

Detroit

13.6

Detroit

37.8

St. Louis

57.8

3
Philadelphia

17.2

Philadelphia

24.4

Cincinnati

11.4

Cincinnati

36.9

Detroit

57.8

4
Buffalo

16.9

St. Louis

23.6

Cleveland

10.8

Columbus

36.6

Philadelphia

56.4

5
Baltimore

16.6

Cincinnati

22.9

Minneapolis

10.7

St. Louis

36.3

Columbus

55.3

6
Indianapolis

15.9

Detroit

21.4

Boston

10.7

Philadelphia

33.4

Baltimore

53.9

7
St. Louis

15.7

Columbus

20.1

St. Louis

10.4

Indianapolis

32.5

Indianapolis

53.6

8
Boston

15.6

Indianapolis

20.0

Indianapolis

10.4

Baltimore

31.6

Cincinnati

52.3

9
Cleveland

14.8

Buffalo

19.1

Chicago

9.3

Minneapolis

28.4

Pittsburgh

51.8

10
Detroit

14.5

Chicago

16.9

Milwaukee

8.6

Chicago

27.7

Minneapolis

51.6

11
Milwaukee

14.4

Pittsburgh

16.5

Pittsburgh

7.3

Buffalo

27.3

Buffalo

48.9

12
Columbus

13.7

Minneapolis

16.0

Philadelphia

7.2

Milwaukee

25.2

Chicago

43.4

13
Chicago

12.4

Milwaukee

15.3

Buffalo

6.8

Pittsburgh

25.1

Milwaukee

43.3

14
Cincinnati

11.0

Cleveland

11.0

Baltimore

3.7

Cleveland

23.0

Cleveland

41.2



First, as Table 3.2 illustrates, real per capita income growth in metropolitan Milwaukee has been sluggish since the 1970s. Numerous economists have written about "stagnant real income growth" in the United States since the early 1970s, and the Milwaukee experience is consistent with such an analysis. Between 1970 and 1995, real per capita income grew by only 43.3% in metropolitan Milwaukee, an average annual growth rate of only 1.65%. By contrast, real per capita income in metropolitan Milwaukee grew by an annual average of 2.84% during the 1960s.

Second, real per capita income has grown consistently more slowly in Milwaukee than in other Frostbelt metropolises since 1970. Overall, between 1970 and 1995, metropolitan Milwaukee ranked 13th among the 14 metropolises studied in this category: only metropolitan Cleveland's growth rate was slower. For each of the time periods examined, metro Milwaukee's real per capita income growth rate ranked among the bottom third of the 14 metropolises examined for this study.

Third, metropolitan Milwaukee's real per capita income growth rate has modestly improved during the 1990s, increasing at an average annual rate of 1.72%. Although this rate is somewhat higher than the 1970-1995 average, it is still substantially less than the pre-1970s growth rate. Moreover, although metropolitan Milwaukee ranked 10th among the 14 metropolises in real per capita income growth between 1990 and 1995, it trailed every other Midwestern metropolis in the study. So far in the 1990s, metropolitan Columbus, Detroit, Cincinnati, Cleveland, Minneapolis, St. Louis, Indianapolis, and Chicago have all posted higher real per capita income growth rates than Milwaukee.


Figure 3.1 Annualized Real Per CapitalIncome Growth in Metropolitan Milwaukee, 1970-1995
A final, and perhaps most meaningful angle from which to compare metropolitan area per capita income, would be to control for regional differences in cost of living. The dollar doesn't have the same buying power throughout the country. In 1996, for example, the cost of living in metropolitan Boston was 35.2% higher than in Milwaukee. Therefore, in terms of purchasing power, an income of $30,000 in Milwaukee was equivalent to $40,560 in Boston.

Unadjusted for cost of living differences, comparisons of metropolitan area per capita income would be misleading as a measure of "real" standards of living across metropolitan areas. Thus, to give a more accurate picture of how people fare in different metropolitan areas, we have calculated, for various years, "purchasing power parity" measures of per capita income, to adjust for buying power variations.2 These data are presented in Table 3.3. To make the comparisons easier to discern, we have calculated metropolitan area per capita income in purchasing power units, and indexed the table by measuring Milwaukee's position as 100 and giving the position of other metro areas as percentages of Milwaukee.3

As Table 3.3 reveals, metropolitan Milwaukee has ranked fairly consistently in "purchasing power" adjusted measures of per capita income. In 1969, metro Milwaukee ranked 7th among the 14 regions in our study; in 1979 and 1995, metro Milwaukee ranked 5th among the 14. In short, when controlled for cost of living differences, per capita income in metropolitan Milwaukee places it near the top-third of major Frostbelt metropolitan areas in the mid-1990s.


Table 3.3

Metropolitan Area Per Capita Income in Purchasing Power Parity Dollars 1969-1995

RANK
1969
1979
1995
1
Chicago

114.9

Chicago

111.0

Minneapolis

110.8

2
Detroit

111.4

Minneapolis

102.7

Indianapolis

105.4

3
Cleveland

107.3

Cleveland

102.2

St. Louis

105.3

4
Minneapolis

104.7

St. Louis

101.0

Baltimore

101.6

5
Philadelphia

104.4

Milwaukee

100.0

Milwaukee

100.0

6
Baltimore

103.8

Pittsburgh

99.8

Cincinnati

99.8

7
Milwaukee

100.0

Baltimore

98.8

Cleveland

99.2

8
St. Louis

99.3

Detroit

98.1

Detroit

99.0

9
Cincinnati

98.8

Indianapolis

95.1

Chicago

95.5

10
Indianapolis

98.5

Philadelphia

94.9

Columbus

93.9

11
Pittsburgh

97.8

Cincinnati

94.0

Pittsburgh

90.1

12
Boston

96.6

Columbus

88.8

Philadelphia

85.0

13
Columbus

94.7

Buffalo

86.2

Boston

84.2

14
Buffalo

92.8

Boston

82.7

Buffalo

78.1


Cities and Suburbs: Trends in Per Capita Income

Per capita income data is available for metropolitan areas through 1995; however, the most recent per capita income data for cities is available only through 1990. Tables 3.4-3.8 array some of the key data comparing per capita income trends in the city of Milwaukee vs. other Frostbelt big cities, as well as Milwaukee's suburbs compared to the suburbs of other Frostbelt regions. Taken together, these tables underscore -- as do so many tables in this report -- how the Milwaukee region has become, since 1970, a "tale of two economies": a central city economy, with many troubling indicators, and a generally prospering suburban economy.

Table 3.4 reveals that inflation-adjusted per capita income has barely budged in the city of Milwaukee since 1970, increasing by a mere 3.7%. Between 1970 and 1990, only Detroit and Cleveland performed worse among Frostbelt big cities (with real per capita income actually declining in both of those cities). By contrast, in cities such as Minneapolis, Columbus, and Boston, real per capita income increased by over 25% during this period. This is not exactly robust growth -- it averages just a little over a one percent annual rate of increase -- but it is substantially greater than income growth in Milwaukee. In comparative terms, the 1980s were particularly difficult for Milwaukee, as it ranked 12th among the 14 Frostbelt cities (compared to 6th among the 14 during the 1970s) in real per capita income growth. Some of the comparisons are quite stark: between 1980 and 1990, for example, the rate of real per capita income growth was over 16 times greater in the city of Baltimore than the city of Milwaukee.


Table 3.4

Growth in Real Per Capita Money Income - Cities
(inflation-adjusted rate of growth, 1970-1990)

RANK
Percent Change

1970 to 1980
Percent Change

1980 to 1990
Percent Change

1970 to 1990
1
Minneapolis

8.1

Boston

41.3

Boston

45.8

2
Pittsburgh

4.9

Baltimore

30.6

Columbus

29.8

3
Columbus

4.6

Columbus

23.1

Minneapolis

25.2

4
Boston

3.3

Philadelphia

23.0

Baltimore

24.7

5
Indianapolis

2.0

Indianapolis

21.3

Indianapolis

24.6

6
Milwaukee

1.6

Cincinnati

18.5

Pittsburgh

23.7

7
Buffalo

1.6

St. Louis

18.3

Philadelphia

20.4

8
St. Louis

1.4

Pittsburgh

18.0

St. Louis

20.0

9
Cincinnati

0.0

Chicago

16.1

Cincinnati

18.5

10
Philadelphia

-2.1

Minneapolis

16.0

Buffalo

17.1

11
Chicago

-3.1

Buffalo

15.2

Chicago

12.3

12
Cleveland

-3.5

Milwaukee

1.9

Milwaukee

3.7

13
Baltimore

-4.9

Detroit

0.8

Detroit

-4.8

14
Detroit

-10.0

Cleveland

-1.9

Cleveland

-5.4


By contrast, as Table 3.5 illustrates, real per capita income in Milwaukee's suburbs has grown much more rapidly than in the city. Between 1970 and 1990, inflation-adjusted per capita income increased by 37.8% in Milwaukee's suburbs, a rate of growth over 10 times greater than that of the city. Again, only Detroit and Cleveland had larger city-suburb gaps in the rate of real per capita income growth during this period.

Table 3.5

Growth in Real Per Capita Money Income - Suburbs
(inflation-adjusted rate of growth, 1970-1990)

RANK
Percent Change

1970 to 1980
Percent Change

1980 to 1990
Percent Change

1970 to 1990
1
Pittsburgh

22.5

Boston

40.7

Philadelphia

55.3

2
Indianapolis

16.0

Baltimore

37.6

Baltimore

53.9

3
Minneapolis

13.6

Philadelphia

37.3

Boston

44.6

4
Milwaukee

12.4

Columbus

27.1

Indianapolis

43.1

5
Baltimore

11.4

Detroit

26.3

Detroit

42.8

6
Buffalo

10.9

Buffalo

25.6

Buffalo

39.4

7
Chicago

10.0

Cincinnati

25.5

Milwaukee

37.8

8
Philadelphia

9.8

St. Louis

24.6

Minneapolis

37.4

9
Cincinnati

8.8

Milwaukee

22.6

St. Louis

35.2

10
St. Louis

8.5

Indianapolis

22.4

Columbus

34.6

11
Detroit

7.7

Minneapolis

21.1

Pittsburgh

33.3

12
Columbus

5.1

Chicago

18.3

Cincinnati

33.1

13
Cleveland

4.8

Cleveland

15.0

Chicago

29.7

14
Boston

2.8

Pittsburgh

8.9

Cleveland

13.4



Moreover, compared to other Frostbelt regions, Milwaukee's suburbs rank much higher than the city does in the rate of real per capita income growth. As Table 3.5 shows, between 1970 and 1990, suburban Milwaukee ranked 7th among the 14 regions studied in the rate of income growth (although Milwaukee's suburbs ranked better in the 1970s than the 1980s on this indicator).

When we control for purchasing power variations among regions, Milwaukee's relatively modest cost of living results in a somewhat different set of rankings on per capita income. These data, probably more meaningful for assessing differences in standards of living between cities, are presented in Tables 3.6 and 3.7.


Table 3.6

City Income in Purchasing Power Parity Dollars
(per capita income, 1970-1990)

RANK
1970
1980
1990
1
Indianapolis

113.1

Minneapolis

114.0

Indianapolis

139.4

2
Minneapolis

111.5

Indianapolis

111.7

Minneapolis

138.7

3
Chicago

109.6

Pittsburgh

105.1

Columbus

114.8

4
Detroit

107.3

Cincinnati

103.8

Cincinnati

110.4

5
Cincinnati

106.9

Chicago

103.0

Boston

107.9

6
Pittsburgh

105.7

Milwaukee

100.0

Pittsburgh

107.2

7
Columbus

101.4

Columbus

99.9

St. Louis

103.2

8
Philadelphia

100.2

Detroit

91.6

Baltimore

100.5

9
Milwaukee

100.0

St. Louis

90.3

Milwaukee

100.0

10
Baltimore

99.9

Baltimore

88.8

Chicago

97.4

11
Boston

93.4

Philadelphia

86.9

Philadelphia

88.8

12
Cleveland

92.0

Cleveland

85.0

Buffalo

88.3

13
Buffalo

90.4

Buffalo

83.6

Detroit

78.5

14
St. Louis

89.7

Boston

82.5

Cleveland

75.0

Table 3.7

Suburban Income in Purchasing Power Parity

Dollars

(per capita income, 1970-1990)

RANK
1970
1980
1990
1
Chicago

116.6

Chicago

112.4

Minneapolis

101.9

2
Cleveland

112.2

Detroit

103.1

Milwaukee

100.0

3
Detroit

111.5

Cleveland

101.8

Baltimore

99.2

4
Baltimore

105.3

Milwaukee

100.0

Indianapolis

97.2

5
Philadelphia

101.7

Baltimore

99.1

St. Louis

95.2

6
Milwaukee

100.0

Pittsburgh

95.9

Detroit

93.8

7
Boston

98.2

Minneapolis

94.9

Chicago

88.0

8
Columbus

98.0

St. Louis

93.7

Columbus

87.0

9
Minneapolis

97.6

Philadelphia

89.4

Philadelphia

86.3

10
St. Louis

96.3

Indianapolis

89.3

Boston

85.3

11
Cincinnati

92.6

Cincinnati

88.6

Cincinnati

84.3

12
Pittsburgh

91.3

Columbus

87.8

Cleveland

83.2

13
Buffalo

88.3

Buffalo

80.7

Buffalo

77.9

14
Indianapolis

87.9

Boston

78.1

Pittsburgh

76.1


As Table 3.6 reveals, when we adjust for cost of living differences, the city of Milwaukee ranked 9th in per capita income among the 14 Frostbelt cities in 1990 (a decline, however, from 6th in 1980, which again underscores how difficult the 1980s were for the city's economy).

By contrast, in 1990 Milwaukee's suburbs ranked 2nd among the Frostbelt metropolises in per capita income, controlled for cost of living differences. Milwaukee's suburbs have climbed steadily in the rankings, from 6th in 1970 to 4th in 1980 to 2nd in 1990. In short, although the city of Milwaukee languishes among the lower ranks of U.S. Frostbelt cities in cost-of-living adjusted per capita income, suburban Milwaukee appears to be flourishing.

This conclusion is starkly illustrated in Tables 3.8 and 3.9, and Figure 3.2. In 1970, per capita income in the city of Milwaukee was 83.6% of suburban per capita income; by 1990, that percentage had fallen to 63.4%. On this important measure of city-suburban disparities, Milwaukee ranked 7th among the Frostbelt metropolises in 1970; by 1990, we had fallen to 12th (trailed, again, only by Cleveland and Detroit). In short, by 1990 the city of Milwaukee was poorer in relation to its suburbs than all but two of the Frostbelt's big cities. Moreover, in percentage terms, the growth in the city-suburban income gap was greater in Milwaukee between 1970 and 1990 (24.2%) than any other region in the Frostbelt except Detroit (34.0%), which is widely recognized as "exhibit A" of city-suburban polarization.


Table 3.8

City Percent of Suburban Per Capita Income 1970-1990

RANK
1970
1980
1990
1
Indianapolis

107.6

Indianapolis

94.6

Indianapolis

90.9

2
Pittsburgh

96.8

Minneapolis

90.8

Pittsburgh

89.3

3
Cincinnati

96.5

Cincinnati

88.7

Minneapolis

86.3

4
Minneapolis

95.5

Columbus

86.0

Columbus

83.6

5
Columbus

86.5

Pittsburgh

82.9

Cincinnati

83.0

6
Buffalo

85.6

Boston

79.9

Boston

80.2

7
Milwaukee

83.6

Buffalo

78.4

Buffalo

71.9

8
Philadelphia

82.4

Milwaukee

75.6

Chicago

70.2

9
Detroit

80.4

Philadelphia

73.4

St. Louis

68.8

10
Boston

79.6

St. Louis

72.9

Philadelphia

65.2

11
Baltimore

79.4

Chicago

69.3

Baltimore

64.3

12
Chicago

78.5

Baltimore

67.8

Milwaukee

63.4

13
St. Louis

77.9

Detroit

67.1

Cleveland

57.2

14
Cleveland

68.5

Cleveland

63.1

Detroit

53.1

Table 3.9

Change in City Percentage of Suburban

Per Capita Income, 1970-1990

RANK
1970 to 1980
1980 to 1990
1970 to 1990
1
Boston

0.4

Pittsburgh

7.1

Boston

0.8

2
Columbus

-0.5

Chicago

1.3

Columbus

-3.3

3
Minneapolis

-5.1

Boston

0.4

Pittsburgh

-7.8

4
St. Louis

-7.0

Columbus

-2.9

Minneapolis

-9.6

5
Cleveland

-8.6

Indianapolis

-4.1

Chicago

-10.6

6
Cincinnati

-8.8

Minneapolis

-5.3

St. Louis

-11.7

7
Buffalo

-9.2

Baltimore

-5.4

Cincinnati

-14.0

8
Milwaukee

-10.6

St. Louis

-5.9

Indianapolis

-15.5

9
Philadelphia

-12.2

Cincinnati

-6.8

Buffalo

-16.0

10
Chicago

-13.4

Buffalo

-9.0

Cleveland

-16.6

11
Indianapolis

-13.7

Cleveland

-10.3

Baltimore

-19.0

12
Pittsburgh

-16.8

Philadelphia

-12.6

Philadelphia

-20.9

13
Baltimore

-17.1

Milwaukee

-19.2

Milwaukee

-24.2

14
Detroit

-19.8

Detroit

-26.5

Detroit

-34.0


Figure 3.2 Shrinking City Percent of Suburban Per Capita Income


Trends in Median Family Income

Trends in median family income in the city and the metropolitan area confirm the evolution of a "two-tiered" regional economy since the 1970s. These data also confirm, on the whole, that the rate of income growth in the city of Milwaukee and metropolitan Milwaukee between 1970 and 1990, compared other Frostbelt metropolises, was not particularly impressive. As Table 3.10 shows, inflation-adjusted median family income did not simply stagnate in the city of Milwaukee between 1970 and 1990; it declined significantly (by 18.0%).4 Once again, only Detroit and Cleveland showed higher rates of family income decline during this period.5


Table 3.10

Real Median Family Income - City
(percent change, 1970-1990, in constant dollars)

RANK
1970 to 1980
1980 to 1990
1970 to 1990
1
Minneapolis

-6.0

Boston

27.2

Boston

8.9

2
Pittsburgh

-6.2

Baltimore

14.8

Columbus

0.9

3
Indianapolis

-10.1

Philadelphia

13.2

Minneapolis

-2.5

4
Columbus

-10.8

Columbus

12.3

Indianapolis

-3.0

5
Milwaukee

-11.4

Indianapolis

7.1

Philadelphia

-3.3

6
St. Louis

-12.1

Minneapolis

3.8

Baltimore

-4.3

7
Chicago

-13.1

Cincinnati

3.5

Pittsburgh

-5.6

8
Buffalo

-13.5

St. Louis

2.5

St. Louis

-10.0

9
Cincinnati

-13.9

Chicago

2.1

Cincinnati

-11.0

10
Boston

-14.3

Buffalo

1.2

Chicago

-11.4

11
Philadelphia

-14.6

Pittsburgh

0.8

Buffalo

-12.4

12
Baltimore

-17.0

Milwaukee

-7.5

Milwaukee

-18.0

13
Cleveland

-17.0

Detroit

-12.1

Detroit

-27.5

14
Detroit

-21.4

Cleveland

-14.1

Cleveland

-28.9


Real median family income for metropolitan Milwaukee rose by a paltry 2.0% between 1970 and 1990.6 As Table 3.11 shows, metropolitan Milwaukee ranked 12th among the 14 Frostbelt metropolises in the rate of growth in real median family income between 1970 and 1990. The growth rate for real median family income in metro Baltimore during this period was almost 10 times that of Milwaukee; the growth rates in metro St. Louis and Detroit approached 5 times the Milwaukee rate. Clearly, notwithstanding the suburban prosperity during this period, the disastrous decline in Milwaukee's central city real incomes resulted in a poor, overall ranking at the metropolitan level.7


Table 3.11

Real Median Family Income - Metropolitan Area
(percent change, 1970-1990, in 1990 constant dollars)

RANK
1970 to 1980
1980 to 1990
1970 to 1990
1
Pittsburgh

1.1

Boston

29.7

Boston

22.9

2
Minneapolis

-0.5

Baltimore

23.9

Baltimore

19.4

3
Buffalo

-2.0

Philadelphia

22.3

Philadelphia

17.6

4
St. Louis

-2.5

St. Louis

13.0

St. Louis

10.0

5
Philadelphia

-3.8

Cincinnati

13.0

Detroit

9.8

6
Baltimore

-4.0

Columbus

12.3

Minneapolis

8.9

7
Milwaukee

-4.0

Detroit

11.4

Buffalo

7.9

8
Chicago

-4.2

Buffalo

10.0

Cincinnati

7.8

9
Cincinnati

-4.6

Indianapolis

9.8

Columbus

5.1

10
Boston

-5.1

Minneapolis

9.6

Indianapolis

4.4

11
Indianapolis

-5.6

Chicago

9.0

Chicago

4.4

12
Detroit

-6.2

Milwaukee

6.1

Milwaukee

2.0

13
Cleveland

-7.0

Pittsburgh

0.3

Pittsburgh

1.4

14
Columbus

-7.1

Cleveland

-1.7

Cleveland

-7.6



As was the case with per capita income, Milwaukee's ranking on median family income improves when we adjust for regional cost of living differences. As Table 3.12 shows, when converted in "purchasing power parity" units, median family income in metropolitan Milwaukee ranked 4th of the 14 metropolises in 1980, and 5th of the 14 in 1990. These data suggest, once again, that while incomes have lagged in the region, Milwaukee's reasonable cost of living helps to maintain the region's standard of living, relative to other metropolitan areas.


Table 3.12: Median Family Income

In Purchasing Power Parity Dollars
(metropolitan areas, 1980-1990)

RANK
1980
1990
1
Detroit

107.6

Minneapolis

115.5

2
Chicago

106.6

St. Louis

104.1

3
Minneapolis

104.6

Indianapolis

103.3

4
Milwaukee

100.0

Baltimore

101.0

5
Cleveland

99.5

Milwaukee

100.0

6
St. Louis

99.4

Detroit

97.9

7
Baltimore

97.9

Boston

96.2

8
Cincinnati

96.5

Cincinnati

93.9

9
Pittsburgh

95.4

Columbus

91.8

10
Indianapolis

95.3

Chicago

90.9

11
Columbus

91.2

Philadelphia

88.5

12
Philadelphia

90.7

Cleveland

84.6

13
Buffalo

86.8

Buffalo

84.1

14
Boston

83.4

Pittsburgh

78.8


Average Wage Per Job

Another angle from which to examine Milwaukeeans' economic well-being is to compare wages in local jobs to other metropolitan areas. One way to measure this situation is "average wage per job," a statistic from the federal government's Bureau of Economic Analysis.8 These data are available through 1996.9


Table 3.13

Average Wage Per Job - Metropolitan Areas (1970-1996)

RANK
1970
1980
1990
1996
1
Detroit

$8,759

Detroit

$17,885

Detroit

$27,621

Detroit

$35,071

2
Chicago

$8,108

Chicago

$16,202

Chicago

$27,114

Boston

$33,767

3
Cleveland

$7,796

Cleveland

$15,579

Boston

$26,819

Chicago

$33,503

4
Minneapolis

$7,603

Pittsburgh

$15,406

Philadelphia

$26,154

Philadelphia

$32,475

5
Buffalo

$7,511

Milwaukee

$14,857

Minneapolis

$25,178

Minneapolis

$31,502

6
St. Louis

$7,476

Cincinnati

$14,748

Cleveland

$24,506

Cleveland

$29,494

7
Milwaukee

$7,457

Philadelphia

$14,743

Baltimore

$24,225

Baltimore

$29,620

8
Philadelphia

$7,438

St. Louis

$14,728

St. Louis

$23,922

St. Louis

$29,036

9
Pittsburgh

$7,359

Minneapolis

$14,681

Cincinnati

$23,555

Cincinnati

$28,733

10
Cincinnati

$7,325

Indianapolis

$14,651

Pittsburgh

$23,222

Indianapolis

$28,710

11
Indianapolis

$7,260

Buffalo

$14,134

Indianapolis

$23,138

Milwaukee

$28,581

12
Columbus

$7,084

Baltimore

$13,977

Milwaukee

$22,890

Pittsburgh

$28,579

13
Boston

$7,051

Columbus

$13,810

Buffalo

$22,567

Columbus

$27,478

14
Baltimore

$7,002

Boston

$13,644

Columbus

$22,479

Buffalo

$27,445


Table 3.13 presents, in current dollars, the average wage per job in metropolitan areas for various years since 1970. As the table illustrates, through 1980 Milwaukee -- a relatively industrialized, unionized metropolis -- enjoyed relatively high average wages per job, ranking 5th among the 14 Frostbelt metropolises in 1980. However, since 1980, Milwaukee's ranking has dropped precipitously. In 1990, metro Milwaukee ranked 12th among the 14; in 1996, Milwaukee ranked 11th. These findings are consistent with other studies suggesting that since 1980 Milwaukee has become much more of a "low wage" region than in the past.10

In fact, as Table 3.14 illustrates, when adjusting for inflation, the average wage per job in metropolitan Milwaukee actually declined by 7.1% between 1970 and 1996. Thus, Milwaukee ranked 13th of the 14 metropolises in the rate of real growth in average wages per job during this period: only Cleveland ranked lower. Real average wages per job have been generally stagnant across the Frostbelt since 1970: only half of the metropolises experienced any growth in average wages per job. Nevertheless, Milwaukee's transformation into a low wage region since 1970 has been much more pronounced than virtually all other Frostbelt metropolises.


Table 3.14

Change in Metropolitan Area Real Average Wage Per Job, 1970 - 1996
(inflation-adjusted 1996 Dollars)

RANK
Percent Change

1970 to 1996
Percent Change

1990 to 1996
1
Boston

17.9

Boston

7.1

2
Philadelphia

9.4

Minneapolis

4.6

3
Baltimore

7.3

Baltimore

3.7

4
Detroit

4.7

St. Louis

3.7

5
Chicago

2.1

Philadelphia

3.6

6
Minneapolis

1.9

Chicago

3.4

7
St. Louis

0.5

Indianapolis

3.2

8
Indianapolis

-1.8

Cincinnati

3.1

9
Cincinnati

-2.0

Detroit

2.9

10
Pittsburgh

-3.5

Cleveland

2.2

11
Columbus

-3.7

Milwaukee

1.8

12
Buffalo

-4.2

Columbus

1.7

13
Milwaukee

-7.1

Pittsburgh

1.4

14
Cleveland

-7.4

Buffalo

-1.1


Average wages per job, adjusted for inflation, have risen in Milwaukee during the 1990s, climbing by a modest 1.8%. However, Milwaukee's rate of growth in the 1990s still lags behind most Frostbelt metropolises: we rank 11th among the 14 on this indicator. Metropolises such as Boston, Baltimore, St. Louis, Minneapolis, and Philadelphia all have experienced growth rates in real average wages per job twice the Milwaukee rate between 1990 and 1996.

Undoubtedly, much of this trend toward declining real wages per job in Milwaukee flows, as it does in most metropolises, from the decline of manufacturing and the growth of lower-paying service-sector employment. However, as Tables 3.15 and 3.16 reveal, Milwaukee's manufacturing sector -- historically vaunted as a bastion of family-supporting, blue-collar employment -- has increasingly become a source of stagnant or declining wages. Between 1972 and 1992, for example, inflation-adjusted pay per employee in manufacturing in metropolitan Milwaukee declined by 9.4%. As Table 3.15 shows, in 1967 metro Milwaukee ranked 6th among the 14 Frostbelt metropolises in pay per employee in manufacturing; in 1992, metro Milwaukee ranked last. In 1977, the city of Milwaukee ranked 5th among Frostbelt big cities in pay per employee in manufacturing; in 1992, Milwaukee ranked 11th of the 14 cities examined for this report.


Table 3.15

Pay Per Employee in Manufacturing Industries
metropolitan areas, 1967-1992)

RANK
1967
1972
1977
1982
1987
1992
1
Detroit

$8,929

Detroit

$12,920

Detroit

$19,343

Detroit

$26,864

Detroit

$33,968

Detroit

$41,409

2
Pittsburgh

$7,954

Pittsburgh

$10,798

Pittsburgh

$16,823

Pittsburgh

$23,970

Minneapolis

$29,933

Cincinnati

$36,052

3
Cleveland

$7,860

Cleveland

$10,742

Buffalo

$16,401

St. Louis

$22,941

Cincinnati

$29,210

St. Louis

$35,630

4
Buffalo

$7,689

Indianapolis

$10,701

Cleveland

$16,086

Indianapolis

$22,827

St. Louis

$29,143

Minneapolis

$35,470

5
Cincinnati

$7,546

Buffalo

$10,665

Indianapolis

$15,973

Minneapolis

$22,827

Pittsburgh

$29,028

Philadelphia

$35,423

6
Milwaukee

$7,523

St. Louis

$10,428

Minneapolis

$15,352

Cleveland

$22,626

Indianapolis

$28,727

Boston

$35,231

7
St. Louis

$7,504

Minneapolis

$10,296

Cincinnati

$15,224

Cincinnati

$22,556

Cleveland

$28,469

Pittsburgh

$34,811

8
Indianapolis

$7,496

Cincinnati

$10,208

St. Louis

$15,105

Milwaukee

$22,062

Buffalo

$27,592

Cleveland

$34,639

9
Minneapolis

$7,486

Milwaukee

$10,121

Milwaukee

$14,914

Baltimore

$21,839

Baltimore

$27,378

Indianapolis

$34,344

10
Columbus

$7,430

Chicago

$9,900

Baltimore

$14,708

Columbus

$21,673

Boston

$27,306

Baltimore

$34,168

11
Chicago

$7,291

Baltimore

$9,683

Chicago

$14,654

Chicago

$21,248

Columbus

$27,250

Buffalo

$33,813

12
Philadelphia

$7,189

Philadelphia

$9,646

Columbus

$14,420

Philadelphia

$20,701

Milwaukee

$27,089

Chicago

$33,582

13
Baltimore

$7,087

Columbus

$9,477

Philadelphia

$14,081

Boston

$20,420

Chicago

$26,658

Columbus

$32,311

14
Boston

$7,028

Boston

$9,330

Boston

$13,379

Buffalo

$17,576

Philadelphia

$26,603

Milwaukee

$31,701


Table 3.16

Pay Per Employee in Manufacturing Industries
(Cities, 1967-1992)

RANK
1967
1972
1977
1982
1987
1992
1
Detroit

$8,838

Detroit

$12,330

Detroit

$18,799

Detroit

$26,310

Detroit

$34,433

Detroit

$43,542

2
Pittsburgh

$8,622

Pittsburgh

$12,127

Pittsburgh

$18,550

Pittsburgh

$25,818

Pittsburgh

$32,503

Pittsburgh

$42,825

3
Cleveland

$7,800

Indianapolis

$11,033

Indianapolis

$16,104

Indianapolis

$22,929

Indianapolis

$30,378

Cincinnati

$39,196

4
Indianapolis

$7,769

Minneapolis

$10,466

Cleveland

$15,297

Cincinnati

$22,213

Cincinnati

$29,799

Boston

$35,691

5
Columbus

$7,627

Cleveland

$10,338

Milwaukee

$15,291

Milwaukee

$22,151

St. Louis

$29,322

Indianapolis

$35,108

6
Minneapolis

$7,410

Milwaukee

$10,220

Buffalo

$14,925

Cleveland

$22,123

Minneapolis

$28,921

St. Louis

$35,051

7
Milwaukee

$7406

Cincinnati

$10,044

Cincinnati

$14,908

Columbus

$21,703

Cleveland

$27,915

Cleveland

$34,648

8
Cincinnati

$7,301

Buffalo

$10,002

Columbus

$14,870

St. Louis

$21,684

Columbus

$27,809

Minneapolis

$34,320

9
Chicago

$7,233

Chicago

$9,844

St. Louis

$14,838

Minneapolis

$21,489

Milwaukee

$27,324

Columbus

$33,734

10
St. Louis

$7,218

Columbus

$9,784

Minneapolis

$14,598

Buffalo

$20,954

Boston

$27,200

Philadelphia

$33,025

11
Buffalo

$7,088

St. Louis

$9,637

Chicago

$14,479

Chicago

$20,828

Buffalo

$26,430

Milwaukee

$32,283

12
Philadelphia

$6,894

Baltimore

$9,290

Baltimore

$14,333

Baltimore

$20,130

Chicago

$25,534

Chicago

$32,013

13
Baltimore

$6,722

Philadelphia

$9,147

Philadelphia

$13,362

Boston

$19,882

Philadelphia

$25,288

Buffalo

$31,713

14
Boston

$6,587

Boston

$9,025

Boston

$12,921

Philadelphia

$19,486

Baltimore

$24,855

Baltimore

$31,263


Racial Disparities in Income

An inescapable finding of this study is that, to borrow the haunting phrase of the Kerner Commission in the 1960s, black and white Milwaukee are two societies, separate and unequal. We will see this in later sections of this report when we examine such subjects as poverty, unemployment, and business ownership. Here, we examine, in comparative perspective, racial inequality in income.

The income gap separating black and white families in the United States is huge: in 1996, the typical white family earned about $47,000, almost twice that of blacks. Moreover, the gap has widened since the early 1970s, as black family incomes have risen much more slowly than white family incomes.

The most recent family income data for metropolitan areas and cities is for 1990. As Tables 3.17 and Figure 3.3 reveal, there were dramatic differences by race in median family income trends in Milwaukee between 1970 and 1990:

  • In the city of Milwaukee, between 1970 and 1990, median family income for whites, adjusted for inflation, fell by 5.0%; real median family income for blacks declined by 35.8% during this period.

  • In metropolitan Milwaukee, between 1970 and 1990, median family income for whites, adjusted for inflation, rose by 7.7%; real median family income for blacks declined by 34.6% during this period.

No other city or metropolitan area approached the rate of decline in Milwaukee in real family income for blacks during this period. Also, no other city or metropolitan area approached Milwaukee's racial gap in the rate of family income growth during this period.


Table 3.17

Real Median Family Income in Milwaukee, 1970-1990

CITY
1970-1990
1970-1980
1980-1990
White
-5.0%
-7.4%
+2.7%
Black
-35.8%
-22.0%
-17.7%
METRO AREA
1970-1990
1970-1980
1980-1990
White
+7.7%
-1.9%
+8.7%
Black
-34.6%
-20.4%
-18.0%

Figure 3.3 Black-White Real Median Familty Annual Income-Metropolitan Milwaukee
The data, arrayed in Table 3.18 illustrate, in comparative terms, the astonishing racial income gap in Milwaukee. The median family income for blacks in metropolitan Milwaukee in 1990 was only 39.5% of white median family income (down from 65.1% in 1970). Milwaukee ranked last among the 14 Frostbelt metropolises in 1990 in the ratio of black to white median family income. In 1970, the metropolitan area ranked 8th among the 14. Thus, not only has racial income inequality increased dramatically in Milwaukee in absolute terms since 1970, but, relative to other Frostbelt metropolitan areas, we are doing much worse on this indicator. Table 3.19 shows that a similar racial income gap exists in the city of Milwaukee as well, where black median family income was only 47.9% of white median family income in 1990 (down from 70.4% in 1970). Among Frostbelt big cities, only Minneapolis, Cincinnati, and Pittsburgh ranked worse on this indicator in 1990 than did Milwaukee.

Table 3.18

Black Median Family Income as a Proportion of White Family Income Metropolitan Areas, 1970-1990

RANK
1970
1980
1990
1
Columbus

71.2

Indianapolis

67.6

Columbus

61.3

2
Indianapolis

71.1

Columbus

65.6

Indianapolis

59.2

3
Cleveland

67.7

Cleveland

62.2

Baltimore

58.0

4
Detroit

67.4

Detroit

60.6

Philadelphia

57.3

5
Baltimore

65.6

Cincinnati

59.8

Boston

56.9

6
Philadelphia

65.4

Pittsburgh

59.3

Cleveland

54.6

7
Minneapolis

65.2

Baltimore

58.6

Chicago

53.6

8
Milwaukee

65.1

St. Louis

58.4

St. Louis

53.5

9
Buffalo

65.1

Minneapolis

57.9

Pittsburgh

52.8

10
Cincinnati

64.1

Philadelphia

56.9

Detroit

51.6

11
Pittsburgh

63.8

Chicago

55.8

Cincinnati

50.5

12
Chicago

63.5

Boston

54.1

Buffalo

46.9

13
St. Louis

60.3

Milwaukee

52.8

Minneapolis

42.7

14
Boston

57.9

Buffalo

51.1

Milwaukee

39.5


Table 3.19

Black Median Family Income as a Proportion of White Family Income
Cities, 1970-1990

RANK
1970
1980
1990
1
Detroit

78.2

Detroit

79.1

Detroit

78.8

2
Cleveland

77.4

Cleveland

69.7

Boston

67.4

3
Buffalo

75.1

Columbus

69.4

Baltimore

65.5

4
Columbus

74.5

Indianapolis

69.4

Philadelphia

65.0

5
Baltimore

73.7

Baltimore

66.4

Columbus

62.6

6
Minneapolis

72.7

St. Louis

63.6

Indianapolis

62.5

7
Philadelphia

72.1

Boston

63.2

Cleveland

61.8

8
St. Louis

71.6

Philadelphia

63.0

Buffalo

60.0

9
Chicago

70.5

Chicago

61.9

Chicago

57.8

10
Milwaukee

70.4

Minneapolis

60.6

St. Louis

54.3

11
Indianapolis

69.6

Cincinnati

60.2

Milwaukee

47.9

12
Cincinnati

66.9

Milwaukee

59.4

Cincinnati

47.7

13
Boston

65.3

Buffalo

59.0

Pittsburgh

47.4

14
Pittsburgh

64.7

Pittsburgh

57.9

Minneapolis

43.7


Overall Trends in Income Inequality:
The Gap Between Rich and Poor

National studies have shown consistently that income inequality in the United States has increased significantly since the early 1970s. At the national level, there is ample evidence that over the past quarter-century, the gap between rich and poor has grown much more pronounced, and with a beleaguered and shrinking middle class in the middle. To what extent has this income polarization occurred in Milwaukee? How does income inequality compare here to other cities and metropolitan areas?

One common way economists measure income polarization is to compare the average incomes of families (or individuals) in the highest and lowest deciles of an income distribution. If families in the top decile in one city have an average annual income of $90,000, and families in the bottom decile have an average income of $9,000, then the income gap is 10:1 ($90,000/$9,000). To examine whether inequality is increasing or decreasing, we can compare this ratio over several years. To discern whether inequality is greater in one city than another, we can compare the ratios among cities or metropolitan areas.

Tables 3.20 and 3.21 confirm the accuracy of the traditional view of Milwaukee as a relatively egalitarian city and metropolis. Like all Frostbelt big cities and metropolitan areas, Milwaukee has experienced an increase in inequality since 1970: particularly in the city of Milwaukee, the income gap between the richest and poorest families has grown considerably (from 5.91 to 8.43 between 1969 and 1989).11 Inequality grew at a more modest rate for the metropolitan area as a whole (from 5.28 to 6.70), presumably because of the over-concentration of lower income families in the central city.


Table 3.20: Metropolitan Area Trends in Income Inequality 1969-1989

Ratio of Average Family Income in Highest to Lowest Deciles

RANK
1969
1979
1989
1
Minneapolis

5.26

Minneapolis

5.34

Minneapolis

5.42

2
Milwaukee

5.28

Milwaukee

5.67

Indianapolis

6.26

3
Indianapolis

5.46

Pittsburgh

5.72

Boston

6.32

4
Boston

5.60

Indianapolis

5.77

Baltimore

6.62

5
Chicago

5.60

Columbus

5.93

St. Louis

6.64

6
Detroit

5.65

Buffalo

5.93

Milwaukee

6.70

7
Buffalo

5.70

St. Louis

6.03

Columbus

6.72

8
Cleveland

5.79

Cincinnati

6.31

Philadelphia

6.84

9
Philadelphia

5.92

Boston

6.33

Buffalo

6.96

10
Columbus

5.97

Cleveland

6.35

Chicago

7.05

11
Pittsburgh

6.02

Chicago

6.95

Pittsburgh

7.13

12
Baltimore

6.24

Detroit

6.97

Cincinnati

7.20

13
St. Louis

6.32

Baltimore

7.02

Cleveland

7.32

14
Cincinnati

6.40

Philadelphia

7.03

Detroit

8.48


However, in relative terms, Milwaukee's income inequality is less pronounced than most Frostbelt metropolises. Since 1969, Milwaukee has consistently ranked near the top of Frostbelt cities in having the lowest ratio of income inequality. In 1989, the city of Milwaukee ranked 2nd among the 14 cities studied, just behind Indianapolis, in having the lowest ratio of income inequality. Similarly, metro Milwaukee has also ranked well on this indicator, although by 1989 the metro area's inequality ratio placed it 6th among the 14 metropolises (down from 2nd in 1969 and 1979). Nevertheless, a fair conclusion would be that, while inequality has grown in Milwaukee since the early 1970s, on the whole income polarization between rich and poor remains narrower here than in most Frostbelt cities and metropolitan areas.


Table 3.21

City Trends in Income Inequality

Ratio of Average Family Income in Highest to Lowest Deciles

RANK
1969
1979
1989
1
Indianapolis

5.59

Indianapolis

6.41

Indianapolis

7.04

2
Milwaukee

5.91

Minneapolis

6.45

Milwaukee

8.43

3
Minneapolis

6.40

Milwaukee

6.48

Columbus

8.49

4
Columbus

6.47

Columbus

7.13

Minneapolis

9.14

5
Buffalo

6.60

Pittsburgh

7.56

Philadelphia

10.38

6
Chicago

6.98

St. Louis

7.93

Boston

10.92

7
Boston

7.06

Buffalo

8.25

Cleveland

11.02

8
Philadelphia

7.07

Philadelphia

8.73

Buffalo

11.24

9
Pittsburgh

7.33

Boston

8.89

Pittsburgh

11.30

10
St. Louis

7.53

Cincinnati

8.93

St. Louis

11.77

11
Detroit

7.65

Cleveland

9.55

Baltimore

12.00

12
Cincinnati

7.96

Detroit

9.77

Detroit

12.82

13
Cleveland

7.98

Baltimore

9.80

Chicago

12.88

14
Baltimore

8.06

Chicago

10.01

Cincinnati

13.90


Summary Findings:

  • Real per capita income growth has been sluggish in metropolitan Milwaukee since 1970, with an annualized growth rate of 1.65% (compared to 2.84% in the 1960s);

  • Among Frostbelt metropolitan areas, only Cleveland had a lower rate of real per capita income growth than Milwaukee between 1970 and 1995;

  • When controlling for differences in regional costs of living, Milwaukee ranked 5th among the 14 major Frostbelt metropolitan areas in per capita income in 1995;

  • The city of Milwaukee ranked 12th of 14 Frostbelt big cities in real per capita income growth between 1970-1990. Real per capita income in the city grew by a tiny 3.7% over the twenty years;

  • Real per capita income in the Milwaukee suburbs grew at ten times the rate of the city between 1970-1990 (37.8%). Compared to suburbs in other Frostbelt regions, suburban Milwaukee ranks 7th of 14 in the rate of real per capita income growth;

  • When controlling for differences in costs of living, the city of Milwaukee ranked 9th of 14 Frostbelt big cities in per capita income in 1990; suburban Milwaukee ranked 2nd of 14 Frostbelt suburbs in this category in 1990;

  • Per capita income in the city of Milwaukee, as a percentage of the suburban figure, fell from 83.6% in 1970 to 63.4% in 1990. In 1990, Milwaukee ranked 12th among 14 Frostbelt cities, trailed only by Detroit and Cleveland, in the disparity between city and suburban per capita income;

  • Real median family income fell by 18.0% in the city of Milwaukee between 1970 and 1990, placing Milwaukee 12th of 14 Frostbelt big cities in real family income "growth" during this period;

  • Real median family income rose by 2.0% in metro Milwaukee between 1970 and 1990, placing Milwaukee 12th of 14 metropolises in the rate of real income growth during this period. However, when controlling for cost of living differences, metro Milwaukee ranked 5th of 14 in 1990 in median family income;

  • The inflation-adjusted average wage per job in metropolitan Milwaukee declined by 7.1% between 1970 and 1996. Only metropolitan Cleveland had a larger decline among large Frostbelt metropolises;

  • Pay-per-employee in metro Milwaukee manufacturing declined, in inflation-adjusted dollars, by 9.4% between 1972 and 1992. Milwaukee ranked last (14th) among Frostbelt metropolises in this category in 1992, falling from a ranking of 6th of 14 in 1967;

  • No other city of metropolitan area approached the rate of decline in Milwaukee in real family income for blacks between 1970 and 1990. No other city or metropolitan area approached Milwaukee's racial gap in the rate of family income growth during this period;

  • Black median family income in metro Milwaukee fell from 65.1% of white family income in 1970, to 39.5% in 1990. By 1990, Milwaukee ranked last-14th of 14-in the Frostbelt in this category;

  • Although overall income inequality has grown in the city and region since 1970, Milwaukee has among the lower rates of inequality of Frostbelt metropolises and cities.


______________________________

1 Per capita personal income is the current income, from all sources, received by residents of a geographic area divided by the total population of that area (which is different than 'money income' data collected by the US Bureau of the Census in their annual Current Population Reports). It consists of wages and salaries (including executive salaries, bonuses, commissions, payments-in-kind, incentive payments, and tips), rental income of persons, dividends, personal interest income, and government and business transfer payments. Money income does not include capital gains or noncash benefits (transfer payments) such as food stamps, health benefits, and subsidized housing.

2 Purchasing power parity (PPP) calculations are ordinarily used by economists to compare standards of living across countries, to take into account exchange rate and cost of living variations. When comparing income levels in, say, France to the United States, the PPP would show how much in French francs would be needed to buy a given basket of goods, compared to how much that basket would cost in dollars. In this study, in comparing "Boston dollars" or "St. Louis dollars" to "Milwaukee dollars," we are simply adjusting for cost of living differences.

3 For example, in 1995, metropolitan Boston had per capita income of $28,564, while Milwaukee's was $25,906. However, when we adjust for differences in regional costs of living, Milwaukee's per capita income would be $33,936 in "Boston dollars" in 1995. Thus, in calculating PPP income, if we measure Milwaukee at 100, Boston would be 84.2 ($28,564/$33,936). In short, although Boston's per capita income in 1995 was 10.2% higher than Milwaukee's, when we adjust for cost of living differences, Milwaukee's per capita income was 18.8% higher than Boston's.

4 As in the case of our examination of per capita income trends, we have adjusted for inflation by calculating each metropolitan area's rate of inflation, as opposed to a using a national price deflator. Using the national deflator would obscure regional differences in the rate of inflation and distort the real income measures.

5 As we will examine, these findings are consistent with the astonishing increase in poverty that occurred in the city of Milwaukee during the 1980s.

6 The metropolitan area number includes, of course, both the city of Milwaukee and suburbs. Since the city's real median family income declined substantially during this period, we can assume that the suburban level increased by somewhat more than the metropolitan area's between 1970 and 1990.

7 The fact that metropolitan Milwaukee lags behind Detroit is particularly striking, in view of the distressed condition of Detroit's central city.

8 Average wage per job is computed as follows: Dividing wage and salary disbursements (full and part-time) by wage and salary employment, drawn from places of work.

9 These data are available only for metropolitan areas, not central cities.

10 See, for example, the UWMCED study, The Crisis of Low Wages in Milwaukee (Milwaukee: 1994). The study reported that, among a sample of twelve metropolitan areas across the country, Milwaukee led the nation in the proportion of "low-wage" jobs (defined as paying less than $20,000 annually in constant 1990 dollars) created between 1970 and 1990.

11 In 1969, in the city of Milwaukee, the average income for families in the top decile was $20,501; for families in the lowest decile it was $3,467 (a ratio of 5.91). In 1989, the average income for families in the top decile was $59,277; for families in the lowest decile it was $7,029 (a ratio of 8.43).


© 1998, by the University of Wisconsin-Milwaukee Center for Economic Development


Table of Contents

About This Report

List of Tables

List of Figures

Executive Summary

Introduction

Chapter 1: Population Trends

Chapter 2: General Urban Indicators

Chapter 3: Income, Earnings, and Inequality

Chapter 4: Poverty

Chapter 5: Employment, Unemployment and Job Growth

Chapter 6: Unionization

Chapter 7: Education

Chapter 8: Women and Minority Business Development

Conclusion

Appendix A: Sources for Tables

Appendix B: Sources for Figures

Appendix C: Milwaukee's Ranking


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