Richard Longworth of the Chicago Council on Global Affairs, and author of the book Caught in the Middle: America’s Heartland in the Age of Globalism, just released this short video about the Midwest. If the video player doesn’t display for you, click over to watch on Youtube.
An excellent video. I loved his point about there are no longer “locomotives”. He uses this term to refer to cities, but he might also have applied it to industries, the old vertically-integrated manufacturers like GM, GE and US Steel that through plants out into the hinterland, leaving a legacy of people thinking “big”. One of the facts of the modern global supply is that small design and production firms can grow up, and that local communities need to suppor them.
So, Columbus, Indiana is the “New Midwest” not the “Old Midwest” reformed. It was never the Rust Belt and had limited connections to the Rust Belt when it WAS the “locomotive” of the region. It’s lack of connection to the Rust Belt was a liability in the past and is now an asset.
Longworth did not mention Columbus Indiana in the video.
But I can assure you that it was very much “Old Midwest” in the 50s, 60s, and 70s.
In my childhood, Arvin was primarily a Big 3 supplier. Cummins made big diesel engines for trucks and construction equipment. Another major employer made gears for electric motors that controlled industrial processes. Hamilton Cosco (predecessor to today’s Cosco brands) was primarily a metal stamping company turning out consumer products like ironing boards. Next door to Arvin corporate headquarters was a foundry.
Yes, it was Old Midwest in those days before globalization. But its leaders got out in front of globalization in the late 70s and early 80s as we discussed on another thread.
Longworth’s model is of “New Midwest” success and “Old Midwest” stagnation. I thought Columbus, Indiana was supposed to be a shining example of success the ‘Midwest.” Either Columbus is successful and thus the “New Midwest” or it’s not. Columbus didn’t grow into a large industrial system in the past because it wasn’t engaged in the economy of the “Old Midwest.” Columbus, IN “got out in front of globalization” because it didn’t have the social, political, or economic structures of the Rust Belt to deal with. It succeeded in globalization because it didn’t succeed in hitching its economy to the Rust Belt. I’d go even further to say that it rejected the Rust Belt model intentionally because it would have fundamentally conflicted with it’s alternative societal model. Columbus isn’t an exception to Longworth’s model.
It’s not binary, either/or. A city can be both historically “Rust Belt” and successful today. Because it’s not a common occurrence, it’s worth noting and understanding.
I’m not sure where you get your information. I’ve lived in Columbus or within an hour’s drive for decades, and I’m not the only member of my family to have worked there. Columbus most certainly had social, political, and economic structures of the Rust Belt.
For that matter, so did Chicago. And judging from a comment elsewhere on this post, so did Milwaukee. All three seem to have advanced past that legacy instead of getting stuck in it.
Tell that to Longworth. It’s his model.
No, it’s not Longworth. It’s the same erroneous argument you made on Aaron’s post concerning Columbus Indiana.
You really should try to engage Longworth, or anyone, on what’s really going on. You’ll eventually get board playing an unpaid booster for the place you happen to live.
I appreciate Richard Longworth’s writing (Caught in the Middle is one of the few books I’ve read cover to cover four times).
Regarding his 2nd point on globalization, at least in my corner of the Midwest (Milwaukee/SE Wisconsin) I would argue that there’s no place where leaders better appreciate globalization and understand their place in the global supply chain, than the old industrial centers. They’ve been on the front lines of globalization for the past four decades. The manufacturing companies that survived or thrived during this era (or which were launched during the past 40 years) are in most instances globalized in their manufacturing operations, supply chains, and distribution/sales. I would give Milwaukee the edge in being “plugged into the global economy” and having leaders who “understand globalization and where their cities fit into the global supply chain” over all of the new economic centers listed by Longworth in terms of being plugged into the global economy and having adapted successfully to globalization. And manufacturing is key to this global connectivity/awareness.
Regarding Longworth’s 4th point on industries producing new jobs and which cities have the edge, I’m not sure whether I’d give Columbus the edge over Cleveland in terms of energy, health, food, water, and IT jobs. The same is true for Milwaukee vs Madison. Madison probably has the edge in terms of health jobs (with Epic Systems and its 10,000 employees, Exact Sciences, and the UW-Madison medical related research centers), but Milwaukee has GE Medical Systems (6,000 employees), the Medical College of Wisconsin (5,300 employees), and five health care systems with a combined 60,000 employees. I’m inclined to give Milwaukee the edge in all four of the other major job categories cited by Longworth (energy, food, water, and IT). And the manufacturing companies are a significant source of these jobs, as well as leadership. The water initiative in Milwaukee was launched a decade or so ago with a goal of making Milwaukee a leader in water technology research and related jobs. These efforts generated a lot of favorable press, including by Longworth. But the key leaders for the initiative were the heads of three long-time Milwaukee-based manufacturing firms (A.O. Smith, established 1874; Rexnord, established 1891; and Badger Meter, established 1905). The old manufacturing economy has morphed into the new economy. The adaptation to globalization is being led by the manufacturing economy.
I hope you’re receiving some kind of compensation for your efforts here from the Madison and/or Milwaukee Chambers of Commerce.
Is he WRONG about anything here, Matt? I know you prefer economies based on the ephemera of “Web 2.0” or whatever the flavor of the month is, but….
I have no idea. What do you think?
I think he makes an impassioned case for how an “industrial” city can evolve. As I remain skeptical about superstar economies that seem based primarily on software and hubris, I found it interesting.
What do I know. I have not lived in the Midwest for thirty years. But I am still “from there”.
I’ve never been to the state of Wisconsin, but that doesn’t matter for understanding it’s economy. Capitalism is about the distribution of capital. The superstar cities are superstars because they have the most advantageous access to capital. Describing industrial innovation in Wisconsin may be interesting but it only matters to the extent that it improves Wisconsin’s access to capital. The City That Shall Not Be Named has plenty of hubris, for reasons I have never been able to understand, but it doesn’t have access to capital. Is Wisconsin seeing more investment? Are Property values increasing? Wages? Is there new public investment? Almost every place is trying to create “favorable press.” Real evidence of Wisconsin’s markets in property, labor, companies…that’s what would make it an example of new growth outside a superstar city that would be worth investigating.
I set up an archivist’s computer at the Global Water Center for the WI Historical Society several years ago and it seemed the future was bright for water research in Milwaukee. There was talk of partnering with UW-Madison and research institutions in Chicago but I don’t hear much about it.
Any idea how the water technology research sector is doing in Milwaukee?
Skip
But I think our correspondent was doing just that…discussing the growing strength in certain economic and industrial sectors.
It’s sad that we simplify the complex human interactions of large cities down to the spreadsheet diddling of Big Capital. If “access to capital” means a bifurcated society with spreading human misery (San Francisco), then maybe we need to question “Capitalism” a little more.
Matt – I don’t have a detailed understanding of Milwaukee-area or Wisconsin companies access to capital. But the access seems sufficient to enable the manufacturing companies to implement their growth plans. Ashley Furniture, based in a town of 3,000 in western Wisconsin has managed to remain private but grow from a $10M per year revenue company in 1982 to over $5B today and achieve a status of the largest furniture manufacturer in the world. Milwaukee Tool has grown from $500M to $5B revenue over the past 14 years under ownership of its Taiwan-based parent. I have no idea if its access to capital is through US sources or Asian markets. Generac and Rockwell have prospered since acquisition by private equity firms (so private equity does manage to find its way here). I should also note their are some local private equity firms that have invested in other local manufacturing firms that have prospered.
When my previous company was acquired, and the CEO of our new company ($4B in revenue) visited our office in Milwaukee, I was surprised when he mentioned that he came to Milwaukee several times per year, and that the purpose was to meet with representatives of various stock and investment funds based in Milwaukee. Maintaining our share price was a key to our companies growth by acquisition business model, and Milwaukee was a necessary stop.
I think that the capital markets in whatever form they exist are more robust than you would imagine. Money will always find a pathway to investment opportunities. A negative expression of this fact was the presence of >50 subprime mortgage lenders operating in one of Milwaukee’s most distressed neighborhoods (the 53206 zip code area)during the peak of mortgage fraud era.
Regarding economic measures, its a mixed bag. Milwaukee and all of the major rust belt cities don’t fit into simple narratives. The good is real as well as the bad. The presence of extreme challenges related to segregation and high poverty neighborhoods doesn’t lessen the revitalization accomplishments in Milwaukee, or mean that it doesn’t share some attributes of the superstar cities, or have leaders that are plugged into the global economy. Having a near zero population growth rate doesn’t mean it’s stagnant (relative for example, to Fresno, which has seen its population grow from 130,000 in 1960 to 530,000 today, while Milwaukee’s population has declined from 740,000 to 592,000).
I appreciate that Longworth is trying to advance the Midwest cities narrative, to one that is a little more positive (in which only half the Midwest is now placed in the failing category). But unfortunately, this narrative is still deeply flawed in terms of the old manufacturing centers (at least in the case of Milwaukee). The old manufacturing economy can transform into the new economy, as well as serve as an exceptional platform for global connectivity.
Thanks for some interesting snapshots of happenings in Milwaukee. These links below could help to inform our discussion of Milwaukee and other metros.
https://www.brookings.edu/research/metro-monitor-2019-inclusion-remains-elusive-amid-widespread-metro-growth-and-rising-prosperity/
bls.gov/regions/midwest/summary/blssummary_milwaukee.pdf
https://www.jsonline.com/story/money/2019/11/12/october-sales-of-existing-homes-jumped-7-9-in-metro-milwaukee/2579219001/
It’s very possible for 2 cities to have the same new economy job growth and have very different trajectories. If a small non-industrial city grows jobs, it’s a success. If a larger industrial city grows the same proportion of new economy jobs but loses lots of manufacturing jobs, then its seen as a failure. In this way I think cities like Milwaukee can he both successful in tying into globalization but lose more jobs than it gains from it at the same time. Manufacturing was a high employment industry before automation and globalization hit.