Badger InstituteBadger Institute
  • Home
  • Issues
    • Taxes
    • Education
    • Crime & Justice
    • Spending & Accountability
    • Economy & Infrastructure
    • Federalism
    • Licensing
    • Healthcare
    • Civil Society
  • Mandate for Madison
  • Research
  • Magazines
    • Diggings
    • Wisconsin Interest
  • Events
  • Media
    • Podcast
    • Fact Sheets
    • Viewpoints
    • Press Releases
    • Badger in the News
    • Video
    • Audio
    • Testimony
  • About
    • Our Mission
    • Board of Directors
    • Team
    • Visiting Fellows
    • America’s Future
    • Careers
  • Newsletter
  • Donate
  • Contact Us

Subscribe for Updates

Get the latest news and updates from Badger Institute.

What's New

A lawmaker lifeline from Evers’ broadband binge 

June 8, 2023

UW-Milwaukee Graduation Numbers for Black Students Plummet Even Further

June 1, 2023

Why public school-goers support choice

June 1, 2023
Facebook Twitter YouTube LinkedIn Instagram
TRENDING:
  • A lawmaker lifeline from Evers’ broadband binge 
  • UW-Milwaukee Graduation Numbers for Black Students Plummet Even Further
  • Why public school-goers support choice
  • Natural gas and regulation in Wisconsin: a policy brief
  • State landlords hit hard by eviction moratorium
  • Legislature protects Milwaukeeans from $15-per-rider fare-free trolley folly
  • Latest crime figures show a Milwaukee in trouble
  • Wisconsin lawmakers in the dark on broadband
  • Donate
  • Newsletter
  • Contact
Facebook Twitter YouTube LinkedIn Instagram
Badger InstituteBadger Institute
SUPPORT OUR MISSION
  • Issues
    • Taxes
    • Education
    • Crime & Justice
    • Spending & Accountability
    • Economy & Infrastructure
    • Federalism
    • Licensing
    • Healthcare
    • Civil Society
  • Mandate for Madison
  • Research
  • Magazines
    • Diggings
    • Wisconsin Interest
  • Events
  • Media
    • Podcast
    • Fact Sheets
    • Viewpoints
    • Press Releases
    • Badger in the News
    • Video
    • Audio
    • Testimony
  • About
    • Our Mission
    • Board of Directors
    • Team
    • Visiting Fellows
    • America’s Future
    • Careers
Facebook Twitter YouTube LinkedIn
DONATE
Badger InstituteBadger Institute
Home » Economy and Infastructure » How Madison stole Milwaukee’s prosperity
Economic Development

How Madison stole Milwaukee’s prosperity

By Tom HeftySeptember 9, 2015
Share
Facebook Twitter LinkedIn Pinterest

In the past 30 years, metro Madison grew 45%; metro Milwaukee grew just 11%. What caused the difference in outcomes for two cities separated by only 75 miles? The answer lies in Wisconsin politics.

The Twin Cities of Wisconsin are Madison, metro population 633,000, and Milwaukee, metro population 1.57 million. Both cities are dominated by Democratic politics, yet the economies of the two cities have taken decidedly different paths.

Madison is prospering; Milwaukee is not.

Madison has a median family income of $77,700; Milwaukee’s is $40,800. Fifty-three percent of Madison’s population has a bachelor’s degree or higher; it’s 22% in Milwaukee.

In the past 30 years, metro Madison grew 45%; metro Milwaukee grew just 11%.

What caused the difference in outcomes for two cities separated by only 75 miles? The answer lies in Wisconsin politics, particularly the politics of the Democratic Party. The post-World War II Democratic Party revival in Wisconsin was led by Democrats in Madison, not Milwaukee.

Madison was the seat of government; Milwaukee was the commercial capital of Wisconsin. Government won.

Three factors have driven overall growth: the impact of higher education and new technology; entrepreneurship and new businesses; and the expansion of government services since the Great Society and the Obama administration’s stimulus spending. For each factor, Madison won and Milwaukee lost. 

More than 40 years ago, “The History of Wisconsin” noted that Milwaukee Democrats provided the votes to elect Madison Democrats to statewide office. Since WW II, five Democrats have been elected governor. None was from Milwaukee. (Lt. Gov. Martin Schreiber, a Milwaukee Democrat, became governor in 1977 after Patrick Lucey resigned.)

The numbers tell the story: 2014 was a watershed year for Wisconsin’s Twin Cities. For the first time in history, the average wages in Madison’s Dane County exceeded the average wages in Milwaukee County. 

Let’s look at the three factors that drove the two cities apart.

University of Wisconsin budget allocations

UW-Madison is called the flagship of the UW System, and the headquarters of the system is at the top of the tallest building in the center of the Madison campus. UW-Milwaukee, the system’s urban campus, enrolls an almost equal number of Wisconsin undergraduates. Yet the resources for the two campuses are much different.

In total spending per student, UW-Madison spends $59,000, compared to $19,000 at UW-Milwaukee. That difference is largely in research dollars. The Madison research spending per student is $26,000, compared to $2,600 in Milwaukee.

The apples-to-apples comparison of education and related spending shows the same disparity in the national Delta Cost Project reports, which track education spending by campus. Madison spends $18,400 per student; Milwaukee spends $12,200.

That inequity is best illustrated by a comparison of similar universities in Illinois. The state’s flagship Big Ten school is the University of Illinois at Urbana-Champaign. The urban public university is the University of Illinois at Chicago.

Spending per student on education and related expenses at Urbana-Champaign is $19,000, similar to spending at UW-Madison. Spending at the Chicago campus is $29,000, more than double the spending at UW-Milwaukee. 

The UW System appointed a committee to review campus-by-campus allocations of UW dollars. The committee was chaired by an executive from the Madison campus. Not surprisingly, in 2014 the committee recommended no change in the UW budget process. Madison won again, and Milwaukee lost.

There was much debate in the Legislature this year regarding the Wisconsin Idea. That phrase originally described the mission of the UW System: “the boundaries of the university are the boundaries of the state.” In practice, the phrase has been redefined to mean “the boundaries of UW are the boundaries of Wisconsin — except Milwaukee.”

Venture capital and entrepreneurship

Entrepreneurship is the core of 21st-century economic development. It is frequently said that all net job growth comes from new, young businesses.

New business requires capital — venture capital, angel investment and banking support. In 2004, the Doyle administration passed innovative venture capital and angel capital incentives to address those needs.

Once again, the bulk of those incentives went to Madison-area companies. A 2006 Legislative Audit Bureau report asked why the incentives were going to the most prosperous areas of the state, including Madison.

A July 2014 report from the Wisconsin Economic Development Corp. was titled “A Decade of Supporting High-Tech Startups in Wisconsin.” Nothing has changed.

According to the latest report, since the program began in the Doyle administration, two-thirds of the “Qualified New Business Ventures” approved for funding have been metro Madison companies. Only 20% have been in metro Milwaukee.

That is one reason for Milwaukee’s low 2015 ranking of Entrepreneurship in Metro Areas by the Kauffman Foundation — 39th out of the 40 largest metro areas in the country.  

Location of state government employment

For better or worse, government employment since the Great Society has been a powerful engine of job growth. Washington, D.C., now is home to some of the most prosperous communities in the country. So is Madison, as reflected in the $77,000 median family income.

In most states, the largest metro area has a significant portion of the state government employees, reflecting the available workforce and the needs of the population served by government programs. Putting government agencies near the population to be served makes sense.

Not so in Wisconsin. Madison is home to 42,000 state government workers, according to U.S. Commerce Department data. Milwaukee has 6,600.

In a recent national report, Madison has the second-highest percentage of government workers among U.S. cities — second only to Sacramento, Calif. Twenty-five percent of Madison workers are employed by the government.  

How did that happen?

Madison Democrats have long dominated the State Building Commission, which controls the buildings and, therefore, the location of employment of state workers. Much like South Carolina controlled the Armed Services committees in Washington, D.C., to gain military bases and employment, Madison Democrats have jealously guarded the State Building Commission.

That trend of Madison winning and Milwaukee (and the rest of Wisconsin) losing continues. As early as this fall, the state will break ground on the largest state office building in Wisconsin history. It is a 600,000-square-foot building on the prosperous west side of Madison, set to house the Department of Transportation and other agencies.

According to published reports, the Baker Tilly economic impact analysis for the new building found that the redevelopment will generate 1,359 private-sector jobs and 1,943 construction jobs — all in Madison, the city with the lowest unemployment rate in the state.

Madison frequently makes favorable top 10 lists. The Dane County executive recently bragged that his county produced more than 70% of the state’s job growth from 2003 to 2013. Milwaukee achieves less notable rankings. Those include slow job growth, rising murder rates, greatest racial disparities and major public health challenges. 

There is a connection. Madison stole the tools for Milwaukee prosperity — and brags about it. 

Tom Hefty is the retired head of Blue Cross-Blue Shield United of Wisconsin. This column represents his personal opinion.

News
Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
Tom Hefty

Related Posts

A lawmaker lifeline from Evers’ broadband binge 

June 8, 2023

Natural gas and regulation in Wisconsin: a policy brief

June 1, 2023

State landlords hit hard by eviction moratorium

May 25, 2023
Categories
Top Posts

Local pols filling old budget holes with massive COVID aid

December 8, 20221,490

This is not four years ago

November 10, 20221,317

Latest crime figures show a Milwaukee in trouble

March 23, 2023938

Legislature protects Milwaukeeans from $15-per-rider fare-free trolley folly

May 11, 2023760
Archives

Sign Up for Top Picks

Our weekly e-Newsletter with the latest items and updates

Connect with Badger Institute
  • Facebook
  • Twitter
  • YouTube
  • LinkedIn
About Us
About Us

The Badger Institute is a nonpartisan, not-for-profit institute established in 1987 working to engage and energize Wisconsinites and others in discussions and timely action on key public policy issues critical to the state’s future, growth and prosperity.

Facebook Twitter Instagram YouTube LinkedIn

Sign Up for Top Picks

Our weekly e-Newsletter with the latest items and updates

What’s New

A lawmaker lifeline from Evers’ broadband binge 

June 8, 2023

UW-Milwaukee Graduation Numbers for Black Students Plummet Even Further

June 1, 2023

Why public school-goers support choice

June 1, 2023

Natural gas and regulation in Wisconsin: a policy brief

June 1, 2023
© 2023 Badger Institute | Privacy Policy | Disclaimer | Sitemap

Type above and press Enter to search. Press Esc to cancel.

This site uses functional cookies and external scripts to improve your experience.

Privacy settings

Privacy Settings

This site uses functional cookies and external scripts to improve your experience. Which cookies and scripts are used and how they impact your visit is specified on the left. You may change your settings at any time. Your choices will not impact your visit.

NOTE: These settings will only apply to the browser and device you are currently using.

CRM Software

Customer Relationship Management Software

Google Analytics

Google Analytics is a web analytics service offered by Google that tracks and reports website traffic. Google uses the data collected to track and monitor the use of our Service. This data is shared with other Google services. Google may use the collected data to contextualize and personalize the ads of its own advertising network.

You can opt-out of having made your activity on the Service available to Google Analytics by installing the Google Analytics opt-out browser add-on. The add-on prevents the Google Analytics JavaScript (ga.js, analytics.js, and dc.js) from sharing information with Google Analytics about visits activity.

For more information on the privacy practices of Google, please visit the Google Privacy & Terms web page: https://policies.google.com/privacy?hl=en

Powered by Cookie Information