Est. Annual Expenditures for Personal Care Products and Related Services
Commercial District	Within a 3-Mile Radius*	Per Square Mile
Chavez & National	$26,223,724	$1,077,937
Kinnickinnic & Russell	$19,345,711	$1,130,006
Layton & Lincoln	$28,938,629	$1,062,358
8th & Mitchell	$23,943,457	$1,120,424
27th & Center	$32,057,057	$1,249,301
27th & Wisconsin	$30,015,490	$1,026,171
35th & North	$31,981,154	$1,265,077
35th & Villard	$26,581,613	$1,072,272
53rd & Capitol	$34,618,130	$1,366,146
53rd & Burleigh	$35,431,811	$1,348,242
55th & North	$31,284,245	$1,196,338
60th & Silver Spring	$23,849,623	$982,274
83rd & Silver Spring	$21,380,289	$902,884
* Circles may overlap, and some circles extend into Lake Michigan.

Methodology

The purchasing power of residents in Milwaukee County is calculated using annual income tax data from the Wisconsin Department of Revenue, current estimates of the elderly population from the federal Health Care Financing Administration, and detailed studies of consumer spending patterns based on the Bureau of Labor Statistics Consumer Expenditure (CEX) Surveys of residents in large Midwest cities. The methodology was developed by Frank Stetzer and John Pawasarat of the University of Wisconsin-Milwaukee after consultation with BLS staff regarding strengths and limitations of the CEX Survey data and review of methods used by national marketing firms to estimate spending.

The research in Milwaukee utilizes current income tax filing data by zipcode and block for all of Milwaukee County. The data considers total adjusted gross income by zipcode and block, as well as income ranges by types of households at the zipcode level. Spending patterns are calculated for elderly persons and for four types of working age income tax filers: married filers with dependents, single filers with dependents, single filers without dependents, and married filers without dependents. To insure confidentiality of all tax data, detailed statistics are analyzed at the zipcode level, while summary statistics (total AGI, number of married and single filers, EITC claims) are reviewed at the block level.

This analysis of city purchasing power uses income tax data as the primary source of current information about the annual income of city and suburban residents. Tax data have important advantages: they are available annually, they provide a more comprehensive listing of income than may be typically volunteered during the U.S. Census or on survey research projects, and they can be used to compare city and suburban neighborhoods on a common measure. The data understate total income for upper and middle-income residents, given tax law provisions regarding reporting of rental property, self-employment business expenses, tax-deferred annuities, etc. The data also understate income in lower-income neighborhoods where some workers may not file tax returns. Across all income groups the tax data do not capture unreported earnings from the "cash economy."

Current income tax data appear far preferable to the ten-year U.S. Census reports that are used as the primary basis for spending estimates by most commercial marketing firms. The Employment and Training Institute found substantial undercounts in both population and income sources in the 1990 Census in Milwaukee County. Data on household income obtained by the Year 2000 Census may be even more problematic, given the growing resistance of residents to complete these surveys. Also, while many city neighborhoods showed significant increases in numbers of workers and income during the economic growth of the 1990s and early 2000s, these changes will not be reflected in most marketing company projections until after the 2000 Census. Yet, by the time the Census 2000 data on 1999 income are released and analyzed, they will be 3 to 4 years old.

City Strengths: Dense Population, High Concentration of Workers and Income

The major factors contributing to the strong purchasing power of central city neighborhoods are their population density and concentration of workers. While average household income may be lower than in suburban neighborhoods, the total income per square mile exceeds that of many suburban areas. Some of the strongest retail markets in the metropolitan area have been ignored in part due to misconceptions about central city income status, persistent "urban legends" about the absence of workers in central city neighborhoods, and marketing stereotypes promulgated by commercial marketing firms.

A clear economic strength of Milwaukee's central city is it population density. When the Year 2000 Census population counts are mapped by block, they show the high concentration of residents in the city. Population maps, prepared for each commercial district, show this concentration.

An examination of the number of working age income tax filers (married and single) finds very high concentrations of tax filers in central city Milwaukee neighborhoods. In zipcode 53206, for example, on Milwaukee's northside, the number of 1999 working age tax filers totaled 4,376 per square mile. By contrast, the number of working age tax filers in Greendale totaled 1,071 per square mile.

The total adjusted gross income of working age tax filers is also strong in the central city and comparable to many suburban neighborhoods. Income reported by working age tax filers in zipcode 53204, for example, on Milwaukee's southside totaled $67 million per square mile in 1999. This is higher than the income reported by filers in Hales Corners ($54.4 milling per square mile), Cudahy ($59.6 million), Franklin ($20.3 million) or Oak Creek ($20 million).

Detailed analyses of household spending patterns conducted by the Bureau of Labor Statistics consistently show that lower income households spend a larger portion of their income on retail expenditures than upper-income households. When the income by neighborhood is translated into purchasing power per square mile, central city neighborhoods show considerable strength.

Funding for the Milwaukee Purchasing Power Project was provided by the Helen Bader Foundation, the Milwaukee Neighborhood Improvement Development Corporation, and the University of Wisconsin-Milwaukee. For more information, contact the Employment and Training Institute, 161 W. Wisconsin Avenue, Suite 6000, Milwaukee, WI 53203. Phone (414) 227-3385.

Page updated 2009
Employment and Training Institute
School of Continuing Education
University of Wisconsin-Milwaukee

Direct comments to: eti@uwm.edu