Tuesday, December 12, 2006

Ten square miles surrounded by reality

How can you write an article on the discrepancy between median incomes in Madsion and Milwaukee and fail to ask the most obvious question? To what extent is the increasing advantage enjoyed by Madison an artifact of the subsidies it receives from the rest of the state? In other words, to what extent is the difference the result of government employment?

The Journal Sentinel's front page story exploring the huge - and growing - difference in median incomes between Milwaukee and Madison dances around that issue. It acknowledges that Madison is a govenment town, but does not suggest that - or even ask whether - taking money from the rest of the state and spending it within the confines of Dane County in and of itself makes Madison a prosperous place. It may be that the unexamined assumption made in the article, i.e., that the presence of the UW's Madison campus, has fueled all manner of high technology start-ups in Dane County, but you wouldn't know it from reading this piece nor would you have the faintest notion as to how much of Madison's advantage is traced to this private activity as proposed to the public elephant that takes up much of Dane County. We do know, from a prior piece, that the proportion of Madison's workforce drawing a public paycheck is a bit over twice as high as in Milwaukee. We also know that private companies in the Hotline 1000, Forbes 500 or IndustryWorld 500, are disproportionately likely to be located in Milwaukee as opposed to Madison. While these lists might miss bold new start-ups, it is another hint that the public trough may be the source of Madison's prosperity.

That the difference between Madison and Milwaukee has apparently increased could be a result of the "information" economy or it could have something to do with the growth of state government and its relative immunity from the competitive pressures. I don't know the answers, but, at least, I know that these are fairly obvious questions.

5 comments:

jp said...

It is a sorry article.

Dad29 said...

Perhaps the most peculiar aspect of the article was the claim that there's a lot of "manufacturing" in the Madison-area economy.

....it boggles the mind. Even WMC can't swallow that line, which was also reported in the article.

It's gummint, hands-down.

jp said...

This seems like a simple comparison of fruits (apples and oranges.)
According to Wednesday’s Journal editorial, Milwaukee’s peers are cities like Pittsburgh, Indianapolis, and St. Louis.

Anonymous said...

"To what extent is the increasing advantage enjoyed by Madison an artifact of the subsidies it receives from the rest of the state? In other words, to what extent is the difference the result of government employment?"

You really haven't any much research before pounding the keyboard, Rick. What distinguishes Madison from Milwaukee is the development of the "brain" economy in Madison while the "metal bending" economy of Milwaukee goes further into the tank.

Take a look at the Research Park on the west side of Madison, which helps move ideas from the science laboratory to the market. In a little over a decade the Park has generated something like 5,000 jobs paying an average salary of around $65k.

The growth at the Research Park is about to move to warp speed as the third embryonic stem cell company is launched.

Yes, the state kicks in part of the budget for the University of Wisconsin, but the level of state support is now less than 20 cents on the dollar, vs roughly 50 cents on the dollar thirty years ago. Most of the growth has been finance by private contributions and research dollars which are won competitively. What was once a largely state-supported institution has become highly entrepreneurial. There is roughly $1 billion in construction underway on campus right now and another $1 billion in planning and the level of state support for this building boom is roughly 1/4 of the cost.

Too bad that your employer Marquette can't hold a candle to the great state university in generating ideas which translate into jobs and higher income for Southeastern Wisconsin.

I understand that petty jealousy is at the route of much of your thinking, but do a little research before you type next time.

Anonymous said...

That was the first though that leapt out at me as well. A fairly obvious line of reasoning like that being utterly ignored is one of the many reasons I canceled my subscription to the Journal years ago.