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UW-Milwaukee - Center for Economic Development

Policy Research Report Abstract

The Crisis of Low Wages in Milwaukee: Wage Polarization in Metropolitan Labor Market 1970 - 1990, November 1994, by Marc V. Levine

Abstract

Metropolitan Milwaukee has experienced a proliferation of low wage jogs since the 1970s. The relative proportion of "middle-class" jobs in the region's labor market has also shrunk considerably since 1970, resulting in a significant polarization of Milwaukee's wage structure.

During the 1970s, low-wage jobs (defined in this report as jobs paying under $20,000 in 1990 dollars) represented 69.6 percent of new employment growth in metropolitan Milwaukee. During the 1980s, low-wage employment constituted 83.2 percent of the net employment growth in the region.

Compared to a broad sample of U.S. cities - other "Frostbelt" industrial centers, growing Sunbelt metropolises, and West Coast "global" cities -- Milwaukee stands near the top in growth of low wage employment since. Since 1980, no metropolitan area we examined had a higher rate of low-wage job creation than Milwaukee, which is fast becoming one of the low-wage capitals of the U.S.

Low-wage job creation has dominated the labor markets of counties across the region. In some counties, such as Milwaukee, Racine, and Kenosha, low-wage employment accounted for virtually all of the new employment growth during the 1980s. However, even rapidly growing employment centers such as Waukesha and Ozaukee counties saw low-wage jobs represent over 50 percent of the net employment growth during the 1980s.

The polarization of metropolitan Milwaukee's labor market has meant that "middle class" jobs, which represented 42.5 percent of total employment in 1980, fell to only 36.1 percent in 1990. This rate of "middle class" shrinkage exceeded the rate in all of the other U.S. cities we examined.

Stagnant and declining wages in the local economy have resulted in a dramatic fall in Milwaukee's rank among other cities in measures such as per capita income, and surges measures of economic distress, such as poverty rates.

Deunionization and a declining minimum wage have played important roles in lowering wages. Although the federal government's role will be vital in addressing the crisis of low wages, this report recommends that Milwaukee follow the lead of Baltimore and enact a "Social Compact", which includes a higher local minimum wage as well as encouraging the organization of low-paid workers in local businesses.

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