Robert M. La Follette School of Public Affairs
Tuesday, June 28, 2016

Annual study shows Wisconsin poverty remained flat despite new jobs

Annual study shows Wisconsin poverty remained flat despite new jobs

Researchers studying the economic and policy forces that affect Wisconsin poverty released their latest results, which show that although employment rose by almost 60,000 jobs in the state, there was no reduction in poverty. Instead, poverty remained unchanged from 2013 to 2014 at 10.8 percent.

This lack of decline in poverty, researchers found, is due in part to the fact that most of the new jobs were low wage or part time jobs, and in part due to decreases in the effects of antipoverty policies such as food assistance and refundable tax credits as well as increases in medical expenses and work-related costs.

Using the Wisconsin Poverty Measure (WPM), which includes tax credits and benefits like food assistance, the state's poverty rate is still about 1.3 percentage points below the official poverty measure, suggesting that the FoodShare (SNAP) program and refundable tax credits like the Earned Income Tax Credit still have a large positive effect on poverty reduction in Wisconsin.

There were some bright spots in the report. For example, elderly poverty fell from 9.0 percent to 6.8 percent. And more families with children earned their way out of poverty. While the overall WPM child poverty rate remained flat at 11.8 percent, this rate is still far below the official child poverty rate, which was 17.6 percent in 2014, reflecting the strong positive effects of the FoodShare (SNAP) program and refundable tax credits on families with children who otherwise cannot earn enough to escape poverty.

Another significant finding was that the overall statewide poverty rate hides substantial variation in poverty across regions, as shown in the map, suggesting an uneven pattern of recovery of jobs and incomes. Within Milwaukee County, for example, overall poverty rates ranged from 8.0% in one southern subcounty area to 33.5% in the central city of Milwaukee.

Four counties had poverty rates higher than the statewide average of 10.8 percent: Dane County (13.5 percent), Walworth County (16.6 percent), Kenosha County (16.7 percent), and Milwaukee County (17.3 percent).

Meanwhile, eight areas have rates that are significantly lower than the statewide rate, including the counties of Washington/Ozaukee, Fond du Lac/Calumet, St. Croix/Dunn, Marathon and Sheboygan, all below 6 percent; Waukesha at 6.4 percent, and with several others in northeastern Wisconsin below 8 percent.

The analysis that led to these results was developed by Timothy Smeeding, an economist at the University of Wisconsin–Madison La Follette School of Public Affairs; and Katherine Thornton, an Institute for Research on Poverty (IRP) programmer analyst, and outlined in their eighth annual report. Support for the study from the Wisconsin Community Action Program Association is gratefully acknowledged.

IRP Director Lawrence Berger notes, "As appreciation grows for the importance of timelier, more accurate information about poverty in state and local areas than national statistics can provide, more researchers are replicating the Wisconsin Poverty Measure model that was devised by researchers at the Institute for Research on Poverty. I am proud that IRP is continuing its 50-year tradition of upholding the Wisconsin Idea on behalf of society's most vulnerable members."

-Adapted from news release by Deborah Johnson, IRP.