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UW-Milwaukee - Center for Economic Development

Policy Research Report Abstract

The Economic State of Milwaukee, 1990-2008, December 2010, by Joel Rast

Executive Summary

In 1998, the UWM Center for Economic Development published a comprehensive study of the Milwaukee region's economic performance. The study, titled The Economic State of Milwaukee: The City and the Region, compiled data on a broad set of indicators of economic well-being for Milwaukee and 13 other "Frostbelt" metropolitan areas. The analysis was both historical and comparative, including data as far back as the 1950s for the 14 cities and metropolitan areas examined. A key contribution of the study was to document the impacts of deindustrialization, white flight from the city to the suburbs, and segregation on Milwaukee during this period. The result of these economic and demographic changes was a dramatic deterioration, both absolutely and in comparison to other cities, in the city of Milwaukee's economic well-being as measured by numerous indicators in the study. Suburban Milwaukee fared considerably better on many of our indicators, resulting in a sizeable gap between city and suburban economic performance.

In this report, we examine once again the economic state of Milwaukee, focusing this time on the period from 1990 to 2008. Our intent with this report, in part, is to see how well Milwaukee has weathered the disruptive changes of previous decades. Has Milwaukee successfully come to grips with deindustrialization and other urban problems that caused the city's decline during the 1970s and 1980s? Or is our performance still among the weakest of Frostbelt cities on many indicators of economic well-being? Are we closing the gap between city and suburban economic performance, or do significant disparities remain? Is there noticeable improvement in the economic welfare of the city's black population, or do we continue to see large disparities between racial groups?

This report is similar in scope to our previous study but includes a slightly larger sample of cities and metropolitan areas. Several regions that were not part of our previous study-including Kansas City, Newark, Omaha, Toledo, and Wichita-appear similar enough to Milwaukee to be useful comparative cases for the present study. We ultimately selected the 19 most populated metro areas in the Northeast and Midwest, with the exception of New York City and Washington, DC, which were omitted due to their unusual economic characteristics. In addition to those regions just named, our sample consists of Baltimore, Boston, Buffalo, Chicago, Cincinnati, Cleveland, Columbus, Detroit, Indianapolis, Milwaukee, Minneapolis, Philadelphia, Pittsburgh, and St. Louis.

Key findings of the report are as follows:

Population
  • The city of Milwaukee's population fell from 628,088 in 1990 to 604,477 in 2008, a decline of nearly 4 percent. The Milwaukee metropolitan area gained population from 1990-2008. However, the Milwaukee region's increase of 8 percent is the smallest increase of all the metro areas in our sample except Toledo and Detroit.
  • Milwaukee became a majority-minority city during the 1990s. The city's white population fell from 61 percent of the city's total population in 1990 to 40 percent in 2008. No other city in our sample experienced this great a percentage decline in its white population during this time period.
  • The Milwaukee region remains one of the most segregated metropolitan areas in the country, with more than 90 percent of African Americans living in the city of Milwaukee. Of our 19 sample cities, only Toledo and Wichita had lower percentages of African Americans living in the suburbs in 2008.
Employment and Income
  • Sectors with the largest number of jobs for both the city of Milwaukee and the Milwaukee region are health care and social assistance and manufacturing, with combined employment of nearly 250,000 in 2007. However, manufacturing jobs declined sharply from 1997 to 2007 in both the city and the metro area, while jobs in health care and social assistance have grown modestly. Several other sectors added jobs in both the city and the region, including professional, scientific, and technical services; educational services; arts, entertainment, and recreation; and accommodation and food services. This reflects Milwaukee's ongoing transition from a manufacturing to a services-based economy, a trend that is especially pronounced in the city of Milwaukee.
  • Payroll figures for the Milwaukee area provide a mixed picture. Payroll per employee in manufacturing rose by 8 percent from 1997 to 2007 in both the city and the metro area, a pace that outranks the vast majority of other cities and metro areas in our sample. The city's manufacturing payroll per employee figure of $49,327 in 2007 places Milwaukee in the top third of our sample cities. On the other hand, manufacturing is a declining sector, and payroll figures for growing sectors such as health care and social services and accommodation and food services are not as strong, either absolutely or in comparison to other cities and metropolitan areas. In accommodation and food services, for example, the city of Milwaukee's payroll per employee of $12,998 ranked 14 of 19 cities.
  • Male jobless rates in Milwaukee rose from 1990 to 2008 in both the city and the region. Jobless rates for white males are lower than they are in most of the other cities and regions in our sample. However, the situation is reversed for black males. In 2008, black male joblessness in the Milwaukee metro area was higher than any other region in our sample except Toledo, Detroit, and Buffalo.
  • In our previous State of the City report, we found that real per capita income grew by just 3.7 percent in the city of Milwaukee from 1970 to 1990, a slower pace than all but two of the cities in our 14-city sample, Detroit and Cleveland. The most recent data show little improvement on this indicator. From 1990-2008, Milwaukee's real per capita income grew by just 4.4 percent, slower than all of our 19 sample cities except Detroit and Toledo.
  • The Milwaukee metropolitan area ranked second to last on real per capita income growth among the 14 metropolitan areas in our previous study. Recent data show a significant turnaround, comparatively speaking. From 1990-2008, real per capita income growth for the Milwaukee metro area was 17 percent, placing the Milwaukee region in the top third of our sample.
  • Median household income for African Americans in the Milwaukee region is comparatively low. One factor contributing to this is the region's comparatively small black middle class. We use three measures to develop a composite picture of the black middle class in the cities and metro areas in our sample: black households earning at least $50,000; the percentage of blacks with a 4-year college degree; and the percentage of blacks employed in professional, management, and related occupations. On each of these measures, Milwaukee consistently falls in the bottom half of our sample.
Business and Economic Development
  • The Milwaukee region's gross metropolitan product increased by 29 percent from 2001-2008, placing Milwaukee in the bottom third of metro areas in our sample. The region's 8 percent increase in gross metro product per capita during this time places Milwaukee squarely in the middle of our sample cities.
  • Recent sales figures for tourism-related sectors such as food and accommodation and arts, entertainment, and recreation have been strong for both the city of Milwaukee and the Milwaukee region. From 1997-2007, sales in food and accommodation in the city of Milwaukee grew by nearly 20 percent.
  • In terms of overall sales volume, Milwaukee's largest sector is manufacturing, accounting for $9 billion in sales in the city and over $40 billion in sales in the metropolitan area in 2007. Like most other cities in our sample, the city of Milwaukee experienced a drop in manufacturing sales from 1997 to 2007. Milwaukee's decline of 16 percent places the city roughly in the middle of our sample on this indicator.
  • In contrast to the central cities in our sample, most metropolitan areas we examine experienced increases in manufacturing sales from 1997 to 2007. In several regions, including Wichita, Columbus, and Philadelphia, gains were 40 percent or higher even after adjusting for inflation. The Milwaukee region's increase of just under 3 percent is one of the smallest gains among the 12 regions in our sample that experienced growth in manufacturing sales during this time.
  • The city of Milwaukee's 21 percent share of metro-area retail sales is down from 24 percent in 1997. Comparatively speaking, Milwaukee's performance is reasonably strong, placing Milwaukee near the top third of our sample cities. The city's share of the region's manufacturing employment has declined as well. However, its 22 percent share is still greater than that of most of the other cities in our sample.
Poverty
  • As our previous State of the City report showed, the city of Milwaukee's poverty rate increased by 61 percent during the 1980s, the highest increase of the 14 cities in our sample population. Data from 1990, 2000, and 2008 show that poverty has become entrenched in Milwaukee. Stabilization in the city's poverty rate during the 1990s has given way to further increases since 2000. Milwaukee's 2008 poverty rate of 24 percent is exceeded by only five cities in our sample: Newark, Cincinnati, Buffalo, Cleveland, and Detroit.
  • Poverty in the Milwaukee region is largely confined to the central city. In 2000, only 11 of the 182 census tracts in which 10 percent or more of residents were living below the poverty threshold were located outside the city of Milwaukee.
  • Milwaukee's child poverty rate in 2008 was a staggering 35 percent. Only Cincinnati, Buffalo, Cleveland, and Detroit had higher child poverty rates than Milwaukee that year. The Milwaukee metro area did not fare any better, comparatively speaking. The region's child poverty rate of 18 percent was higher than all the metro areas in our sample except Buffalo, Detroit, Toledo, and Cleveland.
  • When we break down poverty by race, we find once again that trends dating back to the 1980s documented in our previous State of the City report have not been reversed. Our previous report documented a dramatic rise in the city of Milwaukee's African-American poverty rate during the 1980s, from 29.5 percent in 1980 to 41.2 percent in 1990. Like nearly all cities in our sample, Milwaukee's black poverty rate declined during the 1990s. However, by 2008, Milwaukee still had a black poverty rate exceeded by only four cities: Buffalo, Cincinnati, Toledo, and Minneapolis.
Transportation
  • The Milwaukee region experiences fewer traffic delays than many other metropolitan areas. In 2007, Milwaukee-area commuters were delayed an average of 18 hours during peak travel periods. Milwaukee is among the top 6 or 7 performers on this indicator of congestion for the years 1990, 2000, and 2007.
  • Milwaukee-area commutes are, on average, shorter than they are in many other metropolitan areas. In 2008, only 29 percent of Milwaukee-area commuters spent more than 30 minutes traveling to work. Only four other metropolitan areas in our sample had shorter average commute times.
  • Only 7 percent of commuters in the Milwaukee region cycle, walk, or use public transportation to get to work. By contrast, 17 percent of Boston and Chicago commuters use alternatives to driving.
Education
  • The percentage of college educated residents in the city of Milwaukee rose from 1990 to 2008 but is still far below cities like Minneapolis and Boston, where more than 40 percent of residents were college educated in 2008. Only four cities-Toledo, Cleveland, Newark, and Detroit-had lower percentages of college educated residents than Milwaukee in 2008. The Milwaukee metro area fares somewhat better on this indicator, both absolutely and comparatively speaking, but is still well below the top performers.
  • For the years 1990, 2000, and 2008, the Milwaukee region had the lowest percentage of college educated blacks of all 19 metro areas in our sample. The city of Milwaukee's performance was nearly as poor.
  • The disparity between college-educated blacks and college-educated whites in the Milwaukee region is especially pronounced. For the years 1990, 2000, and 2008, the Milwaukee metro area had the highest disparity between black and white residents of all 19 metro areas in our sample. The city of Milwaukee does somewhat better, comparatively speaking, but still falls in the bottom half of our sample for each year examined.

 

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