Milwaukee's brand-inner city evictions

A few weeks ago the Milwaukee Common Council voted to establish a committee to assess public perceptions of Milwaukee and develop a brand to promote the metropolitan area.

The task force better get to work before our well-earned reputation as a city that's tough on poor folks generates any more publicity.

Today's New York Times has a feature article and the accompanying photo on evictions in Milwaukee.

It reports:

On Milwaukee’s impoverished North Side, the mover’s name (Eagle) is nearly as familiar as McDonald’s, because Eagle often accompanies sheriffs on evictions. They haul tenants’ belongings into storage or, as Ms. Smith preferred, leave them outside for tenants to truck away.

Here and in swaths of many cities, evictions from rental properties are so common that they are part of the texture of life. New research is showing that eviction is a particular burden on low-income black women, often single mothers, who have an easier time renting apartments than their male counterparts, but are vulnerable to losing them because their wages or public benefits have not kept up with the cost of housing.

And evictions, in turn, can easily throw families into cascades of turmoil and debt.

Just a few years ago we were told that w-2 would help break the cycle of poverty and enable poor parents to become self-sufficient.

The promises are long forgotten. Many of the politicians who made them have retired or returned to lucrative private life. But the havoc they wrought remains.

Is Milwaukee developer buying opposition to local hiring and fair wages?

Word out of City Hall is that Richard Lincoln, VP of the Mandel Group, a wealthy and politically connected Milwaukee development firm, has been making the rounds lobbying against the proposed MORE Ordinance that would require hiring and contracting standards for development projects that receive $1 million or more in city financial assistance.

The idea that the citizens of Milwaukee have the right to expect that taxpayer subsidized projects employ local residents and meet certain wage standards is know as “community benefits.”

It’s not too hard to see why the Mandel Group is working so hard against community benefits (they have 5 lobbyists registered to work on it).

Mandel has received millions of dollars in public aid for several projects, from Library Hill a decade ago to the North End project currently under construction, and they want to keep it that way. Of course they don't want to come out and admit how profitable it been to be drinking from the public trough. So they are circulating a short paper by Mark Eppli, chair of the Real Estate Department at Marquette University, in their effort to discredit prevailing wage standard requirement legislation.

Eppli’s “paper” is a selective and superficial look at a handful of construction projects that doesn’t meet the rigor of an introductory economics course. The assertions that prevailing wage standards for construction workers contribute to unreasonably high project costs and exclude minority workers are not drawn from the data in the work that Eppli cites.

Beyond the bad science, there is at least the appearance that Eppli’s “paper” is research for hire.

Eppli runs Marquette’s ACRE program designed to attract more minorities into the real estate profession. The Mandel Group is the primary financial sponsor of the ACRE program. City leaders should be asking is this research for hire, with a foregone conclusion designed to satisfy a major funder?

The major source of the data that Eppli uses in his paper is Cross Management Services. Cross Management is a firm that monitors Disadvantaged Business Enterprise contracting requirements on construction projects that is frequently retained by the Mandel Group. Cross Management has a direct financial interest in providing data that supports Mandel’s opposition to community standards legislation. You simply don’t bite the hand that feeds you.

Common Council members should reject this “research” for the propaganda it is.

Whether it is federal stimulus funding or City of Milwaukee TIF money, taxpayers and city leaders have a right to expect that taxpayer supported projects hire local residents, build real career pathways, pay prevailing wages and contribute to long-lasting economic development outcomes for workers and the entire community.

For decades the city has subsidized private developments assuming that the benefits would trickle down to employees and Milwaukee's neighborhoods. Milwaukee's nationally high poverty rates (7th) and the alarming rate of African American male unemployment (46%) demonstrate the failure of this approach.

Big developers have had their way with TIF for the past decades. It's time for them to accept hiring and wage standards as part of any taxpayer supported deal. Otherwise they’re free to forgo the public money. If Mandel Group really wants to aid minority workers in the City, then pay them the prevailing wage for construction employment!

The standards contained in the MORE Ordinance are a step in this direction.

Heinemann's not a victim of paid sick leave law

Last week Heinemann's abruptly closed its last three restaurants due to declining sales, increased competition and the deepening recession. With no advanced warning 115 people lost their jobs.

Co-owner Peggy Burns also blamed Milwaukee's new paid sick day ordinance.

But wait a minute.

Milwaukee's new ordinance doesn't go into effect until February 10, 2009.

And two of the three shuttered stores and their employees would not have been covered by the law since they were located outside the city in Fox Point and Brookfield.

Earlier, the company closed stores in Greendale, Whitefish Bay, Grafton and Wauwatosa. None of these stores were effected by the sick pay ordinance either.

So what gives?

Apparently opponents of providing employees with paid time off when they or a family member are ill are so angry about the law that they feel justified in lying about its impact.

Next we'll be told that Milwaukee's high poverty and black unemployment rates are caused by the sick leave ordinance. Or that Tower Automotive shut down because of the onerous regulation.

As layoffs and business closings increase in the coming months, we will continue to hear opponents of paid sick days blame it for all of Milwaukee's economic woes. Don't believe the hype.

MMAC's lawsuit will not create family supporting jobs or shared properity

In November Milwaukee voters overwhelmingly passed an ordinance that guarantees workers the right to earn paid sick days. Milwaukee joined San Francisco and Washington DC as the third city to require these benefits. The referendum passed by a margin of almost 70% to 30%.

Despite the overwhelming margin of victory, the Milwaukee Metropolitan Chamber of Commerce (MMAC) has aggressively opposed the measure.

Two weeks ago the organization filed a lawsuit against the city seeking to strike down the law. The MMAC is also asking for a temporary injunction to block the city from enforcing the legislation that is scheduled to go into effect on February 10, 2009.

The MMAC's opposition, while short-sighted, is not unexpected. Business organizations have consistently opposed social legislation like laws outlawing child labor and discrimination or regulating business behavior like the Clean Air Act. For the past three decades they have aggressively opposed any effort to raise the minimum wage even as its real real value has fallen to historic lows. Their consistent opposition makes some sense since such legislature imposes costs or at least prevents businesses from externalizing their costs, thus reducing rates of profit. The long-term benefits of increased employee loyalty and productivity and reduced hiring and retraining costs are seldom acknowledged.

But Tim Sheehy and other MMAC spokesman have stooped to new a new low in their desperate attempt to discredit Milwaukee's new ordinance.

The MMAC's Steve Bass, a former Republican assembly operative , labeled the new law "a sort of terrorism."

It is perverse to equate providing employees with time off when they or a child is ill with suicide bombings. The former provides workers with a humane benefit so that they no longer need to choose between their job and caring for their family, while the latter uses murder to terrorize the general population. Additionally, Bass's rhetoric belittles the lives and sacrifice of the victims of terrorist attacks and those who have died trying to bring the perpetrators of political violence to justice.

Not to be outdone, the MMAC's President Tim Sheehy claims the ordinance is affecting job growth in Milwaukee and predicts "dire economic consequences."

But Milwaukee's labor market had collapsed and the city's workers were experiencing what the UWM Center for Economic Development has characterized as "a stealth depression" long before this ordinance was passed.

Exactly what job growth is Mr. Sheehy claiming the City has lost?

The country is experiencing the worst recession since the Great Depression. We lost half a million jobs last month and 2 million in the last year. Business investment has collapsed, a victim of the housing bubble's collapse and the resulting financial sector's meltdown.

Last year, Wisconsin lost 32,4000 jobs. The Department of Revenue is projecting that Wisconsin will lose another 37,700 manufacturing jobs (7.7% of the state's total) and 121,000 construction jobs( 5% of all construction jobs) next year.

Milwaukee is hemorrhaging jobs. Two thousand two-hundred and sixty-six (2,266) more Milwaukeans were unemployed in September 2008 than a year ago, long before the sick day ordinance was passed. Milwaukee ranks a dismal 34th among 50 cities in the annual rate of employment growth, has the 2nd worst rate of black male unemployment and the worst black-white unemployment ratio in the nation.

The simple fact is that long before the sick day referendum passed, business investment in new plant and equipment had collapsed and companies were laying off workers at an alarming rate. In addition, many of the firms like Crazy Water, Outpost Natural Foods, and Lackey and Joys, whose spokesmen have opposed the ordinance, won't abandon their Milwaukee location in response to a marginal cost increase because they require access to the city's market. As realtors always tell us: "location, location, location!"

Mr. Sheehy's concern over Milwaukee job loss is also hard to take seriously since the MMAC has consistently promoted policies that have destroy local jobs and drive down wages.

The MMAC was a vocal proponent of NAFTA and other free trade agreements that have contributed to a reduction of employment in high-wage traded-goods industries, growing wage inequality, and a steady decline in demand for workers without a college education.

NAFTA alone cost Wisconsin 25,403 (-0.9%) jobs between 1994 and 2006.

The MMAC has also aggressively promoted trade with China. The organization's China Business Council has even sponsored tours of China. Yet, between 2001 and 2006 Wisconsin lost 38,000 jobs because of the growing trade deficit with China.

And Mr. Sheehy actively opposed the County's advisory sales tax referendum aimed at providing a dedicated source of revenue to the County's beleaguered transit system. Sheehy actually authored a letter to Milwaukee's County Board members urging them to uphold County Executive Walker's veto of the referendum.

Mr. Sheehy surely knows that one of the major impediments to economic development in Southeastern Wisconsin is the spacial mismatch between large numbers of unemployed workers, disproportionately African-American, living in Milwaukee's central city, and employers located in suburban and ex-urban locations who have had difficulty finding qualified workers. Key to addressing this problem is a mass transit system that links people to jobs. Yet Sheehy and the MMAC opposed the County's advisory referendum designed to address this mismatch. Republican partisan politics trumped investing in the regional economy. The economic consequences of the MCTS's deterioration is nothing short of "dire."

The "stealth depression" in the city of Milwaukee's labor market calls for bold, new departures in public policy. Yet the MMAC has opposed initiatives in public investment, regional cooperation, reducing metro-wide racial segregation, industrial policy, and community benefits agreements that should be part of an aggressive anti-unemployment strategy in the city.

The MMAC's use of scare tactics to oppose the sick pay legislation is consistent with this dismal record. Rather than waste the city's scarce tax dollars in a lengthy court case, the MMAC and the firms it represents should obey the law. They might just discover that when businesses treat their workers humanely, their employees will be more loyal and productive and replacement and training costs will decline.

Taxes play no role in MillerCoors decision to locate HQ in high cost Chicago

MillerCoors LLC has picked downtown Chicago, despite its higher costs and high corporate tax rates, as the location for its new corporate headquarters.

Metropolitan Milwaukee, already reeling from the loss of 1200 family supporting jobs at Delphi and Midwest's plans to eliminate another 1200 positions, will lose between 150 and 175 jobs as a result of this decision.

In explaining the decision, MillerCoors President Tom Long explained that Chicago was a more attractive location than either Milwaukee or Denver for the marketing talent that MillerCoors needs to be successful. He also sighted the importance of O'Hare International Airport, the world's second busiest airport which offers global air connections. Long said taxes were not a factor in MillerCoors decision!

The WMC and other free market extremists like Scott Walker who have reduced economic development strategy to a one note song of cutting taxes should take note. Access to skilled employees and a world class transportation infrastructure trumped lower cost real estate and taxes. Competitive advantage requires investing in the labor force and in the parks, amenities and communications and transportation systems that make an urban area attractive and functional.

As former Republican Secretary of Commerce and Alcoa CEO, Paul O'Neil told Congress when asked about the role tax cuts play in attracting investment:". ‘As a businessman I never made an investment decision based on the tax code. If you give money away I will take it, but good business people don’t do things because of inducements.”

Regional Cooperation, Lake Michigan and the Great Lakes Basin

The enthusiastic embrace of regional cooperation by Southeastern Wisconsin's business and political elites has been as surprising as it was abrupt. Various explanations have been offered to explain this radical departure from generations of suburban/urban competition.

Now we know it was in the water!

To be precise it is the radium in Waukesha's water. Radium is carcinogenic so New Berlin and much of Waukesha want to get their hands on Lake Michigan's clean water.

If anyone doubted this, New Berlin Mayor Jack Chiovater's response to a recent Department of Natural Resource (DNR) ruling that New Berlin can begin negotiating with Milwaukee over access to Lake Michigan Water should erase all doubts. In reaction to the DNR's letter the Mayor said: "We applaud the DNR's decision today and look forward to working in the spirit of regional cooperation with Milwaukee."

The DNR letter came only a week after the Journal Sentinel editorial board had urged the department to support the New Berlin’s request to divert Lake Michigan water outside the Great Lakes Basin to meet its water needs.

Jim Rowen who has posted a wonderful series of articles on his blog about the Great Lakes, which constitute one sixth of the world’s fresh water supply, points out that this is not the DNR’s decision to make. Milwaukee cannot send water west of the subcontinental divide under current federal policy.

Before any Lake Michigan water is diverted the Wisconsin legislature needs to approve legislation supporting the Great Lakes Compact, an agreement between the eight Great Lakes states and two Canadian provinces, which clarifies the criteria for diverting water outside the basin. Among the proposed criteria is that communities requesting diversion must demonstrate that they are maximizing water conservation efforts and that they will return the water to the lake watershed.

The DNR letter doesn't change this reality.

The Compact's conservation standards present a problem for New Berlin since the city's Board of Appeals voted 4 to 1 to uphold a Plan Commission's approval of a new $55 million, 7 story, 405 room hotel and water park!

That’s right. I am not kidding you- a community that lacks an adequate supply of clean water recently approved a commercial development anchored by a water park.

Milwaukee’s west side alderman, Michael Murphy, recognized the absurdity of New Berlin's action saying: ”This project is exactly what we don’t need - Lake Michigan water diverted for-commercial entertainment usage that will add to sprawl that has gone unchecked in Waukesha County for years.”

Similar questions should be raised about the Pabst Farms 184 acre upscale regional shopping mall which includes 2 hotels and other housing and commercial developments in western Waukesha and Kenosha County.

Before we back the trucks up to Lake Michigan and begin hauling water out of the Great Lakes Basin we also need to ask who will pay for the infrastructure to send water to New Berlin and other water hungry communities, treat it and return it to the Lake. Currently, Milwaukee's water pipes are undersized and it lacks sufficient pumps to handle the additional demand.

The Journal treats this as a minor annoyance when it writes: "New Berlin is willing to help pay the capital costs....”

help pay???

If New Berlin is only helping, who are they helping cover the costs estimated at between $4 and $8 million?

Does the Journal expect the residents of Milwaukee to subsidize New Berlin's diversion of Lake Michigan water?

For decades the same leaders who have now drunk the regional cooperation Kool Aid rejected Milwaukee's requests to work together to address problems like high poverty rates, racial segregation, inadequate school funding, deindustrialization, the shortage of low and moderate income housing and the need for a modern, comprehensive mass transit system.

As development moved west, critics of sprawl were told that developers were simply responding to the housing preferences of homeowners who preferred a suburban lifestyle. People were voting with their dollars and the market was responding. When Milwaukee asked for help, suburban leaders response was "tough luck." Milwaukee's problems were the city's alone.

The real costs of Southeastern Wisconsin's suburban development were obscured during its early stages. Taxes were initially much much lower because new suburban developments require less infrastructure and social service investment than a mature, urban area like Milwaukee. Property values are also much higher. Sometimes, as in the case of the $20 million interchange needed for the Pabst Farms regional mall, developers ignored or hid the costs until after their project was approved.

But once a critical mass of population, housing and commercial development occurs, infrastructure costs including new roads, new schools and access to clean drinking water, as well as the need for expanded services such as police and fire protection, emerge.

Now that the real costs of sprawl are coming home to roost in the form of radium in Waukesha's water, is the plan, in the words of former Governor Thompson, "to stick it to Milwaukee" one more time?

Milwaukee borders one of the world's most valuable water resources. Our elected officials and citizenry must be responsible stewards of this resource. The first step is getting the legislature to sign the Great Lakes Compact. New Berlin's water park can wait!

Privatization Fails Milwaukee's Children

On May 1st, nineteen month old Alicia Burgess was suffocated to death in her home in Milwaukee. Child welfare workers had been alerted to serious abuse and neglect problems but failed to act.

Alicia’s tragic and avoidable death comes less than six months after a seven month old baby was starved to death in her Milwaukee home. The state-run Bureau of Child Welfare had been warned of concerns about this child’s health as well.

The Milwaukee Journal Sentinel is right when it declares that “This lethal incompetence must end.” But another study by the Legislative Audit Bureau, the only action the Journal’s editorial board suggests, is not a solution to this deadly and unacceptable state of affairs.

How many more innocent children will die before this community acknowledges that its experiment in privatizing the child welfare system has failed?

For decades Milwaukee County ran the community’s child welfare system. Highly educated and experienced social workers collaborated with other public agencies including Children’s Court, the public schools and the Milwaukee Police Department to protect abused and neglected children.

But the County, under financial pressure from unfunded state mandates, declining state revenues, and competing demands for scarce dollars failed to maintain its investment in protecting abused and neglected children.

By the 1990’s Milwaukee’s Child Welfare system had the highest caseload ratios (over 100 to 1) in the nation.

Case workers had so many families assigned to them that it was impossible to engage in the intensive social work required to save children and restore families. A lawsuit was filed against the County and the State on behalf of Milwaukee’s abused and neglected children.

Rather than address the dysfunctional, under-funded system by hiring more professional social workers and adequately investing in needed programs, state and local officials led by Senator Alberta Darling scapegoated the experienced, highly educated and unionized social workers and proposed privatizing the system. But public control and professional social workers were never the cause of Milwaukee County’s Child Welfare System’s problems.

In response to the lawsuit, the state established the State Bureau of Child Welfare which is more bureaucratic and costly than the system it replaced. Highly educated social workers with years of experience were replaced with young, less educated, inexperienced personnel. The result has been a system plagued by record high turnover rates even as caseloads have been reduced. Quality was sacrificed on the alter of low cost! And we outsourced foster care and safety services. These are the bitter fruits of privatization.

The idea that private agencies whose commitment is to profit, not care, should be responsible for our most vulnerable children has always been misguided. Privatization promises to address social needs on the cheap. But in this world you get what you pay for. Unfortunately, in Milwaukee County it’s our children who are paying the most for this misguided social experiment.

The Journal Sentinel editorial board recognized these problems in March 2005 when it argued that the County should resume control of Milwaukee’s child welfare system to ensure the children’s safety and restore public accountability. How many more children will die before we heed this advice?