Four mayors, one squeeze: Leaders face the challenge of a K-shaped economy

Wisconsin cities are confronting the demands of a K-shaped economy in which some households climb economically while others slide as they face an affordability crunch.

“The problem of a K-shaped economy is not about the line sloping up or the line sloping down,” said Superior Mayor Jim Paine. “It’s about what’s missing from the space in between. To me, that’s the gutting of the middle class and an abandonment of small, locally owned businesses.”

Paine was one of four mayors who detailed their challenges as they wrestle with a changing economy during panel discussions at the Wisconsin Economic Summit in Eau Claire this month. The four communities represented on the panel ranged from Milwaukee (population 600,000) to Dodgeville (population 5,100).

Although their scale differed, their problems overlapped: housing, workforce, and a state revenue system they say leaves them little room to maneuver.

Madison Mayor Satya Rhodes-Conway used a single statistic to summarize the economy faced by Wisconsin residents: more than 30% of Wisconsinites, she said, are asset-limited and income-constrained.

“A third of our state in is this category,” she said. “It looks like homelessness, increasing instability in housing, and wages not keeping up with costs.”...

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Leo's notes: Economic development cannot stop at attracting employers and creating jobs; if communities cannot house the workforce those investments depend on, housing becomes the constraint on economic growth rather than a benefit of it.