25 March 2004

1
25 March 2004 Geography of Wisconsin
The State of Working Wisconsin
Workers mourn the closing of the Allis-Chalmers
factory in 1985-6 Source Gurda
2
Guiding questions
How has deindustrialization affected Wisconsins
economy? What is the Center on Wisconsin
Strategy, and what problems do they identify in
Wisconsins employment scene? What is spatial
mismatch, and what solutions does the
UW-Milwaukee Center for Economic Development
recommend?
3
Part 1 From blue-collar history to
deindustrialization

• What were the characteristics of Wisconsins
  economy in the 1950s-1970s?
• What is deindustrialization?
• How has deindustrialization affected Wisconsin?

4
A. Wisconsins industrial history
Industrial (manufacturing) jobs in the central
city and inner-ring suburbs Particular
strengths in metal-working Relatively high wages
for blue-collar jobs Labor peace (unions and
management) Government spending Fordism
5
A. Wisconsins industrial history
But White flight (15 population loss
1960-1990) Disinvestment in urban and inner-ring
infrastructure Racial segregation is housing,
schools, and unions Limited opportunities for
women to advance Industrial pollution
6
B. Deindustrialization
Shift of US manufacturing and employment to
suburbs, the Sunbelt, and overseas Suburbs tend
to have cheaper land and costs because of a range
of subsidies and incentives The Sunbelt and
overseas (to different extents) offer cheap land,
less unionization, lower wages, less
environmental regulation, higher subsidies and
incentives Standards in the Sunbelt and overseas
did not rise fast enough to stem the tide
7
B. Deindustrialization
Government policies contribute to capital
mobility and uneven development From Baltimore to
St. Louis, older industrial cities become known
as the Rustbelt A recession in the early 80s hit
US manufacturers hard Mechanization also
decreased jobs and wages
8
C. Deindustrialization and economic
restructuring in Wisconsin Source Gurda
Example Heil Company (auto bodies and other
heavy equipment) Factory on Milwaukees South
Side now houses a service-oriented business that
has become the regions largest private employer
9
C. Deindustrialization and economic
restructuring in Wisconsin (Milwaukee area)
Plant closings Allis-Chalmers throughout the
early 80s Schlitz in 1982 after union strife and
an out-of-state buyout Pabst in 1996 after an
out-of-state buyout
10
C. Deindustrialization and economic
restructuring in Wisconsin
New service jobs paid as little as half of
manufacturing wages Example Annual wages of 10
fastest-shrinking industries in Milwaukee, 1988
30,552 Annual wages of 10 fastest-growing
industries in Milwaukee, 1988 16,225
11
Part 2 COWS and the State of Working Wisconsin

• What is COWS and what do they do?
• Working Wisconsin The good news
• Working poverty and income inequality in
  Wisconsin

12
A. What is COWS?
A think-do tank based at UW-Madison The
Wisconsin Idea independent, university-based
research with a public purpose Programs job
training partnerships monitoring state economy
exploring innovative and alternative economic
strategies Biennial report The State of
Working Wisconsin
13
B. Working Wisconsin the good news
Statewide, a fairly diverse economy Overall
unemployment rate below national average Median
incomes rising Increasing growth (in ) rates
since 1990s perhaps indicating recovery from
deindustrialization Increasing participation by
women fuel increasing employment rates Poverty
rate below national average
14
C. The bad news working poverty and income
inequality
Growth in wages reflects increased hours at
work Working poverty increasing, especially in
the growing service sector Growth in employment
for males is stagnant Racial inequality
15
C. The bad news focus on working poverty
Those in working poverty Tend to work in
services (a growing sector) Often a family in
working poverty has no adult in full-time,
year-round employment Often tend to stay in
these jobs, and so do not escape poverty
16
C. The bad news focus on working poverty
Those in poverty-wage jobs (pay less than 8.12
per hour) 32 of Wisconsin workers Of
poverty-wage workers studied in 1990, 54 were
still in such jobs in 1997 Poverty-wage jobs tend
to be non-unionized and in the service industries
17
C. The bad news focus on working poverty
Racial and gender disparities among workers in
poverty wage jobs (percent of total workers of
that group) White men 15.6 Black men
29.3 White women 27.3 Black women 35.1
18
C. The bad news focus on working poverty
A growing concern? 56 of Wisconsins job growth
from 1982-1998 was in retail
19
C. COWS recommends
Equalize tax rate for example, offer tax breaks
to working poor (whose tax rate is twice that of
the richest 1) Raise minimum wage Education and
training High road strategies promote
labor-management cooperation, recruit high-wage
employers Offer more affordable child care and
health care Cut down on urban sprawl
20
Part 3 Spatial mismatch in Milwaukee

• Milwaukees labor market, 1990s today
• The spatial mismatch
• UWMCEDs recommendations

21
A. Milwaukees labor market, 1990s - today
Lost 21 of manufacturing jobs since 1990s Among
the 50 largest US cities, only 6 have higher
unemployment rates than Milwaukee (had been doing
better than average in 1990s) From 1997 through
2003, the number of unemployed grew from 16,000
to 25,000 From the 1970s through today, the
number of central-city census tracts with 50
labor market exclusion has grown
22
B. Spatial mismatch
Areas with job growth do not correspond to
pockets of high unemployment Suburban job growth
has increased while central-city jobs
Central-city residents lack access to suburban
jobs because of lack of access to housing and/or
transportation There may also be a mismatch in
skill levels
23
B. Spatial mismatch in Milwaukee
UWMCED calls it an example of regional
polarization suburban and urban job markets
have diverged Within the metro area, 33.5 of
residents live within Milwaukee proper, but 53.7
of unemployed residents live there All net job
growth since the 1990s has occurred in the
suburbs Since 1990, urban and suburban
unemployment rates have diverged today the
difference is 5 percentage points
24
B. Spatial mismatch in Milwaukee
The disparity runs along racial lines 92 of
African-American workers live in the city, 79 of
white workers live in the suburbs Milwaukee is
consistently among the three most segregated
metro areas in the US In 2001, Milwaukee had
highest rate of unemployment among
African-Americans, 18.5, among largest US
cities The gap between white and black
unemployment is the third highest in the country
25
B. Spatial mismatch in Milwaukee
Downtown redevelopment has not helped in the ways
forecast Well over 1 billion has been invested
in redevelopment projects supposed to create jobs
directly and by spillover (multiplier)
effect Example projects Midwest Express
Convention Center Milwaukee Art Museum Calatrava
Wing Miller Park Potawatomi casino
26
C. UWMCEDs recommendations

• Public investment in metro Milwaukees
  infrastructure could stimulate employment
• Schools
• Roads and mass transit infrastructure
• Housing

27
C. UWMCEDs recommendations

• Regionalism that is, cooperation among
  metro-area governments
• Tax-base sharing
• Smart growth
• Twin Cities model of regional governance

28
C. UWMCEDs recommendations

• Reduce labor market segregation
• More affordable housing in the suburbs
• Better public transportation
• (Other researchers also recommend better
  communication networks to inform central-city
  residents of jobs)

29
C. UWMCEDs recommendations

• Better reindustrialization policy for the
  central city
• Building on abandoned industrial sites
  (brownfields)
• Community Benefit Arrangements (CBA) (incentives
  to redevelopment projects in exchange for
  guaranteed jobs for local residents)