Center for American Progress

RELEASE: Not Like the Others: New CAP Analysis Examines the Midwestern Labor Market
Press Release

RELEASE: Not Like the Others: New CAP Analysis Examines the Midwestern Labor Market

Washington, D.C. — Since the 2016 election, political scientists, economists, and pundits alike have been consumed with studying the characteristics of the Midwest, and in particular, the supposed economic anxiety affecting the region and its political leanings. A new analysis and interactive from the Center for American Progress take a deep dive into the economic problems that do and do not affect the Midwest, finding that the region does not have a jobs problem any more than the country as a whole does, but it does have a good jobs problem: Employment has not fallen particularly fast, but it is the region that has experienced the most wage stagnation.

“Policymakers seeking to strengthen the Midwestern labor market need to focus on the region’s main problem: wages,” said Brendan V. Duke, CAP’s Associate Director for Economic Policy. “Unlike the rest of the country, it wasn’t the Great Recession but rather the disappearance of high-paying manufacturing jobs between 2000 and 2007 that has been the biggest challenge for Midwestern workers. The Midwest does not just need millions more jobs—it needs millions more good jobs that pay a decent wage.”

CAP’s analysis examines the prime-age employment rate, or PER, since 2000 across the United States’ four regions—Northeast, South, Midwest, and West. The results show, surprisingly, that the PER has performed better in the Midwest than in the country as a whole, falling 3.3 percentage points since 2000 compared with the 3.6 percentage point national decline. However, the job market has been lousy in the Midwest for much longer than it has in other regions: Unlike the rest of the country crippled by the Great Recession, the bulk of the recent decline in employment in the Midwest occurred from 2000 to 2007. Further, Midwestern workers have experienced the worst wage growth of any region in the country since 2000, seeing real median wages grow a mere 2 percent compared with an 8 percent national increase. The accompanying interactive examines state and regional changes in wages and employment since 2000.

These findings indicate structural changes unique to the Midwest in the past few decades; CAP’s analysis suggests that the most important recent economic crisis in the Midwest was not the Great Recession in 2008 but rather the disappearance of millions of manufacturing jobs—which, on average, used to pay 15 percent more than service jobs—that began during the 2001 recession. The combination of fewer manufacturing jobs and the decline of this manufacturing wage premium has helped drive Midwestern wages toward stagnation. CAP’s analysis suggests that policymakers seeking to improve the economic fortunes of Midwestern workers cannot focus simply on creating jobs but instead need to focus on creating good jobs that pay a decent wage.

Click here to read “The Midwestern Great Recession of 2001 and the Destruction of Good Jobs” by Brendan V. Duke and Andrew Schwartz.

Click here to view the interactive “The Midwestern Recession” by  Brendan V. Duke, Andrew Schwartz, and Mathew Brady.

For more information or to speak with an expert, contact Allison Preiss at or 202.478.6331.