The Economic Rise and Fall of Milwaukee, 1920-2000

By Marc V. Levine

Department of HistoryCenter for Economic Development

UW-MilwaukeeOctober 7, 2004

25,00027,50030,000

32,50035,00037,50040,000

42,50045,00047,50050,000

1960 1970 1980 1990 2000

Boston

Minneapolis/St.Paul

Milwaukee

Median Family Income in Three Cities: 1960-2000(in real 2000 dollars)

100

150

200

250

300

350

400

450

500

550

1960 1970 1980 1990 2000

Boston

Minneapolis/St.Paul

Milwaukee

Jobs in Three Cities: 1960-2000(in thousands)

Mature Industrial Milwaukee

Emerged between 1920-1950 Based on high-value-added durable goods—nonelectrial

and electrical machinery and transportation equipment By the 1940, more than 46% of males employed in

Milwaukee manufacturing worked in firms producing iron and steel products or heavy machinery

Manufacturing wages in Milwaukee 10% above the national average in the 1940s

Mature Industrial Milwaukee

In 1950: Full employment economy 30% of labor force “operatives or laborers;” 42%

employed in manufacturing Family-supporting jobs: median family income above

comparable cities City as unambiguous center of regional economic gravity

1950s: Storm Clouds on the Horizon

The Bitker Commission

The Oak Creek Law and the End of Annexation

The Zeidler Commission

The Economic Decline of Milwaukee: 1960-2000

Deindustrialization

Suburbanization of Employment and Commerce

The Secession of the Affluent

Race and Inner City Distress

Failure of Corporate and Political Leadership

The Deindustrialization of Milwaukee

# of Manufacturing

Jobs in city(in thousands)

% change from previous year

1958 123.4 -

1967 118.6 -3.9

1977 91.4 -22.9

1987 63.9 -30.0

1997 46.5 -27.2

2001 36.4 -21.7

The Suburbanization of Manufacturing in Milwaukee

Year # of manufacturing jobs in suburbs(in thousands)

% change from previous

% of metro manufacturing

jobs (in thousands)

1963 80.9 - 39.9

1967 97.9 +21.0 45.2

1977 112.7 +15.2 55.2

1987 100.1 -11.2 61.0

1997 118.7 +18.6 71.9

2001 111.8 -5.8 75.4

Geography of Net Job Growth in Metropolitan Milwaukee Since 1970

1970-2000

City of Milwaukee -8,540

Milwaukee County Suburbs +52,454

Waukesha County +146,368

Washington County +31,082

Ozaukee County +22,726

Local Employment at Selected Milwaukee-Area Companies, 1990-2003

Company 1990 2003

Briggs and Stratton 8000 2600

Aurora Health Care 5400 11,704

Wisconsin Bell/SBC Ameritech 4527 4500

Allen-Bradley/Rockwell 4500 4800

A.O. Smith/Tower Automotive 3986 1300

Firstar 3575 3500

GM-Delco Electronics 3600 1600

Marcus Corporation 3500 3027

Marshall & Ilsley Corp. 3000 6700

Miller Brewing 3212 1850

Wisconsin Energy Corp. 3020 5100

Northwestern Mutual 3000 4000

Johnson Controls 2500 2500

Harnischfeger/Joy Global 2500 900

Ladish 2000 925

Master Lock 1480 750

Harley-Davidson 1200 3500

Rising Unemployment in Milwaukee: The City versus the National Urban Average, 1990-2003

5.35.7

9.6

6.0 6.9

5.7

4.04.55.05.56.06.57.07.58.08.59.09.5

10.0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003*

Year

Un

emp

loym

ent

Rat

e %

Milwaukee

Average for 50largest cities

A Growing City-Suburban Gap in Joblessness Since 1990

2

3

4

5

6

7

8

9

10

1990 1996 2002 2003*

Year

Un

emp

loy

men

t R

ate

City of Milwaukee

Milwaukee CountySuburbs

WOW Suburbs

0

10

20

30

40

50

60

70

80

90

100

1954 1958 1967 1972 1977 1982 1987 1992 1997

Year

Per

cen

tage

Retail Sales in the City of Milwaukee As Share of Metro Area Retail Trade,

1954-1997

City

Shopping Patterns in Metro Milwaukee, 1977-2000Percentage of households reporting shopping within past

30 days at selected Milwaukee-are shopping centers

1977 1987 1997 2001

Downtown 30 12 9 9

Grand Avenue - 25 15 11

Mitchell St. 17 8 3 5

Southgate 24 20 13 -

Capitol Court 28 16 5 -

Northridge 32 31 23 16

Mill Road - 9 - -

1977 1987 1997 2001

Southridge 36 35 36 38

Brookfield Square 30 31 31 40

Galleria West (Brookfield - - 6 6

Loehman’s Plaza (Brookfield)

- 9 11 11

Brookfield Fashion Center - 11 13 19

Brownstones (Brookfield) - - 8 9

Mayfair 34 34 39 46

Johnson Creek Outlet - - - 15

Factory Outlet (Kenosha) - - 9 10

Gurnee Mills - - 6 11

West Allis 11 9 8 8

Suburbs West/South

Shopping Patterns in Metro Milwaukee, 1977-2000Percentage of households reporting shopping within past

30 days at selected Milwaukee-are shopping centers

1977 1987 1997 2001

Bayshore 20 20 16 19

Pavilion (Mequon) - - 5 5

East Towne Square (Mequon)

- - 4 6

Manchester Mall (Grafton)

- - 5 7

Suburb/North

Shopping Patterns in Metro Milwaukee, 1977-2000Percentage of households reporting shopping within past

30 days at selected Milwaukee-are shopping centers

Commuting in Metro Milwaukee, 1960-2000

0 10 20 30 40 50 60 70 80 90

% of all workers livingin MSA, working in

central city

% of workers living insuburbs, work in central

city

% of workers living incity, work in central city

1960

1990

2000*

*Preliminary

The Shrinking City Share of Metro Milwaukee’s Affluent

Percentage of families/households in metro Milwaukee in various income brackets living in the city

Year Share of metro area families/households

Share of metro area “top 5%”

bracket

Share of metro top “25%” bracket

1960 62.1 36.9 52.7

1970 51.1 54.1 37.5

1980 48.3 20.4 32.1

1990 44.8 14.5 23.8

2000 39.5 12.8 19.0

The Changing Geography of Affluence in Metropolitan Milwaukee, 1960-2000

1960 2000

City of Milwaukee 6528 3878

Fox Point 986 642

Bayside 412 460

River Hills 138 317

Shorewood 865 593

Whitefish Bay 1556 1126

Mequon 633* 2171

Brookfield 682 2721

Elm Grove 500 682

New Berlin 151 1409

Delafield 54 969

Pewaukee 118 758

Wauwatosa 706 1212

Commuting by the Suburban Affluent, 1960-2000Percentage of top quintile suburban earners

working in city

68.6

45.7

24.8

10

20

30

40

50

60

70

80

1960 1990 2000*

*Preliminary

Race and Low-to-Moderate-Skill Employment in Selected Cities, 1970Percentage of workers employed as

“operatives and laborers”

City Blacks Whites

Baltimore 33.4 20.0

Chicago 34.4 23.5

Cleveland 36.2 31.0

Milwaukee 42.9 24.7

St. Louis 31.0 25.2

Philadelphia 33.4 21.2

Pittsburgh 26.3 18.8

Cincinnati 30.6 20.0

Boston 26.9 16.6

Detroit 39.3 24.2

Milwaukee’s “Inner City,” 1970-2000:An Economic Snapshot

1970 2000

Total Employed Residents 27,643 12,152

Male labor market exclusion 33.9% 56.4%

Total employed in manufacturing 11,290 2,335

% employed in manufacturing 40.8% 19.2%

Poverty rate 25.7% 40.2%

Real median household income $21,090 $18,193

Lincoln Park, 1970-2000:An Economic Snapshot

1970 2000

Total Employed Residents 3,604 2,392

Male labor market exclusion 20.9% 48.2%

Total employed in manufacturing 1,244 483

% employed in manufacturing 34.5% 20.2%

Poverty rate 3.9% 17.2%

Real median household income $36,392 $29,746

The Employment Crisis in Milwaukee's Inner City(Percentage of Male Residents, Age 25-54 either

Unemployed or Out of the Labor Force in Selected Areas, 2000)

9.3

25.6

42.1

54.9

0

10

20

30

40

50

60

King DriveArea

27th & NorthArea

City ofMilwaukee

MetroMilwaukee

Suburbs

Labor Market Exclusion: 1970-2000Census tracts with 50% or more working-age males unemployed

or out of labor force

Black Household Income as a % of White Household Income: Milwaukee in a

National Context

0

10

20

30

40

50

60

70

1980 1990 2000

Metro Milwaukee

USA

A Small Black Middle-Class Compared to other metropolitan areas, Milwaukee’s black middle class is small.

Among the 50 largest metro areas in the U.S., Milwaukee ranks 47th in the percentage of black households with annual incomes over $40K

Metro Area % of Black Households with Annual Income over $40K

San Jose 67.8

Washington DC 56.5

Atlanta 49.0

Oakland 47.6

Riverside 46.7

Newark 46.0

Hartford 43.5

Chicago 42.6

Baltimore 41.8

Charlotte 40.8

Minneapolis 37.2

Columbus 36.8

Kansas 36.0

Cleveland 32.5

Milwaukee 30.0

Buffalo 25.7

Percentage of Metro Area Black Households with Annual Income Greater than $40K Living in

Suburbs, 2000

9.5

2331.8

40.2 40.546.8

54.3 56.6

80.387.2

0

10

20

30

40

50

60

70

80

90

100

Milw

aukee

Mem

phis

Detroi

t

Charlo

tte

Chica

go

Min

neap

olis

Baltim

ore

Clevela

nd

Was

h DC

Atlant

a

Percentage of Middle-class (above $40K) Households Living in Neighborhoods in which the

Poverty Rate Exceeds 20% in Selected Metro Areas, 2000

Milwaukee Baltimore Minneapolis

White 3.5 2.7 2.3

Black 46.7 21.9 25.1

Percentage of Affluent (above 100K) Households Living in Neighborhoods in which the Poverty

Rate Exceeds 20%, in Selected Metro Areas

Milwaukee Baltimore Minneapolis

White 1.5 1.9 1.1

Black 42.0 14.4 16.7

Failure of Policies and Leadership

The Maier Years: Inner City Neglect and Regional Confrontation

The Norquist Years: The “Ostrich” and the Booster

“Can’t build a city on Pity” Market fundamentalism A developers’ city Tourism

Corporate Leadership: the GMC, MMAC

Corporate Executive Pay in Milwaukee, 1990-2002

Compensation of 100 highest paid executives of publicly held corporations

Year Median Cash Compensation

Median Value Company Stock Holdings

Ratio of Compensation to average worker pay

Ration of stock value to average worker pay

1990 $274,206 $1.12 million 13-1 49-1

1999 $572,921 $8.68 million 17-1 254-1

2002 $625,397 $5.06 million 17-1 140-1