160                  WISCONSIN BLUE BOOK 1987-1988
    skilled labor, crop diversity and the existence of a major educational
institu-
    tion in the form of the University of Wisconsin, where research led to
im-
    proved management and significant productivity gains. In addition, federal
    farm policies provided protection that enabled the state's farmers to
avoid
    some of the harsher effects of capricious markets.
    To some (though a lesser) degree, Wisconsin's manufacturing industries
    developed as a result of natural factors. Farm implement manufacturers
    were drawn to their major markets in the Midwest. Good ports and the
    Great Lakes provided cheap and natural transportation for both raw materi-
    als and finished goods.
    The leather industry flourished partly because of the proximity of such
nec-
    essary raw materials as oak and hemlock bark. And the state's large paper
    industry was also dependent on the region's forests.
    Indirectly, state manufacturers also thrived by supplying other industries
  that were located in the Great Lakes region because of natural factors.
Ex-
  amples are the automotive industry, which, directly and indirectly, continues
  to provide high-quality employment for thousands of Wisconsinites, and
the
  iron and steel sector, with its allied nonelectrical machinery industries.
    The state was also fortunate in receiving a steady inflow of the skilled
  workers required by such industries as machine tool and electrical equipment
  manufacturing. The skilled labor force helped turn the Milwaukee area into
  "the machine shop of the world" and continues to be one of Wisconsin's
  major economic assets.
    Of course luck - a factor that policymakers like to avoid discussing
  also played a part in the state's rise to manufacturing eminence. The great
  Chicago fire, for example, provided a boost for one of the state's most
famous
  industry: brewing. This sector initially developed in Wisconsin, however,
be-
  cause of water, plenty of natural ice and skilled labor in the form of
master
  brewers from Europe.
  For all those reasons, among others, manufacturing grew to become Wis-
  consin's number one industry. It continues to hold that position, now em-
  ploying about 30 percent of state workers. What is equally important, how-
  ever, is that manufacturing has long been one of the key sources of
  Wisconsin's prosperity; manufacturing jobs have traditionally been jobs
that
  pay well above average. For decades the good pay for manufacturing work-
  ers helped provide the income that flowed to other sectors of the economy,
  supporting, for example, healthy retail trade and other service sectors.
The
  recent decline in the number of those "high-quality" jobs in
manufacturing is
one of the most important changes in Wisconsin's economic health, and an
economic revival will depend to a large degree on their replacement by jobs
of
equal quality.
  As the manufacturing sector has suffered through a period of stagnancy
or
decline, most of the job growth has come in the services sector. Indeed,
wholesale and retail trades now account for about 29 percent of the state's
workers, threatening manufacturing's hold on first place.