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UW-Milwaukee - Center for Economic Development

Policy Research Report Abstract

"Stealth Depression" Joblessness in the City of Milwaukee Since 1990

Executive Summary

As we approach Labor Day 2003, the economic boom of the 1990s has already become a distant memory for Milwaukee's labor market. Through most of the 1990s, the unemployment rate for city residents ran below or close to the national average for the nation's 50 largest cities. Today, at 9.3 percent, Milwaukee's unemployment rate is over two percentage points higher than the national "big city" average, and significantly higher than the 5.7 percent unemployment rate at which it began the 1990s. In 2003, among the nation's 50 largest cities, Milwaukee had the 44th highest unemployment rate. Only Cleveland, Detroit, Fresno, Miami, Oakland, and San Jose posted higher rates.

Since 1990, Milwaukee has lost 21 percent of its manufacturing jobs and overall job growth has been anemic compared to other cities. Major public investments in tourism and entertainment facilities, such as the Midwest Airlines convention center and Miller Park, have failed to produce the job boom - in either tourism-related employment or "spin off" jobs - forecast by promoters.

The unemployment rate in the city of Milwaukee runs over five percentage points higher than in the suburbs, a gap that has widened considerably since the mid-1990s. All of the net job growth in metropolitan Milwaukee since 1995 has occurred in the suburbs. Consequently, the metro Milwaukee labor market continues to suffer from a structural "spatial mismatch" between pockets of high unemployment (the city of Milwaukee) and locations of job growth (mainly, the suburbs).

In Milwaukee's inner city, joblessness is endemic. 56.4 percent of working age males in the city's "Enterprise Community" - census tracts designated as the "inner city" by City Hall-were either unemployed or not in the labor force. By 2000, in almost one-third of the census tracts in the city of Milwaukee, over half the working age male population was unemployed or not in the labor force.

Racial disparities in unemployment continue to characterize the Milwaukee labor market. Among the cities and metropolitan areas surveyed by the U.S. Bureau of Labor Statistics, Milwaukee had the highest rates of black unemployment (18.5% in the city, 17.4% in the metro area) in 2001, the most recent data available. The gap in white and black unemployment rates in Milwaukee was among the largest in the nation; in metro Milwaukee, the black unemployment rate was over four times higher than the white rate in 2001. In the city of Milwaukee in 2001, according to "supplementary survey" data released by the U.S. Bureau of the Census, white male teenagers (ages 16-19) had a lower unemployment rate (17.9%) than prime working-age (25-54) black males (18.6%).

The "stealth depression" in the city of Milwaukee's labor market calls for bold, new departures in public policy. Initiatives in public investment, regional cooperation, reducing metro-wide racial segregation, industrial policy, and community benefits agreements should be considered as part of an aggressive anti-unemployment strategy in the city.

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