Economic Impact

UWM ECONOMIC IMPACT STUDY

Summary of the UWM Economic Impact Study (January, 2011). The University of Wisconsin‐Milwaukee is vital to the state’s economic health, making a total contribution of direct and indirect spending in the 2009-2010 academic year of about $1.5 billion.
Direct UWM spending totals about $713 million per year. The components of that spending are UWM non‐payroll expenditures; spending by UWM students and employees; and spending by visitors to UWM students, employees, athletic events; and visitors on UWM business.

Contributor Amount
Students $279,936,000
Institution 149,666,000
Employees 143,133,000
Visitors 140,000,000
Total $712,735,000

When an economic multiplier specific to higher education in the Milwaukee metropolitan area is applied to these direct expenditures, the total economic contribution that UWM makes to the state is about $1.5 billion. Considering that only 28% of the university expenditures come from state taxes, UWM provided a return on the state’s investment of $116 million (based on 2009‐10 expenditures) of $13 for every dollar invested.

UWM’s economic contribution to the state is not, however, limited to its direct spending. In turn, this direct spending is recycled through the state economy as the dollars spent by UWM on goods and services are spent again on goods and services by the businesses and individuals that serve UWM. This recycling, or rippling, of dollars through the economy is captured by multipliers that are applied to direct UWM spending.

The money spent by UWM and its employees, students, and visitors also creates jobs in the state—almost 29,400 Wisconsin jobs are attributable to UWM’s presence.

Additionally, estimated construction spending by UWM during the next 3 to 5 years is expected to have a positive impact on the state’s economy of about $480 million and sustain almost 5,300 construction and supplier jobs.

UWM ECONOMIC IMPACT STUDY HIGHLIGHTS

UW‐Milwaukee is a major economic force in Wisconsin, employing more than 5,000 people (not including hourly student workers) and educating more than 30,000 students,
• The operation of UWM has an annual impact of $1.5 billion on Wisconsin’s economy.
• This is a payback of 13 times the state’s annual investment of $116 million (based on 2009‐10 expenditures).
• Almost 75% of the annual expenditures of $617 million come from sources other than state taxes.
• UWM employees spend $143 million in Wisconsin annually.
• Beyond their tuition and fees, UWM students spend $280 million each year.
• Visitors to UWM, its students, employees and athletic events spend $140 million each year.
• The expenditures of UWM, its employees, students and visitors total about $713 million annually and result in almost 29,400 jobs (not including UWM jobs).
• UWM construction spending in the next 3 to 5 years is estimated to have a positive impact on the state’s economy of about $480 million and sustain almost 5,300 construction and supplier jobs.

METHODOLOGY

The purpose of this analysis is to measure the economic contribution that UW Milwaukee makes to the state. In 1997, Professor William Strang conducted an analysis of UW System’s impact on Wisconsin’s economy. As part of that study, information was also provided on UW‐Milwaukee’s contribution to the state’s economy. An update of the 1997 study was prepared for UW System in September 2002. However, the 2002 study did not contain specific data for UWM. This analysis attempts to apply the methodology used in both the 1997 and 2002 studies to obtain updated figures on UWM’s economic contribution to the state.

In general, expenditure data was from the 2009‐10 fiscal year. Estimates of direct institutional non‐payroll expenditures, UWM employee take‐home pay, UWM student expenditures, and expenditures by visitors to UWM students, employees, athletic events and visitors on UWM business were made applying the methodology used in the 1997 and 2002 reports. The output multiplier used to calculate the indirect effect of UWM expenditures is specific to higher education in the Milwaukee metropolitan area. The jobs multiplier used is the same as in the 1997 study.

Estimates of future UWM construction spending were taken from the 2011‐13 UWM Capital Budget. Multipliers generally utilized by economists were used to calculate the economic impact of construction spending.

STAFF

Questions, comments, or further details about this analysis should be directed to Peter Alexopoulos at x4988 or alexopo2@uwm.edu.

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