A Tale of Two Cities
New city report reveals huge split between Milwaukee’s desperate poverty and wonderful amenities, neighborhoods. What are its solutions?
The report naturally offers an optimistic title: “Growing Prosperity: An Action Agenda for Economic Development in the City of Milwaukee.” Weighing in at nearly 120 pages, with lots of graphs, data and action points, it’s something of a slog, but is supposed to provide a kind of “state of the city” report and road map to the future. The report was overseen by Department of City Development Commissioner and ever-busy deal maker Rocky Marcoux, in consultation with Paul Brophy, a senior fellow at the Brookings Institution, with advice from a huge cast of Milwaukee movers and shakers. Cecil B. DeMille has nothing on Rocky Marcoux when it comes to putting together a huge production.
So yes, it’s dull reading, yet you can’t help being stunned by just how contradictory Milwaukee is, simultaneously the best and worst of towns.
As the report notes, Milwaukee “has a high livability index with… national sports teams; entertainment options in professional theater, live music, comedy, performance arts and dance; iconic museums; a delightful range of tourist events (brewery tours to Harley-Davidson reunions); an unrivaled festival season; a renowned park and trail system; world-class museums, major universities, liberal arts and technical colleges.”
Other positive bullet points:
-“The region also has lower-cost industrial real estate than other regions, strong infrastructure, and moderately priced utilities… attractive to industry… In contrast to many large U.S. cities, Milwaukee has a significant inventory of large development sites… most located in industrial parks or existing Business Improvement Districts.”
-The Milwaukee 7 region is home to seven Fortune 500 companies, making it “one of the top ten U.S. regions for headquarters on a per capita basis.”
-With more than 150 arts and cultural organizations, the city consistently ranks as one of the top 25 arts destinations in the U.S. by American Style and “in 2013 ArtPlace ranked Milwaukee’s East Town (and a portion of the Lower East Side) as one of the top 12 art places in America,” the only Midwestern city ranked so high.
-A Market Value Analysis of Milwaukee with nine peer cities found nearly 50 percent of Milwaukee’s housing units were located in block groups designated as “high value” or “regional choice” while distressed neighborhoods comprised a much lower portion of neighborhoods than in other peer cities.
So there’s plenty to brag about in Milwaukee. Yet consider the depth of its problems:
-It’s the 9th most impoverished big city in the U.S., with nearly 30 percent of residents living below the poverty line.
-Approximately 31 percent of city residents have only a high school diploma, and 18 percent did not complete high school at all.
-In a survey of 2012 Milwaukee Public School graduates, more than 40 percent had no post-graduation plan!
-“The city faces a number of challenges in human capital: higher unemployment rates, particularly among minority populations; large numbers of potential workers lacking the technical and soft skills (e.g., punctuality, work ethic, etc.) needed to succeed… and other barriers to employment such as lack of valid driver’s licenses… or previous criminal records that discourage employers from hiring.”
-Fewer than 50 percent of jobs in metro Milwaukee are accessible in 90 minutes via transit. “This is a particular concern for Milwaukeeans who work in Waukesha County industrial parks… their commute can begin hours before their work start time, and require multiple bus transfers… for residents who have children… their commute may begin at 5 or 6 a.m. in order to get children to school by 8 a.m. and make it to work on-time.”
-Nearly 20 percent of Milwaukee households do not have a vehicle, and more than 25 percent commute via carpooling, public transit, or walking. “Median earnings for those who commute to work by bus are just under $15,000 annually—just 54% of the median income for all local commuters.”
-“Milwaukee has one of the lowest rates of entrepreneurship among America’s largest metro areas.” Just 7.9 percent of adults are self-employed, which is 2.3 percent below the national average. “In fact, in 2013, just 170 businesses were created for every 100,000 adults in Wisconsin, ranking it 45th in entrepreneurship in the U.S. Venture capital generation was similarly lackluster: Wisconsin businesses raised just under $36 million in 2013; neighboring states Michigan and Minnesota raised three and seven times as much, respectively.”
As you look at this list of assets and deficits, the logical conclusion is that Milwaukee has invested enough money and energy on arts groups and festivals and museums and sports teams while underinvesting in its schools and transportation and central city redevelopment. There’s no doubt the solutions to poverty aren’t simple but we could probably all agree that creating a city of festivals and pro sports teams won’t do much to address the problems.
So what does this action plan prescribe? The list of recommendations is lo-o-o-ng and certainly includes some useful proposals, but the emphasis is many small ideas. There is often a workmanlike quality to the style of Marcoux and his Mayor Tom Barrett, adding up various well-intended projects but lacking a big vision. Of course, the city is greatly handicapped by a shrinking revenue base, as I’ve previously reported.
The report suggests building on five industry clusters in the metro area, including the finance and insurance cluster, with 46,000 workers, headquarters and business services (26,000 workers), power, energy, controls and automation (19,000 workers) and food and beverage processing (14,000 workers), but also includes the much touted water technology cluster, with no figures on the number of workers. This cluster might some day develop, but if you can’t even estimate the number of workers involved, how can you include it with the other four clusters?
Similarly, the report touts changes at the the Grand Avenue Mall, though it remains an obvious failure. And it notes the redevelopment of the Menomonee Valley, truly a big success, but in same breath talks about the Reed Street Yards area (where water technology businesses might develop) and Century City development in the 30th Street Corridor (where the city hopes to attract manufacturing) as though they in same league as the valley redevelopment. Maybe some day in the rosy distant future, but not now.
Two things in the report hit me with great force.
First, the potential impact of on-the-job training for jobs that require science, technology, engineering and math (STEM) skills. The need for these jobs is actually growing, with 21.4 percent of jobs in metro Milwaukee demanding STEM skills in 2013. And average STEM wages in the metro area were in excess of $68,000 and less than $39,000 for non-STEM jobs. These figures cry out for a focus on training and and connecting youthful city residents, most of whom are minority, to such jobs.
And second, the potential impact of minority-owned businesses. Nationally, while businesses owned by whites grew by 81 percent from 1982 to 2007, companies owned by African-Americans jumped nearly 523 percent and Hispanic-American firms soared by 696 percent.
Milwaukee County businesses are far more likely than those state-wide to be owned by African American (13.2 percent in the county vs 2.6 percent in Wisconsin), Hispanics (3.6 percent vs 1.3 percent) and other minorities (4.2 percent vs 2.2 percent).
In a metro area well known for its levels of economic and racial segregation, with poor transportation to suburban jobs, minority-owned businesses could be hugely beneficial. Latino-owned businesses tend to locate in neighborhoods in which 37 percent of the population is Latino, the report notes, while African American-owned businesses locate in areas that are 44 percent African-American. And two-thirds of the employees of black-owned businesses are African-American.
There are many things the city and private sector could do to nurture such businesses. That could perhaps be a key to melding the two cities of Milwaukee into one unified place of prosperity.
I should note that the report is at this point a draft waiting for approval from the Common Council, but its statistics are unlikely to change in the final version.