A dream derailed - Milwaukee Journal SentinelA dream derailed THE MILWAUKEE JOURNAL SENTINEL A...

A dream derailedTHE MILWAUKEE JOURNAL SENTINEL

A reprint of a series that ran December 5-7, 2004

GARY PORTER / [email protected]

Frank Thompson came from Alabama in 1965 to work at the industrial flagships A.O. Smith and Allis-Chalmers, untilthe plants shut down. Now, he owns a housing rehabilitation business, Thompson Vision 2000 Inc.

SSPPEECCIIAALL RREEPPOORRTT:: The region’s economy has beenstunted and its future imperiled by a job loss worse than the

Great Depression inMilwaukee’surban center.Hit by a

global train

’40’47 ’00’01

MANU-FACTURING

JOBS

BLACK POPULATION

36,422

133,051

8,821

220,432

CITY OFMILWAUKEE

By JOHN [email protected]

o major urban center in America has suffered as much as Mil-waukee’s from the economic upheaval of a globalizing economy,an exhaustive analysis by the Journal Sentinel has found. No

other African-American community worked as intensively at manu-facturing products that are no longer made here, or was less prepar-ed for a historic shift from unskilled labor.

In little more than a generation, Milwaukee has morphed from anEl Dorado of unrivaled opportunity for African-Americans — and abeacon for their middle-class aspirations — to a locus of downwardmobility without equal among other big U.S. cities.

The result: A depression in the region’s urban core far more se-vere than the Great Depression of the 1930s.

Please see ECONOMY, 2S

N

ABOUT THE SERIESFor years, folks in Milwaukeehave blamed one another forthe region’s racial disparityand the growing gapbetween rich and poor. Yet,a generation ago, Milwaukeeoffered hope, opportunity andjobs to people of all races.What changed?

A special, in-depth report bythe Journal Sentinelexamines that question overthe next three days.

PART 3EmergingmarketsA new generation ofleaders is advancingmarket-driven21st-century solutions forpoor neighborhoods.Promise is seen in thecity’s central location, lowtransportation costs,cheap land and proximityto universities and theideas they incubate.

PART 1Hit by a globaltrainAn analysis of a half-century of data for thenation’s largest citiesshows that no urbancenter fell as far, as fast,as hard as Milwaukeefrom the upheaval of aglobalizing economy. Norwas any city’s black workforce less prepared for theshift from unskilled labor.

PART 2A dream derailedThe Milwaukee Roadliterally encircled theperimeter of Milwaukee’sblack community,defining where they livedand worked. When itderailed, so did thedreams of a wholecommunity. But now,there are signs the urbancore is getting back ontrack.

Go to www.jsonline.com/links/brown to read previous stories in the yearlongJournal Sentinel series, “Still Separate and Unequal.”

ON JSONLINE.COM

A DREAM DERAILED2S SPECIAL REPRINT MILWAUKEE JOURNAL SENTINEL

0

20

40

60

80

100

0 20 40 60

1 SAN DIEGO

2 LOS ANGELES

3 SAN FRANCISCO

4 BOSTON

5 WASHINGTON

6 NEW YORK

7 SAN ANTONIO

8 CHICAGO

9 DETROIT

10 DALLAS

14 MILWAUKEE

UNITED STATES

51.0

50.3

48.5

45.1

43.9

40.6

39.5

39.4

36.9

36.6

%

33.8

31.4

%

0 10 20 30 40 50

1 MILWAUKEE

2 DETROIT

3 MEMPHIS

4 CLEVELAND

5 CHICAGO

6 DALLAS

7 PHILADELPHIA

8 BALTIMORE

9 HOUSTON

10 NEW ORLEANS

42.9%

39.3

38.2

36.2

34.4

33.6

33.4

33.4

33.0

32.30 2 4 6 8 10

1 DETROIT

2 WASHINGTON

3 CHICAGO

4 INDIANAPOLIS

5 SAN FRANCISCO

6 CLEVELAND

7 MILWAUKEE

8 SAN DIEGO

9 PHILADELPHIA

10 BALTIMORE

$8,645

8,488

7,883

7,849

7,676

7,617

7,491

7,408

7,379

7,289

1 NEW ORLEANS

2 MEMPHIS

3 PHOENIX

4 SAN ANTONIO

5 ST. LOUIS

6 DALLAS

7 HOUSTON

8 BOSTON

9 MILWAUKEE

10 CLEVELAND

UNITED STATES 35.0%

43.7

41.1

36.5

36.4

31.2

29.8

29.7

28.4

27.4

27.2

%

0 10 20 30 40 50

UNITED STATES $6,308

’40 ’00’60 ’80

UNITED STATES 33.0%

THE RAPID RISE AND FALL OF THE BLACK

BLUE COLLAR WORKER

IN MILWAUKEE

MANUFACTURING JOBS

The black migration to Milwaukee came significantly later than in other Midwest cities ...

... and the blacks who moved here were not as well- educated as those in many other major U.S. cities...

... many blacks in Milwaukee took jobs in manufacturing, more than in any other major city in the United States ...

... because manufacturing was booming, median family income among Milwaukee blacks was nearly 19% higher than the national average ...

... and black poverty was significantly lower than the national average ...

DETROIT81.2%

ST. LOUIS51.0

CLEVELAND50.5

MILWAUKEE36.9

CHICAGO36.4

PITTSBURGH27.0

INDIANAPOLIS25.4

AS A PERCENTAGE OF TOTAL POPULATION

BLACK POPULATION IN MILWAUKEE ANDOTHER MIDWEST CITIES, 1940 to 2000

AS A PERCENTAGE OF ALL BLACKS25 AND OLDER IN 20 LARGEST U.S. CITIES

BLACK ADULTS WITH AT LEASTA HIGH SCHOOL DIPLOMA, 1970

AS A PERCENTAGE OF BLACK LABOR FORCE

BLACKS IN BLUE COLLAR JOBSFOR 2O LARGEST U.S. CITIES, 1970

IN 1970 DOLLARS

MEDIAN FAMILY INCOME OF BLACKSIN 20 LARGEST U.S. CITIES, 1970

AS A PERCENTAGE OF BLACK POPULATION

BLACK POVERTY RATE IN 20 LARGESTU.S. CITIES, 1970

Milwaukee’s economy, which prospered as a world-class industrial powerhouse, changed radically in little more than a single generation, and few felt the changes as acutely as its African-American laborers.

Source: U.S. Census Bureau ALFRED ELICIERTO/[email protected]

Change magnified in cityECONOMY, From 1S

In fact, Milwaukee’s working-ageblack men have suffered almost twicethe drop in employment that the na-tion endured in the Depression. Thecity’s black male employment rateplummeted by 21 percentage pointsfrom the peak of America’s industrialmight in 1970 to the most recent cen-sus in 2000 — nearly double the 13percentage point decline in the na-tional employment rate from 1929 tothe Dust Bowl trough of 1933.

In this 50th anniversary year of theU.S. Supreme Court’s Brown vs.Board of Education desegregationruling, as communities across thecountry undergo a self-examinationof their racial progress, a fresh analy-sis of a half-century of census reportsand economic data for the nation’slargest cities reveals that none oftheir urban centers fell as far, as fast,as hard.

Visitors familiar only with Milwau-kee’s graceful downtown architec-ture, shoreline parks and clean thor-oughfares might not guess that thecity harbors racial disparities thatexceed those in Detroit, Philadelphiaand other archetypes of American ur-ban blight. Despite its roots as a pro-gressive Northern city that oncelured laborers of all races with abounty of family-supporting jobs,modern Milwaukee falls to the bot-tom of nearly every index of socialdistress.

■ In 1970, at the city’s industrialpeak, the black poverty rate in Mil-waukee was 22% lower than the U.S.black average. That turned around by2000, when the black poverty rate was34% higher than the national figure.Among the nation’s 20 most populouscities in 2000, Milwaukee had thehighest rate of black poverty.

■ In 1970, the median family in-come for African-Americans in Mil-waukee was 19% higher than the U.S.median income for black families. By2000, the black family income in Mil-waukee was 23% lower than the na-tional figure. In the 2000 census, Mil-waukee fell to 49th among the na-tion’s 50 largest metro areas in racialdisparities in income.

■ Milwaukee had the highest blackunemployment rate of the major cit-ies surveyed in 2002 by the Bureau ofLabor Statistics. The bureau alsofound that 59% of Milwaukee’s blackmales 16 and older were idle, and thatthe city’s black unemployment ratewas more than three times its whiteunemployment rate.

■ In 2003, an estimated 48% of Mil-

waukee black children under age 5lived in poverty. Nationally, the Cen-sus Bureau estimated that 39% of allblack children under 5 were livingbelow the poverty level.

■ Wisconsin — where three of ev-ery four African-Americans live inMilwaukee — has the nation’s high-est rates of black teenage births andblack incarceration, according to theKaiser Family Foundation and U.S.Justice Department, respectively.

A growing school of sociologiststraces direct links between the whole-sale obliteration of blue collar oppor-tunity and a chain reaction of collaps-ing social structures.

These sociologists are not measur-

ing issues of race, bigotry or welfareculture, which have long beenblamed for Milwaukee’s social ills.

They use the clean, empirical met-rics of economics.

What sets Milwaukee apart, theysay, is the force and pace of economicchange.

“I don’t need arguments of racial

discrimination or integration to ex-plain why Milwaukee does as badly,”said Andrew Sum, director of theCenter for Labor Market Studies atNortheastern University in Boston.

In an age of relentless global com-petition, Sum says, Milwaukee’s Afri-can-Americans have experiencedmore acutely the same dislocationthat small factory towns undergo

when they abruptly lose their indus-try.

“When you deindustrialize whitetowns, you see the same phenome-non,” Sum said. “Earnings fall. Mar-riage rates go down. Out-of-wedlockbirthrates rise. You see the same be-havior as you would in what we nor-mally attribute as the urban under-class.”

Before he agreed to be interviewed,Sum independently analyzed Milwau-kee’s census data in his own comput-erized “regression model” that com-pared the city’s demographic, educa-tional, economic and labor-marketvariables with those of the nation’s 30



Children eat lunch in the cafeteria at Lee Elementary School, 921 W. Meinecke Ave., where 95% are served free or reduced-rate lunches, making it one of the 20 poorest publicelementary schools in the city of Milwaukee.

“When you deindustrialize white towns, you see the samephenomenon. Earnings fall. Marriage rates go down. Out-of-

wedlock birthrates rise. You see the same behavior as you wouldin what we normally attribute as the urban underclass.”

Andrew Sum, director of the Center for Labor Market Studies at Northeastern University in Boston

0

5,000

10,000

15,000

20,000

25,000

30,000

$35,000

1970 1980 1990 2002

MILWAUKEE AND THE NATIONBLACK FAMILIES’ MEDIAN INCOME

In 1970, the median annual family income among black families in Milwaukee was 19% higher than the U.S. figure. But by 2000, Milwaukee black families’

income had dropped to 23% less than the national figure.

Milwaukee median black family income

U.S. median blackfamily income

Source: U.S. Census Bureau Journal Sentinel

23%LOWER

$25,728

$33,255$33,246

$27,996

ALL FIGURES IN 2000 DOLLARS

19%HIGHER

0

10

20

30

40

50

1970 1980 1990 2000

MILWAUKEE AND THE NATIONAFRICAN-AMERICAN POVERTY RATE

In 1970, the black poverty rate in Milwaukee was 22% lower than the U.S. figure. By 2000, poverty among blacks in Milwaukee was 34% higher than the

national figure.

U.S. poverty rate

Milwaukee poverty rate


34%HIGHER

24.9%

33.3%35%

27.1%

22%LOWER

PERCENTAGE

Helen Fifer (left), who lives across the street from Lee School, came withher parents from Alabama to Milwaukee as they followed the lure of goodfactory jobs. Bessie Sumlin came in 1955 from Arkansas for the samereason. Both have seen the city in its boom years and bust years.

A DREAM DERAILEDMILWAUKEE JOURNAL SENTINEL SPECIAL REPRINT 3S

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1 SAN JOSE

2 AUSTIN

3 SAN FRANCISCO

4 LOS ANGELES

5 SAN ANTONIO

6 HOUSTON

7 NEW YORK

8 SAN DIEGO

9 BOSTON

10 PHOENIX

20 MILWAUKEE

UNITED STATES

28.0

19.0

18.1

17.1

17.0

15.9

15.8

15.7

15.6

15.2

%

9.1

14.3

%0

20

40

60

80

100

120 118,600

91,400

77,900

63,900

46,46736,422

’67 ’77 ’82 ’87 ’97 ’01

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1 SAN JOSE

2 SAN DIEGO

3 SAN FRANCISCO

4 AUSTIN

5 NEW YORK

6 BOSTON

7 INDIANAPOLIS

8 PHOENIX

9 SAN ANTONIO

10 JACKSONVILLE

20 MILWAUKEE

UNITED STATES

$63,866

38,661

35,943

35,685

35,409

35,052

34,536

34,493

33,675

33,640

$25,728

33,255

0 10 20 30 40

1 MILWAUKEE

2 CHICAGO

3 PHILADELPHIA

4 LOS ANGELES

5 BALTIMORE

6 MEMPHIS

7 DETROIT

8 NEW YORK

9 HOUSTON

10 SAN FRANCISCO

UNITED STATES 24.9%

33.3

29.4

28.5

28.0

27.3

27.1

26.4

25.7

25.3

25.1

%

0 10 20 30 40

1 CHICAGO

2 MILWAUKEE

3 LOS ANGELES

4 PHILADELPHIA

5 DETROIT

6 NEW YORK

7 BALTIMORE

8 SAN FRANCISCO

9 MEMPHIS

10 DALLAS

UNITED STATES 11.6%

18.2

16.6

15.5

14.9

14.7

14.2

14.2

12.1

11.9

11.6

%

0 20 40 60

1 CHICAGO

2 BALTIMORE

3 SAN FRANCISCO

4 PHILADELPHIA

5 LOS ANGELES

6 DETROIT

7 MILWAUKEE

8 NEW YORK

9 BOSTON

10 MEMPHIS

55.0

53.3

53.0

52.6

52.6

51.9

50.2

49.0

46.4

44.9

%

UNITED STATES 46.4%

... but starting in 1967, Milwaukee lost nearly 83,000 manufacturing jobs, a 69% decline ...

... and by 2000, the income of blacks in Milwaukee dropped to the lowest of the major U.S. cities ...

... before long, Milwaukee’s blacks had the highest poverty rate among major U.S. cities ...

... and one of the highest per- centages of black men without jobs ...

... the second highest unemployment rate in the nation ...

... meanwhile, blacks in Milwaukee continue to lag behind those in other major cities and the U.S. ineducation.

IN 2000 DOLLARS

MEDIAN ANNUAL FAMILY INCOME OFBLACK FAMILIES IN TOP 20 CITIES, 2000

AS A PERCENTAGE OF BLACK POPULATION

BLACK POVERTY RATE IN 20 LARGESTU.S. CITIES, 2000

AS A PERCENTAGE OF LABOR FORCE

BLACK UNEMPLOYMENT RATE IN2O LARGEST U.S. CITIES, 2000

PERCENTAGE

BLACK MALES OLDER THAN 16 WHO ARENOT EMPLOYED OR IN THE LABORMARKET IN 20 LARGEST U.S. CITIES, 2000 AS A PERCENTAGE OF ALL BLACKS

25 AND OLDER

BLACK ADULTS WITH AT LEAST ABACHELOR’S DEGREE IN TOP 20 CITIES,2000

MANUFACTURING JOBS IN MILWAUKEE,1967 TO 2001

Source: U.S. Census Bureau ALFRED ELICIERTO/[email protected]

ECONOMY, From 2S

biggest cities. “If you had anythinglike that in the rest of the country,you would call that a massive depres-sion,” Sum said.

It is not just a black problem, saidHarvard University professor Mi-chael E. Porter, a globalization econo-mist who founded the Initiative for aCompetitive Inner City, a Boston-based non-profit corporation that ad-vises distressed cities in the UnitedStates and Britain.

Lazy traffic and a profusion of “ForLease” signs downtown reveal moreat stake than the lives of those wholive only a few miles away in concen-trated poverty and fractured families.The crisis in the central city stuntsgrowth across the entire region,warding off investment, keeping visi-tors at bay, draining the tax base, di-verting resources, rendering broadswaths of the city’s commercial realestate unused and its labor force idleand unproductive.

“I can tell you quite categorically:Unless Milwaukee is able to create avital inner-city economy, it will nothave a vital regional economy,” saidPorter, speaking last year to Milwau-kee’s business and political leaders.

Reliance on low-skill labor

The Journal Sentinel’s economicportrait shows that black Milwau-keeans were downsized with unprece-dented force because they relied moreon low-skill labor than African-Amer-icans in any other American city,North or South. They had come northfrom a Southern agricultural society,and many hadn’t finished highschool. A large number were share-croppers. Yet they could find anabundance of work in a smokestack-and-brewery city once known as the“toolbox to the world.”

By 1970, 43% of black Milwau-keeans drew paychecks as industriallaborers — punch press operators,riveters, assembly-line workers, fork-lift drivers. The work was unglamor-ous but paid the mortgage and, on oc-casion, the children’s college tuition,as well. Only Detroit, with 39%, cameclose to Milwaukee’s blue collar bon-anza for black workers.

Milwaukee was a phenomenal jobmachine. Cleveland, the 34th mostpopulous city and Milwaukee’s clos-est peer today in terms of economicdisparities in its urban core, didn’temploy as large a share of its blackpopulation in its industrial heyday.

Thousands of black Milwaukeeans,many just out of the Army, workedtheir way toward the middle class inthe decades that followed World WarII. They held jobs at blue chip stal-warts such as Allis-Chalmers, Briggs& Stratton, Schlitz Brewing, A.O.Smith and American Motors.

In the 1980s, however, the boomgave way to a scorched-earth bust.

Milwaukee lost more than two out ofevery three factory jobs it had in 1970— a disappearance of more than80,000 jobs. The number of lost jobsamounts to more than one-third ofthe city’s current black population.

Today, retired laborers struggle toperpetuate the vision that carriedthem from the fields to the factories,the dream that they had hoped wouldlift their children from the factoriesto the universities. Those first-generation laborers see their sonsand grandsons in a different world —more than half of the city’s working-age black men are idle — withoutwork, not looking for work, disabled,retraining or behind bars.

Men who cannot put dinner on thetable also cannot be role models, fa-thers or husbands, said Sum, at theCenter for Labor Market Studies. Thecrucial years when a young manleaves home, makes a living and getsmarried are postponed indefinitely.Men are more likely to live at home,less likely to get married and morelikely to associate in local groups ofsimilarly idle working-age men.

More success for women

Black women in Milwaukee histori-cally have relied to a lesser degreethan men on manual labor and man-aged a more successful transitioninto today’s economy. As a result,black men operate in a labor marketstatistically distinct from women,

even within the same city. For everyseven black Milwaukee men whohold a job, there are 10 black womenwith work. It’s the most lopsidedman-to-woman employment ratio forthe black population of any big cityin the nation, according to Sum’sanalysis of 2000 census data.

“I can always find work, and I don’thave a high school diploma,” said VelMoore, 46.

She relies on temporary agencies tohelp cover medical costs incurred byher 15-year-old son, Marcel, who wasstruck by a car and has needed threebrain operations. Moore herself suf-fered a stroke and has had heart sur-gery. And yet neither of her two olderbrothers, who had more education

than she did, holds a job. The extend-ed family lives together with its73-year-old mother on the northwestside and shares the same bus pass.

Her brother Edgar refuses to giveup. His résumé is polished, toutingrecent training in Microsoft skillsand an employment history assem-bling hydraulic parts (1997-2000) andworking at a Golden Chicken restau-rant (1976-1993). As Vel Moore speakson a recent November day, Edgarhustles out of the house to catch thebus for a job interview. He walkswith a cane because of leg and spinalinjuries from a 1996 accident.

Her other brother, Eddie, mean-while, cuts a neighbor’s lawn.

College-educated African-Ameri-cans bemoan the lack of opportunityand hurry to leave Milwaukee assoon as they’re old enough, said Mar-garet Henningsen, co-founder of Lega-cy Bank Corp., a black-owned centralcity bank.

“Economically, this is not a goodplace for blacks,” Henningsen, 57,said. “It’s a perception and a reality.I’m the oldest of 10 kids, and the restcouldn’t wait to get out of here.”

The Great Migration that carriedmillions from the rural South to theindustrial North began early in thelast century. By a quirk of history,however, African-Americans beganto arrive in Milwaukee in large num-bers only decades later. Their arrivalmostly coincided with the 1946-1973

Golden Era of the American econo-my, defined by economists as thepost-World War II period of unprece-dented prosperity. Migrants whofound work in Pittsburgh, Chicago orDetroit during the first half of thecentury had decades of steady workto secure homeownership and gettheir children educated before the na-tion began hemorrhaging heavy in-dustry.

The “Late Migration,” as local his-torians call Milwaukee’s influx,meant blacks needed to bridge thecultural chasm from sharecroppingto a new era of perpetual economicchange with exceptional speed. Fewwere fast enough. “Unfortunately inMilwaukee, that transition didn’t oc-cur,” said Cory L. Nettles, the state’scommerce secretary. “Many kids gotjobs that were more similar than dis-similar to their parents’.”

The later the arrival, the tougherthe circumstances.

“Black men came here with no edu-cation, from out of the fields, andworked in the tanneries until theyclosed their doors. And then theywere left with no job and no educa-tion,” said Bessie Sumlin, whoworked for five years in a Milwaukeetannery.

Her husband, James Sumlin, alsoended up on the short end of the latemigration. A native of Charleston,Miss., James Sumlin arrived in 1968without a high school education. Helanded a job at Blackhawk LeatherLtd., where he worked for 32 yearsuntil it shut down four years ago.Blackhawk, like dozens of other tan-neries, couldn’t compete with cheap-er Chinese rivals that are nearer tothe world’s biggest footwear factories.

Bessie and James Sumlin raisedfour children in Milwaukee. “Every-one I know who came from the Southis struggling,” Bessie Sumlin said.

In the commemorative year of the1954 desegregation ruling, most atten-tion has fallen on schools, not eco-nomics. The attention on education isnatural: Without schooling, chancesare slim of succeeding in a FirstWorld economy.

That helps explain why the notion


ABOUT THE STATISTICSThe statistics included in this story and theaccompanying graphics come from a varietyof federal and state reports released since1960 on the social and economic conditionsin Milwaukee, other major cities and theUnited States. In developing this report,Journal Sentinel database editor Mark Maleyanalyzed data on jobs, income, education,poverty and other areas from the U.S. CensusBureau, the Bureau of Labor Statistics, theWisconsin Department of WorkforceDevelopment and other government agencies.


Vel Moore (left) said she always manages to find work even without a high school diploma. Her two brothers, including Eddie Moore, areunemployed. Among black communities in America’s largest urban centers, Milwaukee’s has endured more fallout from a rapid loss of factories.

“Black men came here with noeducation, from out of thefields, and worked in the

tanneries until they closedtheir doors. And then they

were left with no job and noeducation. . . . Everyone Iknow who came from the

South is struggling.”Bessie Sumlin, who worked for five years in a

Milwaukee tannery. Her husband, James Sumlin,worked at Blackhawk Leather Ltd. for 32 years

before the plant shut down four years ago.

1967 1977 1982 1987 1997 200119630

20,000

40,000

60,000

80,000

100,000

120,000

140,000

MILWAUKEE AND SUBURBSSHIFT IN MANUFACTURING JOBS

From 1963 to 2001, the city of Milwaukee lost nearly 83,000 manufacturing jobs while the suburbs gained more than 30,000.

69% DECLINE

38% INCREASE

City manufacturing jobs

Suburban manufacturing jobs


0

2

4

6

8

10

12

14

16

18

20

1970 1980 1990 2002

MILWAUKEE AND THE NATIONAFRICAN-AMERICAN JOBLESS RATE

In 1970, the unemployment rate among African-Americans in Milwaukee was 17% higher than the U.S. rate. By 2002, black unemployment in Milwaukee was

75% higher than the national figure.

U.S. unemployment rate

Milwaukee unemployment rate

Source: U.S. Census Bureau; Bureau of Labor Statistics Journal Sentinel

75%HIGHER

10.2%

17.8%

8.3%

7.1%17%

HIGHER

UNEMPLOYMENT RATE IN MILWAUKEE COMPARED WITH U.S. UNEMPLOYMENTRATE, 1970–2002 PERCENTAGE

’40 ’50 ’60 ’70 ’80 ’90 ’00’67’63’47 ’72 ’77 ’82 ’87 ’97 ’00 ’01

250,000

200,000

150,000

100,000

50,000

0

8,821

220,432

133,051

36,422

AFRICAN-AMERICANS AND MANUFACTURINGPOPULATION NOW OUTNUMBERS JOBS

In the late 1940s, manufacturing jobs in Milwaukee outnumbered the city’s black population by about 15 times. By 2000, the numbers had reversed – there were

five times as many blacks as there were manufacturing jobs in the city.


BLACK POPULATIONMANUFACTURING JOBS


“Economically, this is not a good place for blacks. It’s a perception and a reality.I’m the oldest of 10 kids, and the rest couldn’t wait to get out of here.”

Margaret Henningsen, co-founder of Legacy Bank Corp., a black-owned central city bank

Sociologists see a domino effect from job lossECONOMY, From 3S

of using economics to understandMilwaukee’s racial inequalities re-mains novel.

“Many liberal explanations of so-cial inequality cite race to the exclu-sion of other structural variables,”argues Harvard University sociolo-gist William Julius Wilson, one of thefirst scholars to link globalizationwith the economics of the nation’s in-ner cities.

Sociologists such as Wilson assertthat economic evolution and rapid-fire deindustrialization set in motiona domino effect.

It starts as one household after an-other loses income and cannot pa-tronize neighborhood merchants,who go out of business. Storefrontsbecome vacant and unlighted, invit-ing crime. Housing prices plunge, orstay depressed, leaving owners with-out inheritance or equity for loans. Inthe U.S., those who lose their jobsalso lose their medical insurance.“We die from more preventable andtreatable conditions,” said state Rep.Barbara Toles, a Milwaukee Demo-crat, echoing statistics from theWashington-based National Institutesof Health.

Chronic financial uncertaintybrings family tension. Families gointo economic survival mode. Med-ical care, dental care, schoolwork, so-cial activities fall by the wayside.

Children who hear gunshots orfierce arguments at night have trou-ble concentrating in school the nextday. Life-and-death distractions posean acute factor in Milwaukee, wherethe per-capita homicide rate is almost21⁄2 times that of New York City.

Affecting outlook

The uncertainty of living with day-to-day risk takes a toll of its own. TheNational Bureau of Economic Re-search concluded in March that poorurban African-Americans, mindful oftheir statistical life expectancy, losethe incentive to invest in their owneducation or physical well-being.They become nihilistic.

“You tend to underinvest in your-self,” Sum said. “You get this fatalis-tic view on life. There’s a perceptionamong some young inner-city guysthat it doesn’t make sense to stay inschool because they don’t expect to bearound long.”

And then there’s a final twist: Chil-dren who fail to get degrees can’teven get the menial, low-skill jobsthat lured their ancestors north.

“Poverty is the biggest influence instudent achievement,” said Deb Lind-sey, director of assessment and ac-countability for Milwaukee PublicSchools. Citing decades of consistentfindings from a spectrum of nationalthink tanks and local school boards,Lindsey added, “It’s not a notion, buta fact.”

In his book “When Work Disap-pears: The World of the New UrbanPoor,” Wilson argues, “Many of to-day’s problems in the inner-city ghet-to neighborhoods — crime, familydissolution, welfare, low levels of so-cial organization, and so on — arefundamentally a consequence of thedisappearance of work.”

Economic upheaval also intensifiespre-existing urban ills, such as racialsegregation, said William Frey, a re-search fellow at the Center on Urbanand Metropolitan Policy at the Brook-ings Institution in Washington.

A reflection of the world

Milwaukee’s urban center lies atthe forefront of a historic shift that isreshaping the global economy, wid-ening income gaps and fostering astate of permanent insecurity.

The city became a blue collarboomtown because it was once a hot-bed of industrial innovation, a sort ofheavy-manufacturing version of Sili-con Valley. But when the industrialcombines went out of business, theMidwest economy splintered into aspectrum of smaller, more agile high-skill firms that no longer rely on mi-grant or immigrant labor.

Gov. Jim Doyle, laying out his eco-nomic vision, implores the state’sfirms to “compete on the high end” oftechnology, trade and global sophisti-cation.

Some of those jobs percolate down-town. But mostly they flourish insuburban office parks built on greenspaces with ample parking near free-way bypasses. Suburban countiesregistered a 200% job expansion dur-ing the 1970-2000 period of the city’sdeindustrialization.

By 2001, according to the CensusBureau, 75% of all manufacturingjobs in the four-county metropolitanarea were in Milwaukee’s suburbs,which represents a reversal from1963, when 60% of all manufacturingjobs were inside the city limits.

In theory, unemployed blacks sim-ply need to uproot from the city andfollow the trail of opportunity. Yet

few have left the city because theylack the education, skills, incomeand, in many cases, means of com-muter transportation.

Globalization is hastening a polar-ization into two distinct labor mar-kets: A First World market of skilledand white collar positions is concen-trated in downtown high-rises andsuburban business parks, while a20th-century urban work force com-petes for jobs with Chinese peasantswilling to work for as little as 25cents an hour. “It leads to culturaland economic isolation,” said Nettles,the commerce secretary.

American jobs in the 21st centuryincreasingly demand a college degreeor other high skill set. Only 39% ofblack men in the U.S. without a highschool diploma had a job in 2000; ofthose who had a college degree, 79%had a job.

In Milwaukee, only 8.4% of theadult black men hold a four-year col-lege degree — the lowest rate amongmajor U.S. cities.

Educational barriers don’t stopthere. About one-third of the city’sblack adults are high school dropouts— an estimated 35,000 people. Mil-waukee’s percentage of African-

Americans without diplomas is thesecond-highest among the 20 largestU.S. cities. And Wisconsin last yearrecorded the highest percentage ofblack eighth-graders who fell into thelowest category of reading and mathperformance, boding poorly for theirfuture.

Jobs of a different sort“The character and quality of

American job creation is changingbefore our very eyes,” argues Ste-phen S. Roach, chief economist forthe Morgan Stanley investment bank-ing group.

The transformation manifests itselfin the abundance of low-end jobs thatthe current recovery has created,Roach found. With the 2001 recessiondecimating both professional andmanufacturing jobs, a disproportion-ate number of the emergent jobs inthe recovery lies in restaurants, tem-porary service agencies, courier serv-ices, hotels and social-work agencies.“The great American job machine isnot even close to generating the surgeof the high-powered jobs that is typi-cally the driving force behind greaterincomes and consumer demand,”Roach found.

Milwaukee’s urban center, in par-

ticular, remains vulnerable to furtherrestructuring. As recently as 2000,Milwaukee retained the highest per-centage of black residents employedin blue collar jobs among the 20 larg-est cities.

The central city isn’t alone. TheMilwaukee region lags behind therest of the nation in the metamorpho-sis to a high-skill, post-industrialeconomy. The Progressive Policy In-stitute in Washington ranked metroMilwaukee No. 40 among 50 U.S. cit-ies in its broad Metropolitan NewEconomy Index, which measures theoverall number of technology jobs,scientists, engineers, patents, schoolsand venture capital. It trails Chicago(19), St. Louis (27), Detroit (28) andCleveland (33). Meanwhile, the Cali-fornia-based Milken Institute lastmonth reported that the Milwaukee-area economy slid to No. 163 among200 cities in an annual job-creationranking of best-performing cities.

Even Alan Greenspan, chairman ofthe U.S. Federal Reserve Bank inWashington, sounds worried. Thecentral banker, perhaps one of thelast to raise alarms about poverty,sees a worsening nationwide labor-market mismatch. “The effect of in-creasing concentration of incomes is

not desirable in a democratic socie-ty,” Greenspan told a congressionalpanel in July.

It’s a challenging environment fora new generation of civic leaders.One thing that unites the new leader-ship is a general awareness that theold models of urban rehabilitationdon’t work.

“When you start to look at severalgenerations relying on welfare, it’ssafe to say that welfare is not a viableoption or solution for helping peopleclimb out of poverty,” said Nettles,who calls himself “a poor black kidfrom Milwaukee,” but one whoearned a law degree.

In an age of record federal deficits,few expect relief from taxpayer-funded programs. And with an abun-dance of cheap labor in Mexico andChina, no one expects to lure majornew factories to Milwaukee and re-create the old model of big industrialcombines.

More than ever before, America’surban communities are left to theirown devices in a global economy thatrewards the strong and agile at theexpense of those who stand still.

In this hypercompetitive environ-ment, the seeds for Milwaukee’s reju-venation are being sown.

A ballet class rehearses at the Lapham Park Social Center on W. Walnut St. in this 1940s photograph; the social center served as a hub for many Milwaukeeans asthey settled into the area. Shops and nightclubs featuring national jazz acts once lined the street.

BOOM YEARSIN BRONZEVILLE

It was a period of unprecedentedprosperity. Economists definethe Golden Age of the Americaneconomy as the post-World WarII boom years of 1947 to 1973.

They were also the peak years forworkers in Milwaukee’s industrialurban heart.

A cultural enclave emerged on thenorth side with a legend that has longoutlived the prosperity, the night-clubs and the jazz. It was a time, resi-dents recall, when children common-ly carried musical instruments toschool and attended Saturday musicprograms.

Strolling through the commercialbustle and farmers markets of Bron-zeville, as black Milwaukee proudlycalled its entertainment district, wasa popular pastime.

The Lapham Park Social Center provided a place for socials and other activities that reflected the growingaffluence of the black community in the 1940s and ’50s. The stretch of W. Walnut St. from what was N. 3rd St.,now N. King Drive, to N. 10th St. used to be the cultural heart of Milwaukee’s black community.

An orchestra poses for a photo before rehearsal at the Lapham Park center,one of many activities in the once-vibrant neighborhood.

Many groups living around Walnut St. gathered at the social center, nowMetropolitan High School. Students there have found many historical photographs.

Part 2: A dream derailed

Ain’t you heard The boogie-woogie rumble Of a dream deferred?Excerpt from “Dream Boogie,” a poem by Langston Hughes, 1951


Tracks of the former Milwaukee Road lead from what was Allis-Chalmers Corp., bankrupt since the ’80s. Milwaukee’s freight trains ran around the clock to power America’s economy.

The once-mighty MilwaukeeRoad delivered raw materialsand laborers to the city’sthriving industries. Noinstitution better tells thestory of the city’sworking class,particularlythe tens ofthousands of African-Americans who rode the railsto new lives here just beforethe manufacturers wererunning . . .

Out By JOHN [email protected]

ack in the 1940s, Julius Foster left his farmin Tennessee, uprooted to Milwaukee andjoined an 8 million-strong grass-roots diaspo-

ra out of the rural South. “He didn’t sell foryears,” recalls his daughter, Sharon Adams. “Myfather loved that land so much.”

Mass migrations have shaped history since theslaves of Egypt sought a promised land of milkand honey.

And in the middle of the 20th century, word wasout across the South: For the working man, Mil-waukee was a promised land of opportunity.

Like the penniless Italians, Irish and Poles whoarrived decades before them, blacks ended upwith the hot, tiring and dangerous work. In re-turn, they got the best paycheck most had everseen and aspiration toward a black middle class

Please see BEER LINE, 6S

Bofsteam

R.I.P. TO:ALLIS-CHALMERS1111,,550000 JJOOBBSS

AMERICAN MOTORS44,,000000 JJOOBBSS

SCHLITZ BREWING22,,880000 JJOOBBSS

PABST BREWING22,,660000 JJOOBBSS

These four companies were amongMilwaukee’s 10 top employers in 1970.They no longer exist. For a snapshot of

the top 10 employers then and now,see Page 9S



Canadian Pacific Railway now operates the old Milwaukee Road line and makes one run a day to serve its last two customers on the North Line: Miller Brewing Co. (above) and Tower Automotive.

Line carried goods of a hundred industriesBEER LINE, From 5S

that flourished, if only briefly, in aself-sufficient community that be-came Milwaukee’s jazz-driven ver-sion of Harlem.

Foster worked in the vast switch-ing yards of the once-mighty Milwau-kee Road. The hometown railroadcarried Southern laborers on the lastleg of their northbound trek and of-ten gave them bottom-rung jobs oncethey arrived. If the railroad didn’thave an opening, the breweries, foun-dries and auto works relied on freshwaves of African-American recruitsto keep pace with a prolonged post-war economic expansion.

Perhaps no Milwaukee institutiontells the story of the city’s African-American working class and its side-tracked dreams better than itsnamesake railroad. The cast-ironicon epitomizes the enormity of whatthe city lost, how rapidly its econom-ic virility drained away, and gives aninsight into why this progressiveNorthern community bears a greaterconcentration of urban ills for Afri-can-Americans than any other majorAmerican city.

The Milwaukee Road grew up withthis smokestack city since their jointinception, and one kept the otherhumming. Milwaukee producedenough freight in the boom afterWorld War II to spawn the fifth-big-gest railway in North America, cov-ering 16 states, spanning the RockyMountains and reaching the Pacificshipping ports of Puget Sound.

“If it weren’t for the MilwaukeeRoad, Milwaukee as a city would nev-er have reached the industrial promi-nence that it did,” said Jim Scribbins,a retired Milwaukee Road executiveand author of five books about thecity’s eponymous railway.

Strange as it may seem in the 21stcentury, Milwaukee anchored its eco-nomic foundations on a 19th-centuryrailroad. Yet no one argued with thecity’s economic model in its heyday.More than Chicago, New York oreven Detroit, a bigger share of Mil-waukee’s African-Americans foundblue collar jobs during the nation’spost-World War II industrial peakthan blacks did in any other Ameri-can city, U.S. census figures show.

That cornucopia of low-skill oppor-tunity proved both a blessing and acurse.

The railroad, like the laborers whopowered it, was among the first tofeel the winds of change. Starting inthe 1970s and gathering force in the’80s, most of the companies that builtMilwaukee’s economy left town orwent out of business, casualties offast-paced economic Darwinism andthe dawn of globalization.

The city’s rails, which once shonelike the dreams of its migrants, lingeras rusting remnants. Many are de-commissioned or ripped out. Thosestill in use convey only a fraction ofthe traffic they once did. The 160acres of rail shops where Julius Fos-ter once worked are gone; as a corpo-rate entity, the Milwaukee Road itselfis extinct.

In the time it takes for scrubbybushes to grow like weeds betweenrail ties, Milwaukee lost its status asa city of unrivaled opportunity. Ananalysis by the Journal Sentinel,based on a half-century of census re-ports and other data, found that thewhiplash downsizing hit Milwaukee’sblack workers with unprecedentedforce because they relied more onsweat-and-muscle labor than blacksin any other American city.

“They had almost no chance toadapt,” said the daughter of the rail-road worker. Life in Milwaukee’s ur-ban core requires vision to see be-yond the ravages of a fast-changingeconomy, said Adams, who grew upwhen her neighborhood pulsatedwith economic self-sufficiency. Sever-al years ago, she moved into her girl-hood home on N. 17th St., leaving ajob in Rochester, N.Y., and joined anew generation of civic leaders whoare planting the seeds of the city’s re-birth.

For a migration borne largely byrail, the Milwaukee Road tells anoth-er story, as well. Sojourners from theSouth arrived in Milwaukee decadesafter black laborers began settling inother Northern cities.

The “Late Migration,” unique toMilwaukee, still haunts the innercity. It compressed the time for itsmigrants to adjust to a new economicparadigm even as they struggled withthe loss of the old one.

A railroad flowing in beerFoster’s adoptive city may not have

been dripping literally with milk andhoney.

But it was swimming lustily inbeer.

Back when Milwaukee was Ameri-ca’s uncontested brewing capital, theMilwaukee Road freighted cold liba-tions around the clock to a thirsty na-tion that reveled in its post-WorldWar II industrial supremacy. Of therailroad’s 10,000 miles of cross-coun-try track, the busiest branch covered

little more than 10 miles on the city’snorth side, and it served four of thecountry’s biggest breweries.

Those who worked on the railroadsimply called it the Beer Line. Its car-go defined the town in its heyday: Itferried Schlitz, “The Beer That MadeMilwaukee Famous”; the venerablePabst Blue Ribbon; blue collar Blatz;and Miller High Life, the “Cham-pagne of Beers.”

Prosperity careened through thecity with a rumble that shook thepavement. At the peak of summerbeer-drinking season, the north sidefreight line dispatched as many as 270boxcars each day to carry nothingbut kegs and bottles. Inbound car-riages hauled a steady procession ofhops, barley and empties.

At mid-century, Jos. Schlitz Brew-ing Co. towered as the world’s biggestbrewer. Schlitz’s private rail yards,just a few blocks from the heart ofdowntown, became the starting pointfor the fabled Beer Line.

Beer alone didn’t drive this one-time railroad town. From Schlitz, lo-comotives trailing 60 boxcars snakednorth along the Milwaukee River,where sidings curled off the maintrack to serve over 100 other indus-tries. It linked foundries, machine-tool shops, lumberyards, leather tan-neries and makers of engines, cast-ings, shoes, cardboard, aluminumcans, soap, batteries, furniture andsausages.

A motor city in its own rightMilwaukee at the time was like a

smaller version of Detroit. Trains onthe Beer Line stopped continuouslyat the sprawling auto works of Ameri-can Motors, General Motors and Del-co Electronics. Beer trains ran direct-ly through the 148-acre campus ofA.O. Smith factories — which in Fos-ter’s day welded undercarriages fornearly every American-made passen-ger car.

The Beer Line began life as a sepa-rate six-mile railroad in 1854. It was

soon connected with the five-mileNorth Line, jointly forming a contin-uous corridor of industry that arcedacross the north side and into the railyards in the Menomonee River valley,and from there to the rest of the na-tion. Breweries and factories settledalong the combined freight track theway that frontier towns used to growup along rivers and later along the in-terstate.

As ceaseless as the Beer Line was,it was only a single freight artery in aprofusion of branch lines and sidingsthat fanned across the city like arte-ries. A separate spur line extendedseveral miles westward to Allis-Chalmers Corp. and its cluster of ca-thedral-sized factories. Before its1980s bankruptcy, the maker of heavymachinery employed blacks by thethousands.

From the smoky heart of the railnetwork, in the industrial Menomo-nee River valley, Julius Foster shut-tled freight locomotives as if theywere the city’s economic lifeblood.

Co-workers said Foster wasn’t animposingly large or muscular man.But as a farmer, he was no strangerto physical labor. He refueled locomo-tives, serviced their brakes andswitched them in the yards.

“He had a limited formal educa-tion, but he insisted that his childrenbe educated,” said Sharon Adams.“He never missed a parent-teachermeeting. In college, he came up onparents’ weekend.”

“I don’t remember him missing aday of work,” said Aquine Jackson,who worked with Foster during the’60s. “Instead of taking vacation, he’dtake the pay instead.”

In the rail yards in Foster’s day, la-bor often was black. Porters andcooks were black. “Conductors werewhite. Engineers were white. But be-hind the scenes, to make it work, ev-eryone was African-American,” Jack-son said.

The same was true in the breweriesand factories. African-Americans col-

lectively became the city’s “industri-al proletariat,” in the words of JoeWilliam Trotter Jr., head of the histo-ry department at Carnegie MellonUniversity and author of “Black Mil-waukee: The Making of an IndustrialProletariat.” At the city’s foundries,where the work force predominantlywas black, the story was the same.“They fed the blast furnaces and per-formed the most tedious operationsin rolling mills that made rails forthe railroads,” Trotter wrote.

“I don’t want to romanticize themanufacturing jobs,” Sharon Adamssaid. “They were hard, they werephysically challenging, they reallydidn’t encourage much intellectualstimulation.”

The leather tanning trade, a by-product of Milwaukee’s meatpackinglegacy, hired African-American la-borers who were willing to work overpools of caustic lime that stripped thehair off rawhides. Rubber gloves,boots and aprons didn’t always pre-vent lime burns. Inside the tanneries,the stench was nearly intolerable.Railroad workers, who hauled haz-ardous chemicals in and out of thetanneries, called them “stinkhouses.”

“The tanneries took anyone,” saidBessie Sumlin, who worked for fiveyears in a Milwaukee tannery.

From 1950 to 1960, Milwaukee regis-tered the most feverish influx of Afri-can-Americans among any big city inthat decade, tripling its black popula-tion from 21,772 to 62,458. Migrantsarrived fresh from military service inAsia or Europe. Black sleeping-carporters carried newspapers fromNorthern cities and distributed “helpwanted” sections across the ruralSouth.

“There was no such thing as notgetting a job,” recalls Walter Whar-ton, 56. His stepfather, William Gra-ham, like hundreds of other black mi-grants, worked at American Motors


Sharon Adams asa child, sitting onthe knee of herfather, Julius Foster,at a Thanksgivingdinner in the late1940s. Her mother,Hattie, is at the headof the table.

Julius Foster (left) and brother-in-law CarltonGuice, shown in Milwaukee about 1950, leftTennessee in the ’40s. Foster worked at theMilwaukee Road; his brother retired fromindustrial giant A.O. Smith after 35 years.


From 1950 to 1960, Milwaukee registered themost feverish influx of blacks among any big cityin that decade, tripling its African-American

population from 21,772 to 62,458.

REBUILDING A SHATTERED NEIGHBORHOOD

BEER LINE, From 6S

just off Capitol Drive for decades.Graham’s labor helped pay for Whar-ton’s college engineering degree.

The Beer Line did more than keepthe north side factories humming. Itliterally encircled the perimeter ofMilwaukee’s black community. Likean economic circle of covered wag-ons, the Beer Line defined wherethey lived and worked. And at theheart of that rail-inscribed communi-ty was Walnut St., Milwaukee’s ownHarlem in its renaissance.

Workers exited the factory gates atSchlitz, crossed the street and walkeddirectly into the throngs on WalnutSt., a succession of hotels, restau-rants, record stores, jewelers, tailors,cleaners, law firms, barbershops andbeauty parlors. The Regal Theater, amovie palace, took its place in astreet-long string of black-ownedbusinesses.

But the hottest and most lucrativevenues were jazz clubs. The nameswere incantatory — the Moon Glow,the Savoy, the Flame, the CongoRoom, the Pelican Room, the BambooClub. Cab Calloway, Miles Davis, B.B.King and Duke Ellington playedthem. And the jazz giants came justas often to hear local musicians whonurtured a jazz-and-blues genre ofMilwaukee’s own. Musicians’ LocalNo. 587 existed solely to representblack jazz musicians, guarantee theirhealth benefits and keep the cabaretshopping.

Locals called them “black and tan”nightclubs — meaning black andwhite jazz aficionados from all cor-ners of the city frequented the black-owned cabarets long before the restof Milwaukee extended a welcome toblack patrons.

A neighborhood for familiesJulius Foster chose this community

to raise his family. Many called itBronzeville. “The commercial stripswere incredibly vibrant,” Adams re-calls. She admits, though, that blackshad little choice where they lived.When the black migration began, Mil-waukee homeowners enshrined theirethnic homogeneity with propertydeeds that prohibited black owner-ship. Most of the city and its suburbswere off limits to its new laborers.

But the Central European Jews,who lived near Walnut St. before theblacks arrived, didn’t bother withsegregationist covenants. “We livedtogether like brothers and sisters. Werespected their faith, and they re-spected our faith,” said Reuben Harp-ole, a civic activist who is Catholicand black.

“At night, the beat of the musicfilled the air, and many living in thisarea felt their futures held promise,”according to “Work’n in the PromisedLand,” an exhibit at the WisconsinBlack Historical Society.

Diplomas were optional.“There always were dropouts, but

the system absorbed them, society ab-sorbed them,” said Aquine Jackson, aMilwaukee Public Schools adminis-trator who paid his way through col-lege by working in the switchingyards. “When those jobs dried up andleft the city, those people who dropout now become a burden on society.”

Milwaukee’s factory foremen hiredso many Southern sojourners thatthe city’s reputation long outlived thereality.

By the ’70s, the era of decline hadbegun. What started graduallyturned into an economic train wreck:Migrants piled into the city in searchof ever-more scarce entry-level labor.They arrived even as a new era ofeconomic globalization rendered theremaining jobs obsolete at an ever-in-creasing pace.

Driving down Walnut St. today, it’simpossible to visualize the economicself-sufficiency that once existed. It’sa nondescript avenue. Not a singleone of the jazz venues exists. The Reg-al Theater is a parking lot.

City planners plowed under muchof the neighborhood and many of itsblack businesses to make room forthe I-43 through-town expressway.

The demolitions of first-generationblack entrepreneurship took only afew months, but it handicappedgenerations to come. Think tanksthat study the phenomenon of entre-preneurialism all come to the sameconclusion: Children who grow up inthe home of business owners aremost likely to start businesses them-selves one day. When the freeway ob-literated a wide swath of Walnut St.,it left little legacy of business acu-men. Modern Milwaukee lags at 48thplace among the nation’s 50 biggestcities in the number of black-ownedbusinesses, according to U.S. censusfigures.

But the wounded spirit of entrepre-neurialism only compounded abroader generational rupture. Blackmen who came to Milwaukee express-ly to work see their sons and grand-sons living in a different world today.

Seven out of every 10 black work-ing-age men in the old Bronzevilleneighborhood are either unemployed,

not looking for work, disabled or inprison. Those figures, from the fourcensus tracts that constituted thearea in 2000, are probably optimistic:The government collected the 2000data at the height of an economicboom, before the latest recessiondrove another wave of industries outof business.

Like the city’s industrial heart, thefreight railroads began to die as in-dustry began moving to sprawlingsuburban sites near the interstate.Non-union competition from theSouth and from Mexico, China andother Third World countries gnawedat Northern union towns. Automat-ion replaced manual labor. Digitalcommerce supplanted 50-ton boxcarswith information highways.

End of the lineIn 1977, the Milwaukee Road de-

clared itself bankrupt. “Our businessin Milwaukee became almost non-existent,” Scribbins said.

Today, most of the tracks lead no-where. Abandoned sidings snakethrough dormant factory yards andindustrial ghost towns. Many EasternEuropean cities, still recovering fromdecades of Stalinist communism, ap-pear in better shape.

The Beer Line no longer reachesSchlitz. By the early ’80s, the tower-ing Schlitz complex became an idleand parched symbol of industrial fra-gility. All it took was the death in1976 of Robert Uihlein Jr., fourth-generation brewing scion of thefounding family. The new manage-ment switched to a cheaper fermenta-tion process that clouded the beerwith unfermented particles. Custom-ers bolted.

The Beer Line’s new owners rippedout four miles of track and jaggedlysawed them off in a rubble-strewn lotadjacent to the Lacey Love Lounge,which in turn lies just south of a fac-tory-sized Wal-Mart superstore.

Wal-Mart built the store on thefoundations of the old American Mo-tors plant, where AMC once workedon Ramblers and Pacers. In the 1960s,AMC’s 10,000 autoworkers made itone of the biggest factories in south-east Wisconsin and a major employerof African-Americans. TheUnited Auto Workers setwages and benefits. AMCkept the railroad busy withfive trainloads each day.The plant was closed whenChrysler acquired AMC in1987.

Wal-Mart brought workand commercial bustle tothe long-idle manufactur-ing site. After years of lo-cating stores in smalltowns and growing exur-ban communities, Wal-Mart’s move into Milwau-kee’s urban center showedthat it saw a vital market-place in an area long ig-nored by other retailers.

Still, an AMC workermade the equivalent of $25an hour in 1970, after ad-justments for inflation.Wal-Mart said its nationalaverage hourly wage forfull-time employees is $9.98,with some hourly workersmaking under $7. The re-tailer, which ranks as thenation’s largest private-sec-tor employer, has nounions. On a recent visit bya reporter, most of the staffworking at the Wal-Martwas black.

“There’s nothing thatconforms to the notion ofthem being upwardly mo-bile,” said Michael Rosen, chairmanof the economics department at Mil-waukee Area Technical College.

The Wisconsin & Southern sendsone freight train a day down the re-maining two-mile stump of the BeerLine, trailing four rattling boxcars ona recent run. It lumbers at 5 mph,making two stops before connectingwith Wisconsin & Southern’s upstatenetwork.

The Canadian Pacific Railway,meanwhile, snapped up what was leftof the Milwaukee Road, closing thedeal in 1985 and rechristening its for-mer rival the Soo Line. The CanadianPacific, which wanted the MilwaukeeRoad’s long-haul routes, ended upwith the North Line, the other half ofthe north side freight loop.

Not much business is left there, ei-ther. Steeltech Manufacturing Inc., ashort-lived effort by the city’s civicleaders to re-create heavy industryjobs for the city’s minorities, shut itsdoors in 1999.

That leaves only two other NorthLine freight stops. One is MillerBrewing Co., the last brewer of size inMilwaukee. With 1,800 workers, andan African-American employmentrate of 13%, even Miller no longer ap-pears on the top 10 list of the biggestemployers in the metropolitan re-



Larry and Sharon Adams articulate a vision of an emerging new Milwaukee; they founded the Walnut WayConservation Corp., dedicated to the rebirth of the historic urban heart. They raise bees as a pastime, keeping alivethe original vision that drew Southern migrants to Milwaukee as a promised land of milk and honey, offeringeconomic opportunity.

The block of N.17th St. just southof W. North Ave. hasbeen targeted by theWalnut WayConservation Corp.for renovation. Theorganization isworking onrehabilitating severalhomes in theneighborhood.

Clyde Adams and Dwayne Khaton hang drywall for the Walnut Way Conservation Corp. in what will become anew cultural center on N. 17th St. The 1907 building had been a boarding house for Southern migrants anddeteriorated into a drug house. In its next life, it will house a library, archives, literacy center, computer lab and apottery kiln.

A lush garden, shown at its peak in August, is run by the Walnut Way Conservation Corp. on N. 17th St. southof W. North Ave. It helps to fund projects undertaken by the organization to help renovate the neighborhood.

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North Milwaukee depotNorth Milwaukee towerWarehouse, “Stink House” tannery Power house for tanneryAsphalt distributorHanswer Soap Co.Not served by rail tracksMilwaukee Gas & Light pipe yardPaulson LumberPhoenix ManufacturingShroeder Oil Co.Behnke LumberStandard Tar ProductsCarson Pirie Scott warehouseSteel fabricating companyLumber dealer’s supply firmF.J. Christiansen Roofing Co.Steel salesColumbian Art WorksKraft Foods warehouse

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Owned by Holy RedeemerClosedClosedClosed

ClosedClosedJonco IndustriesBecame Benz OilClosedStandard Tar ProductsClosedClosedClosedF.J. Christiansen Roofing Co.Arco Building SystemsClosedClosed

Nabisco warehouseCunningham Ortmayer (heavy machinery)Glendale Supply Co.A. George Schultz Corrugated Box Co.Ladwig Ready-Mix CementWisconsin Face BrickWestinghouse warehouseBest LumberDwight PaperURTX shopsHarrison Oil Co.American Lace PaperPfizer Corp.Not served by rail tracksElectronics supply firmGM parts plantSchlitz elevatorSchlitz warehouse buildingSchlitz Terminal buildingContinental Can

2122232425262728293031323334353637383940

ClosedClosedClosedRock-Tenn Co.ClosedClosedClosedBest LumberNorth American Clutch Corp.ClosedClosedClosedClosed

ClosedClosedClosedClosedClosedClosed

Old power house for Schlitz terminalE.R. Godfrey food distributorDelco warehouseCapitol LumberWorden-Allen steel fabrication plantC&NW Capitol Drive YardGross-Calloway Fuel OilWells Badger Co.Milprint Corp.Telesmith EngineeringWTMJ Radio/TV stationAmerican Motors body plantAmerican Motors parts warehouseDowning Box Co.Helder & Bott Co.Gibson Yard OfficeCleaver Brooks Boiler Co.Sealtest dairySteinman LumberPlastic distributor

4142434445464748495051525354555657585960

ClosedClosedClosedOut of business since the 1950sClosedClosedClosedClosedClosedClosedWTMJ Radio/TV stationWal-MartWal-MartClosedClosedClosedCompo Steel Products Inc.ClosedMoved out in early 1960sSemco Laboratories Inc.

Not served by rail tracksInland Box Co.Globe Union, became Johnson ControlsHuebsch Co.“Snake track”ScaleTeam rackWhite Pearl MacaroniSteel Forms Inc.Schlitz Brewery complexWarehouseTeam trackBliffert LumberAdmiral appliance distribution centerMa Baensch FoodsGordon Park and poolGordon Park footbridgeCenter St. sidingCapitol LiquorShadbolt & Boyd warehouse

6162636465666768697071727374757677787980

Tulip Corp.C&D Technologies Inc.Mattech

Safeway Industries Inc. officeSup Design Ltd.Sup Design Ltd.Hernia Movers Inc. headquarters

ClosedClosedClosed

ClosedClosed

Milwaukee Lace PaperTews Lime & CementPipkorn CementEngine tracksHumboldt Yard officeCommerce St. team tracksHumboldt YardMaumee Coal“Roller Coaster”Schuster’s Department Store warehouseCoal yardTrostel TannerySchlitz wash house and icing facilitySchlitz keg beer facility prior to 1970Leads to Schlitz “C” houseBeer loading facilitySchlitz “C” house bottling plantTruck loading areaCullett (broken glass) loading chutePabst elevator (3 tracks)

81828384858687888990919293949596979899

100

ClosedClosedClosed

Closed

ClosedClosedMilwaukee Education CenterClosedClosedAurora Health CenterClosedClosedClosed

Schlitz grains plantSchlitz brew houseSchlitz general officesSchlitz elevator (corn chips, dark malt)Schlitz power plantSchlitz former bottle housePabst Shipping Center No. 30Commerce St. Power PlantSchlitz keg-brewing facilityCommerce St. Yard, used by PabstWarehouseTrack installed in “C” house for keg beerLoading tracks inside “C”Site of original depot and freight houseCommerce St. team tracks, used by PabstLincoln WarehouseJuneau Ave. team tracks used by Blatz

101102103104105106107108109110111112113114115116117

ClosedBrown Bottle Pub (Closed in 2004)ClosedClosedClosedAssurant HealthParking lotTime Warner CableWPS Insurance

Closed

Closed

FREIGHT RAILS THAT HAULED MILWAUKEE’S BLUE COLLAR DREAM INTO THE 1970sM I L W A U K E E R O A D ’ S B E E R L I N E

The once-mighty Milwaukee Road spanned 16 states with 10,000 miles of track and boasted some of the most avant-garde streamlined passenger cars of the railroad era. But its busiest branch was the Beer Line, a freight track that served all the big breweries and many of the city’s industrial champions. The Beer Line encircled the city’s black community with a corridor of

industry. Like the railroad, the factories relied on African-American labor. And, like the railroad, many of the factories went out of business.

N O R T HL I N E

R A I L YA R D S

BE E R

L I NE

Source: Milwaukee Road’s Beer Line, with maps by Bob Kwas and Art Harnack; file photos from Milwaukee Journal Sentinel photo archives ALFRED ELICIERTO/[email protected]; Research by STEVEN POTTER, Journal Sentinel

THEN NOW THEN NOW THEN NOW

THEN NOWTHEN NOWTHEN NOW

A.O. Smith Corp. (acquired by Tower Automotive in 1997)United RecyclingLogemann Bros. Co. Inc.Formerly Keystone Pipe, now United RecyclingKlein Metal Finishing Inc.Master Lock Co.Former Milwaukee Satellite Industries, a printing company;property now for saleCapitol StampingMid-City Auto Salvage & PartsWe Energies maintenance facility and payment centerKBTCS ConstructionBarrel Plating Service Inc.Formerly T.C. Esser Co., now abandoned

ALONG THENORTH LINE ...A

BCD

EFG

HI

J

KL

M

OPEN CLOSED

Points of reference

Railroad property

Rail lines formed a loop that defined the hub of African-American life and work throughout the post-World War II economic expansion

“Closed” means that facility is no longer operational, although the company still may be in existence elsewhere.

Factories, breweries and other industries that were served by the rail lines in the 1970s

R

R

R

R

R R

R R

R

R

RR

R

RR

RR

RR

R

A

BBBBBBB

HST

THST

THST

7TH

ST27

THST

27T

H

ST

N.

20T

H

ST.

LOCUST ST.

EUTONIA AVE.

A.O. SMITH CORP.

1970: 8,000 employees2004: 575 employees (Tower Automotive)

MenomoneeRiver W. PIERCE

NALVE.

N. 1

6TH

ST.

MILLER BREWING CO.

WALNUT ST.

1970: 2,400 employees2004: 1,800 employees

E

85

522

11

ukee

ALLIS-CHALMERS CORP.

1970: 11,500 employees2004: 0 employees

1100

UMB

R

Walnut St. was the fast-beating heart of African-American culture and commerce in the middle of the 20th century. Some called it Bronzeville. Some called it Milwaukee’s Harlem. Its jazz clubs, such as the Moon Glow and the Flame, were legendary.

WOR

WR

WR

CONTINENTAL CAN

1970: 950 employees2004: 0 employees

40

AMERICAN MOTORS CORP.


5253

SCHLITZ BREWING CO.


3738394170939497

PABST BREWING CO.


107110115

101102103104105106


Earl Ingram Jr. is among the small work force left at Tower Automotive.There are 500 workers now; he expects there will be 150 next year. A.O.Smith, the company’s predecessor, employed 8,000 people in 1970.

MILWAUKEE AREA10 LARGEST EMPLOYERS THEN AND NOW

Allis-ChalmersA. O. SmithBriggs & Stratton Corp.Allen-BradleyAC ElectronicsHarnischfeger Corp.American Motors Co.Schlitz BrewingPabst BrewingMiller Brewing

ManufacturingManufacturingManufacturingManufacturingManufacturingManufacturingManufacturingBreweryBreweryBrewery

11,5008,0007,4006,5005,0004,4504,0002,8002,6002,400

Source: Wisconsin Manufacturers and Commerce; Journal Sentinel research Journal Sentinel

COMPANYTYPE OF

BUSINESSLOCAL

EMPLOYEES

1970

Aurora Health CareCovenant Health Care SystemsRoundy’s Inc.M&I Corp.WE EnergiesGE HealthcareColumbia-St. Mary’s HospitalQuad/GraphicsKohl’s Corp.Northwestern Mutual Life

Health careHealth careGroceryBankingUtilityHealth careHealth carePrintingRetailInsurance

15,5009,2507,4006,8006,0005,8005,6005,3005,5004,600

2004


Earl Ingram Sr. retired from A.O. Smith 15 years ago. His son, Earl Jr., followed in his father’s footsteps at A.O. Smith in 1972. Eventually, carmakersmoved away from A.O. Smith’s heavy frames, and the ailing company was sold to Tower Automotive seven years ago. One of Tower’s last remainingcontracts is expected to move to Mexico next year.

One way of life ends; another beginsBEER LINE, From 7S

gion. White collar banks andhealth care providers domi-nate the list. In 1970, the rank-ings looked entirely different:It was all brewers and heavyindustry. Miller ships a trickleof its beer output over the rails— at most 3% — and puts therest on semitrailer trucks.

The only other holdout onthe North Line is the old A.O.Smith auto works, founded byone of Milwaukee’s first rail-road migrants.

Fresh off the boat from Brit-ain in 1854, Charles JeremiahSmith went to work for thenewly formed Milwaukee Roadas a machinist. When Smitharrived, Milwaukee was a hot-bed of industrial innovation,fostering a Silicon Valley-likeclimate that created blue col-lar jobs for well over a centuryto come. Smith quit the rail-road to start his own weldingand bicycle-frame shop. Hisstart-up expanded until hisson, Arthur Oliver Smith, pre-sided over the nation’s largestsupplier of automobile under-carriages.

A.O. Smith grew to becomethe city’s second-largest em-ployer. A sprawl of factoriesthat it built in 1909 handled or-ders for General Motors, Fordand Chrysler. By 1979, a thirdof its 8,000 employees wereblack. A.O. Smith managementhad promoted blacks to fore-men. Starting in 1970, theSmith Steel Workers electedtwo consecutive African-Amer-icans as union presidents,Timothy Long and Paul Black-man.

But Detroit’s need for light-er, more fuel-efficient cars thatbelched less pollution andcompeted better with Japanesemodels dramatically reduceddemand for Smith’s heavywelded frames. Tower Automo-tive Inc. acquired the plantseven years ago as A.O. Smithabandoned the undercarriagebusiness. Today, after years oflayoffs, Tower keeps on about500 workers, a third of themblack. Next year, Tower shiftsproduction of Dodge Ramframes to Mexico and willleave fewer than 150 jobs inMilwaukee.

“It’s over,” Earl Ingram Jr.,a late-shift Tower worker, saidmatter of factly. “What hope isthere if there are only 150guys?”

Ingram started at A.O.Smith in 1972, right out of highschool. “You almost didn’tneed a high school education,”he said. One of his first jobswas loading finished frames

onto flatbed rail cars, whichmoved through the factories“24 hours a day, seven days aweek.”

“Those rails used to stay hotall day and all night.”

He sits in the 1954-era SmithSteel Workers union hall,where footsteps echo in thehallways, gesturing out thewindow at the red-brick hulksoutside. “Some guys who justretired are going withouthealth insurance,” Ingramsaid.

His soft-spoken father, EarlIngram Sr., sits beside him.Earl Sr. was born in Arkansasand moved to Milwaukee in1948 after a tour of duty in Ja-pan and the Philippines. Theelder Ingram, who retiredfrom A.O. Smith after 39 years,raised 12 children on his unionwages.

Nine of Earl Ingram Sr.’schildren made it through col-lege, squeezing through hisgeneration’s window of oppor-tunity before it began to close.

In Milwaukee, that windowopened and shut faster than itdid in any other other bigNorthern industrial city.

One of the first African-Americans to work for the Mil-waukee Road was SylvesterJackson, a sharecropper fromPine Bluff, Ark. To get hired,the 18-year-old with a sixth-grade education defied theodds. When Jackson arrived inMilwaukee in 1920, the citywas 99.5% white. According toa census taken in the year hearrived, more Southern blackshad settled in Chicago by 1920than had settled in Milwaukeeby 1970.

But someone had to take thedirty jobs. At the end of a shift,steam locomotives pulled intorail yards with a cast-iron fur-nace scorching with glowingred coal. Jackson was paid to“drop the fire into a pit” andthen service the ovenlike en-gine, according to his children.

Sylvester Jackson arrivedearly enough to buy a car, owna house in Bronzeville andsend three of his six childrento college. He retired after 43years at the railroad, well be-fore its demise.

On the other end of the city’smigration was Willie HinesSr., one of the last black mento work for the MilwaukeeRoad. Hines, a sharecropperfrom rural Arkansas, didn’t ar-rive until December 1955.

His son, Willie Jr., used towonder at the scars burnedinto his dad’s arms and chest.As a boy, Willie Jr. came tolearn that they were the pricehis father paid to provide for

his family, earn a measure ofself-esteem and allow him “towalk in his manhood.”

Willie Sr. was a “boxcar cut-ter” in the rail yards, a com-mon job for African-Ameri-cans. He used an acetylenetorch to rip apart rickety box-cars so that skilled tradesmencould rebuild them and sendthem back into service. Glow-ing red shards of metal floatedoff the carriage stanchionsand occasionally drifted downWillie Sr.’s open collar.

“He’d press it against hischest until it burned out” andthen keep working, said WillieJr. “He had burn marks every-where.”

Physical sacrifice, however,didn’t save his job. The bank-rupt Milwaukee Road cut himloose in 1985 with a “vacationcheck” at age 47, after 22 yearson the job. The elder Hines,with an eighth-grade educa-tion, had to cut grass and takeodd jobs to help feed his 10children.

“Many didn’t get a propereducation because they didn’thave time to find their foot-ing,” said Willie Jr., who grewup in the Walnut St. communi-ty, which he now represents aspresident of the MilwaukeeCommon Council. “The foun-

dation of African-Americanmanhood was challenged whenhe was unable to provide forhis family.”

Speaking of his father, Will-ie Hines Jr. added: “He had thepride of making money andtaking care of his family.That’s what’s gone.”

At the end of the day, theeconomic problems land onthe doorstep of the publicschools.

Lee Elementary School, onthe cusp of the Walnut St. com-munity, serves free or reduced-price lunch to 95% of its stu-dents. That makes it one of the20 poorest of the city’s 129 pub-lic elementary schools.

Milwaukee Public Schoolstracks discount lunches as ayardstick of “social-economicstatus” among its schools. An-other MPS statistic tracks thenumber of students who arehomeless under the city’s defi-nition — those who don’t livewith their natural parents,cram with non-family intotemporary quarters and movefrequently during a semester.Lee last year registered 13homeless students.

The real number almost cer-tainly is higher, said AquineJackson, the youngest son of

Sylvester Jackson and a36-year veteran of MilwaukeePublic Schools. Schools city-wide harbor 1,370 homelessstudents, according to officialdata. “The number is grosslyunderreported because peopledon’t want to admit they’rehomeless,” Jackson said.

Living in the city with thehighest concentration of blackurban poverty imposes priori-ties different from those thatJackson knew as a boy. “Sur-vival of the family is para-mount, more important thanschool,” said Jackson, who di-rects the MPS Office of Neigh-borhood Schools. “There’s ahierarchy of needs in terms offood and shelter.”

For some, the Americandream is forgotten. Sociolo-gists commonly talk about a“reverse migration” of blacksto the South or the Sun Belt,where they reckon they standa better chance of finding jobs.

Others never lost faith.Sharon Adams, the daughter

of Julius Foster, belongs to anew generation of civic lead-ers who see untapped promisein the city but not through theurban renewal strategies ofthe last century. The resurrec-tion of Walnut St. dependsmore than anything else onthe rebirth of its own entrepre-neurial spirit, she says.

Asked several times in a se-ries of interviews to describelife in the most impoverishedurban center in big-city Amer-ica, she routinely changestack. Adams speaks often of“vision.” She is soft-spokenand widely read. She admiresBill Gates. What she laments isthe loss of “intergenerationalentrepreneurship” — of thestart-up spirit of Walnut St.

“My father always exposedme to his work,” she said.When times were tight, hestarted his own janitorial serv-ice and once even opened abar. “He raised the family inan entrepreneurial spirit.”

Preparing the way for renewal

Adams and her husband,Larry, founded the WalnutWay Conservation Corp.,aimed at the commercial andspiritual renewal of Milwau-kee’s oldest African-Americancommunity. New opportunitywill come calling, they reckon,if investors recognize the ur-ban center as a strategic assetand not a liability, one nearhighways, airports and down-town, near the universities,one with flowering communitygardens, walkable mixed-useurban spaces and the syncopa-tion of jazz clubs. “The entre-

preneurial spirit, when it’sworking well, ties to a creativepassion,” Adams said.

Larry Adams, drill and ham-mer in hand, is busy salvagingcondemned houses. His cur-rent project — the 48th derelicthouse he’s helped save fromdemolition — is just a rehabaway from becoming the newheart of Walnut St.

New life for an old house

Larry gives a tour of thesawdust-strewn 1907 structure.It started in a Jewish neigh-borhood as a “welcominghouse” for Southern migrants— a mission that offered cheapshelter until newcomers founda job and sent for their fami-lies. Later it deteriorated intoa drug house, fated for con-demnation.

It’s being reborn as a com-munity center.

A library and archives willmove into the first floor, hous-ing oral histories and histori-cal maps that go back to the1940s, showing each property.The basement gets a literacycenter and computer lab, witha pottery kiln in the back. Topreserve the building’s heri-tage as safe passage in theGreat Migration, the secondfloor will have an affordableapartment. The derelict plotnext door will grow an appleorchard. On the other side ofthe house is a community veg-etable garden, one of severalabandoned lots that now groworganic produce.

Architects from the Univer-sity of Wisconsin-Milwaukee,where Adams runs a commu-nity outreach institute, al-ready rebuilt the entire30-block streetscape, albeit un-der Plexiglas-enclosed scalemodels. Plans are under wayfor a nearby jazz nightclub andartists’ colony, the seeds of cul-tural rebirth.

Every summer, former resi-dents return for a grand reun-ion, arriving from California,New York and Texas.

Official assessed residentialproperty values shot up 10% inthe ward last year, suggestingan upswing is under way. It’salso prompted Walnut WayConservation to plan for “thevery real threat” of displacingpoor residents. “If you projectoutward another 10 years, youand I couldn’t afford to livethere,” said Rick Norris, whogrew up nearby on welfare buttoday runs his own start-upengineering design firm.

And Larry and Sharon Ad-ams, faithful to Julius Foster’svision of milk and honey, keephoneybees in their backyardas a pastime.

Arieona Willis (right), 4, bonds with her grandmother Donita Johnson atthe 16th annual Walnut St. Social Gathering Club picnic in August at CarverPark. Former residents from the neighborhood, the cultural heart of the blackcommunity through the 1960s, return yearly for the weekend block party.

Part 3: Emerging markets

“I’ve been called a black George Bailey.”Margaret Henningsen, co-founder of Legacy Bank


Margaret Henningsen, a founder and vice president of Legacy Bank, has a vision of what it will take to rebuild Milwaukee’s inner city.Legacy is the nation’s only bank founded by black women. Henningsen is among a new generation of civic leaders who want to revivethe urban core through entrepreneurialism and market-driven investment in untapped assets such as available land and central location.

A new generation ofbusiness and civic leadersaims to rebuild Milwaukee’score competitiveness

By JOHN [email protected]

he last time Milwaukeelaunched a conspicuous rescueeffort in an economically strick-

en neighborhood, it spared few ex-penses and emptied the toolbox of20th-century urban renewal strate-gies.

Steeltech Manufacturing Inc.opened in the early 1990s. In MetcalfePark, one of Milwaukee’s poorestneighborhoods, parks and houseswere cleared to make way for agleaming $32 million steel refinish-ing plant.

Civic and business leaders werehoping to replicate the old model offactory job creation for a Northernindustrial city. Steeltech trained theunemployed as welders. Minority

Please see A NEW MODEL, 16A

T

Sowingjobs

A DREAM DERAILED16A TUESDAY, DECEMBER 7, 2004 MILWAUKEE JOURNAL SENTINEL

Letting the market drive turnaroundA NEW MODEL, From 1A

managers received majoritystakes. The plant began lifewith a $66 million federal con-tract, five forms ofstate and federalfunds, loans from sixbanks, its own specialtax district and 42lawyers.

It failed spectacu-larly.

Steeltech declaredbankruptcy in 1999,eight years after itsinception, leaving anempty factory inex-plicably riddled withbullet holes and dis-crediting for manythe old urban policymix.

Steeltech’s demisehastened a 180-degreeideological turnamong Milwaukee’snext generation ofcivic and businessleaders. To plant the seeds ofeconomic rebirth in Milwau-kee’s urban core, in an age ofunprecedented global competi-tion, Milwaukee in the pasttwo years has moved to theforefront in accepting a newparadigm of market-driven ur-ban change.

In the process, the city’sfree-enterprise policy propo-nents are helping change thetone and tenor of the nation’sbig-city urban renewal debate.

“What we’ve been doing for50 years isn’t working,” saidArt Smith, who heads the Ini-tiative for a Competitive Mil-waukee.

Smith’s organization isyoung, small and upbeat, likethe companies it envisionsamid the shuttered factoriesand storefront churches of theurban core. Rather than trackthe known deficits of the innercity — poverty, drugs andcrime — the initiative aims topersuade corporate Americathat Milwaukee boasts moreuntapped competitive advan-tages than many might guess.

The initiative highlights anurban nexus of central loca-tions, low transportationcosts, cheap land and proximi-ty to universities and the ideasthey incubate. Initiative back-ers scorn zoning red tape andother regulations that handi-cap the industrial heart of thecity in competition withsprawling business parks builton bulldozed farmland.

Just as boardroom elite as-pire to the Fortune 500, Mil-waukee’s nascent entrepre-neurs strive for a listing inInc. magazine’s “Inner City100” — an annual ranking ofhigh-growth companies basedin distressed central cities.The IC-100 carries prestige:Few firms can boast the red-hot growth rates that qualifyfor a listing.

Starting up companiesCoakley-Tech LLC, a

5-year-old, $12 million start-up,is one Milwaukee companywilling to open its books andtake a shot at the list. Presi-dent Chris Illman feels athome in the “retro look” of arehabbed industrial plant onthe west side that churns outcustom orders of DVDs, CDsand print-on-demand books. Il-lman holds down his laborcosts: “We’re able to pay com-petitively, but at a proper in-ner city rate.”

Another urban entrepre-neur, Rick Norris, said he is“trying to grow a company andleave a legacy.” Norris, 47, was“born and raised in the Hill-side housing projects on wel-fare.” A high school mathteacher helped him into Mar-quette University, where heearned a civil engineering de-gree in 1980.

But Norris needed to leaveMilwaukee to experience first-hand a vibrant black entrepre-neurial culture. His first jobtook him to Polytech Engi-neers Inc., a black firm inCleveland, which opened hiseyes to “an abundance of Afri-can-American entrepreneurs,which I’d never seen before.”

Norris moved back and runsa 14-person consulting firm onthe west side — Norris & Asso-ciates Inc. “You rarely see oldblack wealth here,” he said.“When you go to other cities,you see the legacy of old blackwealth continuing to perpetu-ate the culture of enterprise.”

Smith agreed. “We have gotto drive entrepreneurship; wehave got to drive it in a major,major way,” said the56-year-old African-American

who runs his own travel agen-cy. Before Smith became anentrepreneur, he began his ca-reer in Chicago at the McDon-ald’s Corp., where he met oneof his early mentors, Ray A.Kroc, who founded McDon-ald’s at age 53.

Aware that Milwaukee needsa come-from-behind strategy,initiative staffers have begunto assemble a new urban revi-talization toolbox meant to cat-alyze the incubators of free en-terprise, regardless of the en-trepreneur’s race, while sup-porting existing companies inthe urban core.

Experts from Boston’s Initia-tive for a Competitive InnerCity, founded by one of Har-vard’s leading economic theo-

rists, have flown to Milwaukeeto draft long-term strategies.Last year, they published a60-page prospectus that mapsout business opportunities.The prospectus lists four sec-tors that hold the mostpromise in Milwaukee’s urbancore: back-office service firmsto support the region’s strongfinancial and insurance indus-tries; health services, whichfeed off the city’s cluster ofmedical technology industries;manufacturing, a Milwaukeemainstay that still employsone in five central-city work-ers in the city; and construc-tion, which can capitalize on abig slate of planned public-works projects.

Local entrepreneur awards

have emerged, in part to goadcompanies toward the nationalIC-100 rankings, as have localenterprise coaches who preachrisk. The Milwaukee Initiativeis coordinating efforts withventure capital fund managersto launch Midcities Invest-ment Management, a privatelymanaged fund that targetshigh-growth firms in Milwau-kee’s urban core. ManpowerInc., a world leader in flexiblelabor markets, is lending re-searchers to map out a strate-gy to lure firms that offerback-office outsourcing serv-ices.

The University of Wisconsin-Milwaukee and Marquette Uni-versity have provided urbanpolicy experts and are con-

touring curriculum into “ad-vancement tracks.” Eager tobreathe life back into unusedurban land, for example, Mar-quette is training minority stu-dents to find a new life for oldcommercial real estate. Mil-waukee Area Technical Col-lege wants to develop fast-track courses in constructionmanagement.

Government is expected totake a back seat while the pri-vate sector takes the lead.“Anything else is going back tothe old paradigm,” said Smith,a past president of the PublicPolicy Forum.

The initiative also has spentmuch of its initial energy con-ducting first-ever “competitiveassessments” of the economic

life that still ticks inside thecity’s urban heart.

“I think you’d be surprisedto find that there are some5,000 businesses in the inner

city of Milwaukee,employing 120,000people,” said Kather-ine M. Hudson, for-mer chief executiveof Milwaukee-basedBrady Corp. and oneof the initiative’smost passionate back-ers.

The “competitivestrategy” model of ur-ban rebirth refuses tosee the urban core inisolation from the re-gional Midwesterneconomy or the globaleconomy.

Hudson, who dra-matically increasedBrady’s global pres-ence in the ’90s, seesinner-city Milwaukeeas a “a magnet for in-

vestment by foreign firms whoare globalizing themselves.”

“Consider the inner city asthe final frontier for the U.S.in the age of globalization,”she said.

The percolation of profitablebusinesses remains more a vi-sion than a reality. EvenSmith, who runs the initiative,chose last year to move theheadquarters for his travel-service firm out of the oldSchlitz brewery complex,where he leased space in oneof 11 ZIP codes used to definedistressed urban areas. Key-stone Travel purchased officeproperty in suburban NewBerlin. “I’m still committed tothe city,” he said.

Competitor: The worldAt the heart of the initiative

is a recognition that the city’splace in the world economycontinues to change rapidly.“We’re competing with Shang-hai, we’re competing withBangalore,” said Rajan Shuk-la, program director at the ini-tiative.

America’s big cities havefew options apart from theirown innovation and vision.Mexico and China are ex-pected to continue to win thecompetition to lure new factor-ies. In an age of record deficits,few expect Congress to lavishtaxpayer money on new urbanprograms.

“There’s tons of literatureand research on how to startbusinesses in Third Worldcountries. There’s very littleon how to start and grow abusiness in the inner city,”said initiative general counseland business development offi-cer Christopher E. Ware.

Ware, 36, left Quarles & Bra-dy, one of the city’s elite lawfirms, to work for the initia-tive.

The Milken Institute, an eco-nomic think tank in Califor-nia, has begun referring toAmerica’s urban centers as“domestic emerging markets,”just as the transition econo-mies of eastern Europe andvast regions of Asia and LatinAmerica are considered globalemerging markets.

“We need to think of them asasset classes and investmenttargets and not as wastelands,”said Betsy Zeidman, directorof the Center for Emerging Do-mestic Markets at Milken.Zeidman is watching Milwau-kee as a bellwether of urbanchange. “You want to be inmarkets that no one else is in,or before they are saturated,”she said.

Nationally, 12.7 million jobsare within America’s inner cit-ies, representing 8% of the to-tal private-sector economy,according to a study releasedlast month by the Initiative fora Competitive Inner City,which also advises urban ac-tivists in nearly 20 other citiesin the United States and Brit-ain.

“Many people have thoughtthat the inner city was somekind of economic dinosaur —that the global economy waspassing it by, that all thegrowth inevitably had to be inthe suburbs,” said Harvardprofessor Michael E. Porter.

Porter, 57, founded the Ini-tiative for a Competitive InnerCity. He has spent his careerstudying how nations, regionsand corporations survive in anera of perpetual global compet-ition. Porter was tenured at 26as one of the youngest profes-sors in Harvard’s history andhas ties to the World Economic

Please see A NEW MODEL, 17A

BRINGING NEW LIFE TO OLD BUILDINGS

Correy Jefferson stamps out steel sleds at CapitolStamping, where he has been employed since August.Capitol moved into the Steeltech building at 2700 W. NorthAve., vacated when Steeltech declared bankruptcy.

Press operator Richard Gray stamps out go-cartsprockets at Capitol Stamping, where he has been workingfor about a year.


Roger Otto works at reconditioning an old train car in what was an Allis-Chalmers shipping building, where turbines wereloaded onto train cars. Otto used to work for Allis-Chalmers, which was one of Milwaukee’s largest employers, and now worksin the same building for Avalon Rail, which restores and customizes rail cars in West Allis.

A DREAM DERAILEDMILWAUKEE JOURNAL SENTINEL TUESDAY, DECEMBER 7, 2004 17A

“The social policy prescriptives have not really helped families break out of poverty.We should model what has worked for countless other ethnic minorities, which is

entrepreneurialism.”State Commerce Secretary Cory L. Nettles, who grew up as a “poor black kid from Milwaukee.”

A NEW MODEL, From 16A

Forum, the prestigious bodythat hosts a summit of financeministers and multinationalchief executives each Januaryin Davos, Switzerland. He trav-els perpetually.

He has found himself drawnto Milwaukee as a laboratoryof urban change. Porter freelyadmits that crime and un-skilled labor throw up big hur-dles to growth. Still, he said,“We shouldn’t be bashful aboutprofit and the market economybecause that’s the only sus-tainable way of addressingmost of these problems.”

Beyond the safety netPorter says social safety nets

are necessary for individualsbut that welfare programs can-not alleviate poverty, createjobs or even stall the city’s eco-nomic erosion.

Anne Habiby, co-executivedirector in Boston for the Ini-tiative for a Competitive InnerCity, said Milwaukee standsapart from the nearly 20 othercities her group has workedwith nationally. Milwaukee,she said, has rallied a broaderspectrum of civic, academic,business and government lead-ership behind the framework.Other cities, by comparison,are looking at only pieces ofthe puzzle while Milwaukee islooking at the whole puzzle,she said.

“Milwaukee is very differ-ent,” Habiby said. “Based onwhere they are economically,they have to work a lot hard-er.”

“I just don’t think socialservice programs were doingit,” said Margaret Henningsen,co-founder of Legacy Bank, atFond du Lac and North ave-nues on the north side, the na-tion’s only fully accreditedlending institution owned byAfrican-American women.

Legacy Bank epitomizes thenew economic paradigm in allits promise and limitations.

As a federally insured com-mercial bank in the heart ofthe black community, it existsto inject capital into expan-sion-minded businesses andcentral-city start-ups. LegacyBank began five years agowhen it acquired a colonnaded1928 bank edifice with a mar-ble-festooned lobby that spark-les today with a fresh $2.9 mil-lion renovation.

Opportunity measured in dollarsIn the past two years, Lega-

cy Bank doubled its assets to$99 million — proof, Henning-sen said, of bona fide opportu-nity in an area that otherbanks have ignored. It boasts alow rate of loan defaults.

Legacy Bank often finds it-self working with the buildingblocks of basic enterprise:mom-and-pop businesses, fill-ing stations, restaurants andconstruction firms. Innovative,knowledge-driven black firmsare harder to find. More of itsdeposits come from outside thecity and even outside the statethan from its immediate sur-roundings in the heart of Mil-waukee’s oldest black commu-nity, once called Bronzeville.

“I remember this neighbor-hood when it was thriving,”several decades ago, Henning-sen said. She grew up nearbyand admired the corner bankbuilding her whole life. “I al-ways wanted to be at this in-tersection because it’s theheart of the city,” she said.

“I’ve been called a blackGeorge Bailey,” she said, refer-ring to the 1946 film, “It’s aWonderful Life” in which thecharacter heads a tiny savingscooperative that struggles toprovide home and small busi-ness loans to the immigrantsand poor in a small town.

Robert E. Litan, vice presi-dent for research at the Kan-sas City-based Kauffman Foun-dation, a policy think-tankthat studies entrepreneuria-lism, says Milwaukee hasfound itself in a “vicious cy-cle” because it lacks an entre-preneurial tradition.

“The most important predic-tor is if someone in your fami-ly is an entrepreneur and ifthey have worked in the familybusiness,” said Litan, one ofthe nation’s leading research-ers on the character of Ameri-can entrepreneurialism. “It’snot in your genes; it’s in yourenvironment.” In Milwaukee,he said, “not enough kids growup living in an entrepreneuri-al family. They are already be-hind the eight ball.”

According to U.S. Census

Bureau data, the city lags at48th place among the nation’s50 biggest metropolitan areasin the number of black-ownedbusinesses per 1,000 black resi-dents. That puts Milwaukee atthe extreme of a nationalanomaly that finds only 4% ofall U.S. entrepreneurs are Afri-can-American.

Litan says new urban revi-talization strategies can com-pensate for a lack of mentors.“They need coaching,” Litansaid.

Keith Bailey, 37, was raisedby his mother in the centralcity. He finished high school,joined the Army and learnedthe dry cleaning trade as anapprentice. In 2000, he heardthat an elderly north side shopowner planned to close an es-tablished dry cleaning shop,and Bailey saw an opportuni-ty. But, like so many otherMilwaukee blacks, he had nohistory running businesses.Three banks denied him aloan.

But Legacy Bank didn’treject Bailey. Four yearslater, Bailey’s DryCleaning & LaundryService has doubledits annual revenue to$120,000. “This serv-ice is a ministry anda mission for mycommunity,” Bailey said.

Wisconsin’s 1996 welfare-to-work reforms spawned RobertCarroll’s basement tech start-up — Rhythms Software Sys-tems. Carroll, 56, a databasetechie by inclination, noticed aproliferation of street-cornerday care centers in his Sher-man Park neighborhood. Hewrote a program to managehigh-volume centers tailoredto central-city needs: It weedsjob applicants who don’t meetchild care qualifications andtracks as many as four adultcustodians who have clearanceto pick up a single child.

“It has to be very economi-cal because there are lots ofmom-and-pop day care cen-ters,” he said.

Milwaukee’s nascent enter-prise culture hamstrung Steel-tech, which was designed tocultivate minority entrepre-neurialism. “What we wantedto do with Steeltech was takethem out of the working-for-someone-else routine andmake them part owners,” saidFred G. Luber, chairman ofSupersteel Products Corp.,who helped conceive and fundSteeltech with his own capital.

City officials later concededthat Steeltech’s inexperiencedmanagers seldom hustled forcontracts. Luber said sloppy

bookkeeping caused the loss ofa major government contractthat could have kept it in busi-ness. Rather than accept per-sonal financial risk, like mostentrepreneurs, Steeltech’smanagers borrowed funds un-der a low-risk arrangementthat simply let them forfeitshares in a default. The absen-tee rate for hourly workers atSteeltech ran as high as 12%.

“Our dream of doing some-thing great for Milwaukeeended up crashing,” said Lub-er, 79. His firm, Supersteel,had stood to gain if Steeltechhad survived as a qualified mi-nority subcontractor for thelarger company’s Defense De-partment contracts. Instead,Supersteel lost $6.5 million in

the venture.“It was a pigsty,” said

Paul Cadorin, chief ex-ecutive of Capitol

Stamping Corp., whichacquired the

1 9 0 , 0 0 0 - s q u a r e -foot plant after Steeltech

failed.Shop-floor employees

randomly fired guns for rea-sons that Cadorin cannotguess. After Cadorin pur-chased the plant in 2001, hehired a crew to patch roofleaks. “They gathered over 200bullets and patched over 300bullet holes,” Cadorin said.Forklifts on the shop floor hadbeen rammed into the wallsand left holes “big enough topoke your head through,” hesaid.

Letting the market help

State Commerce SecretaryCory L. Nettles said the city’sAfrican-Americans made “alate crossover from the indus-trial to the professional econo-my.”

Nettles, 34, grew up as a“poor black kid from Milwau-kee.” Some of his playgroundpals never finished highschool, ended up in jail or ondrugs. Nettles graduated mag-na cum laude from Lawrence

University, earned a law de-gree at UW-Madison andworked at Quarles & Brady be-fore Gov. Jim Doyle appointedhim commerce secretary atage 32.

A stalwart Democrat,Nettles disavows old welfaremodels as an economic reme-dy. “The social policy prescrip-tives have not really helpedfamilies break out of poverty,”he said. “We should modelwhat has worked for countlessother ethnic minorities, whichis entrepreneurialism.”

Other cities are rediscover-ing free-market economics.The Kauffman Foundationlaunched a project in Octoberto cultivate urban start-ups inAtlanta, Cincinnati, Cleveland,Jacksonville and Kansas City.A small number of for-profitblack venture capital firmshave sprung into existence.

The Brookings Institution inWashington, shifting its atten-tion from rates of social dis-tress to rates of economicgrowth, is fine-tuning data-banks that for the first timetrack consumer and economicgrowth trends in the nation’sinner cities.

Inc. Magazine compiles itsannual Inner City 100 rank-ings in cooperation with theInitiative for a Competitive In-ner City.

“Our readers are exclusivelypeople who own and run theirown companies, and they arevery fascinated in the successstories of people like them,”said Inc. Executive EditorMike Hofman. Entrepreneursand investors, he said, trackan elite class of small busi-nesses called gazelles — com-panies that grow 20% eachyear for at least five straightyears, a level of growth neverreached by 15 of every 16 com-panies in the United States.

Only gazelles make the In-ner City 100. IC-100 companiesmust have headquarters in an“economically distressed ur-ban area” and $1 million min-imum in annual sales.

Average growth rates of thecurrent 100 clock in at 872%over the past five years. Thisyear’s No. 1 company was180’s, a Baltimore maker ofgloves and eyeglasses thatboasted 9,669% sales growthfrom 1998 to 2002. “That sug-gests that the theory that thereare unique competitive advan-tages to the inner city is true,”Hofman said.

29 in the runningMilwaukee has been absent

from the Inner City 100 since2000, when Smith’s travel agen-cy ranked No. 95. AlthoughSmith disqualified his firm bymoving to the suburbs, he isdetermined to get Milwaukeecompanies onto the list. He ca-joled 29 local firms this year toundergo the exhaustive appli-cation. Smith won’t release thenames of nominated Milwau-kee companies, saying the pro-cess is confidential. Winnersare to be announced at a ban-quet in Boston in April andpublished in the June maga-zine issue.

Milwaukee’s biggest chal-lenge, Porter said, is what hecalled an “inferiority com-plex.”

“We’ve got to put aside anynotions that Milwaukee is insome sense in a bad set of in-dustries,” he said.

Porter compared Milwaukeeto Finland: “It’s cold. It’s dark.They drink.”

For all the economic painMilwaukee has suffered fromlosing manufacturing jobs, itwas spared the worst of whatFinland endured.

The Soviet Union smotheredFinland throughout the ColdWar with war reparations andmarket domination. Whencommunism collapsed, Fin-land lost its biggest market.

Yet Finland turned its evi-dent disadvantages — vast un-populated expanses — into anasset. It became a world leaderin wireless communicationsthat don’t require expensivefixed land-based phone lines.Its paper companies have usedresearch and development tobecome fierce competitors inthe global market, purchasingmany companies in Wisconsin,America’s largest paper pro-ducer.

“What every region fights iscynicism and fatalism — thesense that nothing will everchange, that the region cannotbe successful,” Porter said.

For the past two years, theWorld Economic Forum in Ge-neva has ranked Finland asthe world’s most competitiveeconomy.

ABOUT THE SERIESFor years, folks in Milwaukee haveblamed one another for the region’sracial disparity and the growing gapbetween rich and poor. Yet, ageneration ago, Milwaukee offeredhope, opportunity and jobs to peopleof all races. What changed?

A special, in-depth report by theJournal Sentinel examines thatquestion over three days.

TAKING A CHANCE,AND SAVING A

BUSINESS SUNDAYHit by a global trainAn analysis of a half-century of datafor the nation’s largest cities showsthat no urban center fell as far, asfast, as hard as Milwaukee from theupheaval of a globalizing economy.Nor was any city’s black work forceless prepared for the shift fromunskilled labor.

Keith Bailey is the owner of Bailey’s Dry Cleaning &Laundry Service at 4700 N. Hopkins St. Legacy Bank lentBailey money to buy his dry cleaning shop when threeother banks, which noted his previous lack of businessexperience, turned him down. Born and raised inMilwaukee, Bailey saw an opportunity when the previousowner planned to close the business. He has doubled hisannual revenue in four years.

MONDAYA dream derailedThe Milwaukee Road literally encircledthe perimeter of Milwaukee’s blackcommunity, defining where they livedand worked. When it derailed, so didthe dreams of a whole community.But now, there are signs the urbancore is getting back on track.

Bailey (below) loads dry cleaning at his business.

TODAYEmerging marketsA new generation of leaders isadvancing market-driven 21st-centurysolutions for poor neighborhoods.Promise is seen in the city’s centrallocation, low transportation costs,cheap land and proximity touniversities and the ideas theyincubate.

ON JSONLINE.COMGo to www.jsonline.com/links/brown to read previous stories in theyearlong Journal Sentinel series, “StillSeparate and Unequal.”


PRESTIGE FOR THECENTRAL CITYJust as boardroom elite aspireto the Fortune 500,Milwaukee’s nascententrepreneurs strive for alisting in Inc. magazine’s“Inner City 100” — anannual ranking of high-growthcompanies based in distressedcentral cities. Started in 1999,the IC-100 carries prestige:Few firms can boast the red-hot growth rates that qualifyfor a listing.

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