The Economist

22 United States The EconomistJuly 21 st 2018

A

S HE gesticulates on the rooftop terrace

of the new Kimpton Hotel Dennis

Klein a retired property developer is visi-

bly proud. One of his sons developed the

hotel in Milwaukee’s third ward a project

that attracted scepticism from local gran-

dees who doubted anyone wanted it. An-

otherson developedsomeofthebuildings

that are visible below. The third ward was

once a dreary part of town filled with

warehouses. In 1984 it had only 28 resi-

dents says Mr Klein. Today it has bou-

tiques cafés bars and many thousands of

oat milk-drinkinghipsters.

TheMidwest is notmonolithicbut rath-

er a tale of at least two rustbelts says John

Austin ofthe Michigan Economic Centre a

think-tank. Bigger old industrial cities such

as Minneapolis which used to live off

flour-milling Pittsburgh which made steel

for the whole country and Indianapolis

once home to dozens of carmakers have

turned a corner. Not long ago Milwaukee

was in decline like many old industrial cit-

ies in the rustbelt. Some of these cities are

now thriving; others are sinking.

Wisconsin’s biggest city was prosper-

ous before thanks to German brewers

such as Schlitz Pabst and Miller a thriving

tannery industry and a bustling port on

theshores ofLakeMichigan. Nearlyhalf of

its workforce was employed in manufac-

turing in the couple of decades after 1945.

As African-Americans fled the South to

work in its factories Milwaukee became

deeply segregated. This pattern has en-

dured: Milwaukee came top of a recent

ranking of America’s most segregated cit-

ies. Unskilledworkers werehithardwhen

under pressure from globalisation and

automation employers downsized

moved or simplyshut down.

Over the past five years however

around 2  500 hotel rooms have been add-

ed to its downtown. Northwestern Mutual

Life Insurance spent an estimated $ 450 m

to build the Tower and Commons 32 - sto-

rey skyscraper which was completed last

year and provides office space for 2  400

employees. The state of Wisconsin and the

owners of the Milwaukee Bucks the local

basketball team forked out $ 250 m each for

a sockingnewarena that will open soon. It

is hard to find plumbers or carpenters in

the area as they are in such high demand.

About $ 5 bn has been invested in down-

town propertyin thepast 15 years says Tim

Sheehy of the Metro Milwaukee Associa-

tion ofCommerce.

Milwaukee makes small engines water

heaters fan blades for jet engines and gen-

erators. The share of the workforce em-

ployed in manufacturing ( 14 %) is the sec-

ond-highest of any American city

according to Milwaukee’s business lobby.

But there is plenty more going on too.

NorthwesternMutual alifeinsurer Kohl’s

a chainofdepartment stores Manpower a

staffing firm and Harley Davidson picked

Milwaukeefor theirheadquarters. Thecity

has majestic architecture leafy parks a

fine site at the confluence of three rivers on

the shores ofLake Michigan and craft beer-

fuelled summer festivals. It recently man-

aged to bag America’s largest-ever foreign

investment. Incentivised by $ 3 bn in tax

breaks and subsidies from the state Tai-

wan’s Foxconn the world’s biggest con-

tract manufacturer promised to create up

to 13  000 jobs with a $ 10 bn investment in

Racine one ofMilwaukee’s suburbs.

Midwestworld

While many of the Midwest’s bigger cities

are thriving tier-two cities are finding life

much harder. Gary Indiana and Flint

Michiganaretwoextremeexamples offor-

mer company towns that have not yet re-

covered from the loss of their anchor em-

ployer. Alan Berube and Cecile Murray of

Brookings a think-tank have looked at 185

counties with a population of 50  000 or

more where manufacturing once account-

edforafifthofjobs.Ofthe 63 suchplaces in

the Midwest more than half have seen net

job outflows since 1970. Mr Berube is pessi-

mistic about the fortunes of smaller cities.

Unless they have a close connection to a

bigger metropolis are home to a first-class

university or manage to find a niche he

says they will struggle.

College towns such as Ann Arbor in

Michigan home ofthe University of Mich-

igan; Champaign-Urbana which has the

University of Illinois; Iowa City (Universi-

ty of Iowa) and West Lafayette (Purdue

University) are flourishing. Add in the big-

ger cities—Chicago is home to two of the

world’s leading universities (the Universi-

ty of Chicago and Northwestern) while

Pittsburgh has the University of Pittsburgh

and Carnegie Mellon—and the Midwest

has 20 ofthe world’s top 200 universities.

Not every town can have a prestigious

university though. Some such as Kalama-

zoo Michigan (population 75  000 ) and

Warsaw Indiana (population 15  000 ) have

managed well without. Kalamazoo suf-

fered a painful blow when Pfizer and Up-

john two pharma giants closed their fac-

tories but it managed to keep some of the

talented scientists and help them to start

new biotech firms. To the envy of other cit-

ies it is offering all graduates of its high

schools the “Kalamazoo Promise” a free

college education. This is possible only

thanks to a fabulously munificent philan-

thropist but it has played a big part in re-

versing the city’s exodus of people. War-

saw found its niche as the nation’s chief

maker of prosthetic limbs. Jasper (popula-

tion 15  000 ) in Indiana a city proud of its

Germanic roots in Pfaffenweiler in the

foothills of the Black Forest is doing well

with advanced manufacturingindustries.

As the successful parts pull away from

the rest the Midwest will become a little

less midwestern. The region has long been

more equal than the rest of the country:

that is likely to change. It is often said to be

either in decline or to be experiencing a re-

naissance. In fact the Midwest is doing

both at the same time. 7

The Midwest

Nice change

MILWAUKEE WISCONSIN

Contraryto received wisdom much of theMidwest is flourishing

The sun rises in the west