The Politico - February 18, 2008

 

 

The Midwest's beacon of hope
 

 

 

ational politicians, and their accompanying media, often seem to view the middle part of the country as a unique landscape of national failure.

This may explain, for example, why Sen. Hillary Rodham Clinton has chosen to refocus her efforts in Wisconsin on what the New York Sun recently described as “the state’s economically stressed blue-collar workers.” Similarly, Sen. Barack Obama has tried on more populist, anti-corporate garb in his recent visit to hard-pressed Janesville.

Yet, ironically, this gambit may well miss the great complexities of states like Wisconsin. Rather than a monolith, the nation’s midsection — arguably the decisive region in both the Democratic primary and the general election — is made up of numerous regional and state sub-economies and cultures that do not always conform to the East Coast media’s stereotypes.

Nowhere is this reality more manifest than in Wisconsin. Although the state certainly has its pockets of blue-collar distress, our analysis at Praxis Strategy Group shows that, overall, the state has done far better than its Midwestern counterparts — such as Michigan, Illinois and Ohio — in virtually every measurement, from job creation to net migration. In addition, due to its stronger economy, the state is also expected to remain relatively unscathed by the mortgage crisis devastating some of its neighbors.

In this sense, then, Wisconsin represents not the failed past of the Midwest but the direction of its future. Always a center for progressive ideas in economics, over the last decade the state has experienced a remarkable transformation that separates it from failed one-industry states such as Michigan or the older industrial belt of northern Ohio. This is certainly a core message pushed by James Doyle, the state’s progressive Democratic governor and key Obama booster.

Doyle’s backers point out that even though Wisconsin is about as dependent on manufacturing as its neighbors, the nature of its industrial base is quite different. For one thing, with the notable exception of places like Janesville, site of a major General Motors plant, the Badger State has been far less susceptible to the current turmoil in auto-related mass manufacturing.

Instead, Wisconsin has emerged as a major center for the precise kind of industry that is flourishing, such as medical equipment, electronics and specialized machine tools. These industries reflect one of the most unappreciated sectors of America’s economy, the advanced manufacturing sector. Since the 1980s, these industries — and the skilled workers who key their growth — have weathered the competitive storms even as lower-wage and rote manufacturing employment have ebbed, boosting overall employment by 37 percent.

Wisconsin’s diversified, highly skilled manufacturers have been leaders in this promising development. In fact, Wisconsin’s advanced manufacturing sector has grown handsomely over the past three years, even as it has shrunk in places like Michigan, Ohio and even Illinois.

This shift has been closely tied to the surge in exports, which are increasingly a source of strength for the battered U.S. economy. In fact, Wisconsin’s exports — mostly industrial goods and paper — have been growing at twice the national rate. Capital goods exports have benefited in large part from markets in developing countries such as China and Mexico, as well as in Japan and Canada.

Such growth also has implications beyond the state’s industrial sector. As a 2006 Chicago Federal Reserve Bank study demonstrates, high-end manufacturing jobs also tend to spawn higher-end business service jobs. This fits the pattern seen in Wisconsin, which has enjoyed nearly 80 percent growth since 1990 — performance almost twice as good as that in Ohio and Michigan, as well as New York.

Overall, for the past two decades, Wisconsin has been a pretty good job producer, performing at close to the national average, while most other industrial states have lagged far behind. Certain regions have been particularly prolific. A critical leader has been the state capital, Madison, but many smaller cities like Wausau, Eau Claire and, particularly, Green Bay have also registered strong growth.

These economic trends have produced markedly different demographics in Wisconsin than those seen in its neighbors. Unlike many Great Lakes states, for example, the state’s population growth has not stagnated; since 1990, the state has been growing nearly three times as rapidly as Ohio and almost twice as fast as Michigan. The demographic pattern within the state parallels the job numbers, with the strongest growth in Milwaukee’s suburbs as well as in Madison, Appleton, Green Bay and Eau Claire.

The state’s economic success has also helped Wisconsin, since 2004, attract younger, educated workers — particularly between the ages of 26 and 40 — which is itself a rare phenomenon in the industrial Midwest. The snowbound state may not be gaining younger and middle-aged educated workers at the rate of the Sunbelt giants North Carolina, Texas or Arizona, but its emerging demography skews younger than that of many of its immediate neighbors.

How will these economic and demographic trends affect Tuesday’s primary? Wisconsin’s appeal to educated workers and its relatively successful, diversified economy should make the state a good market for Obama. He has flourished electorally in places — such as Washington state, Virginia and Maryland — with relatively strong economies and large concentrations of younger and middle-aged educated workers.

Yet at the same time, the persistence of a strong blue-collar economy also suggests there may be a large set of working-class voters susceptible to Clinton’s recent neopopulist message, particularly in Racine, Waukesha and Janesville, where she campaigned last week. It might also work in at least the non-African-American working-class parts of Milwaukee, which has experienced a precipitous decline in its manufacturing economy.

But both campaigns may find that “worker as victim” oratory does not prove as appealing in Wisconsin as it did in Michigan or as it could end up being in much harder-pressed Ohio or Pennsylvania.

Optimism may not be breaking out all over the Badger State, but a better economy may make a more congenial place for the kind of less angry, aspirational message that has been the staple of the Obama campaign, at least until now.

Perhaps the more interesting sign will emerge in the November general election. Both Sen. John McCain and his still-to-be-determined Democratic opponent need to understand that each Midwestern state possesses often diverse economic and demographic characteristics. In November, the candidate who plays best in Wisconsin may not necessarily be the one who buys into the conventional wisdom of a dying Midwest. Instead, the winner could be the candidate who sells himself or herself as most capable of boosting the success of an already highly adaptive state.

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