Poverty in Wisconsin

by Phil Anderson

Wisconsin’s growing economy and low unemployment rates are having little impact on reducing poverty in the state. The rising tide is not lifting all boats. Many people are treading water rather than benefiting from a recovering economy. The recently passed Republican state budget will make it even harder for many people to keep their  financial heads above water. 

Wisconsin’s poverty rate in 2017 was about the same as it was in 2010. This is the conclusion  of a recent report from the University of Wisconsin’s Institute For Research on Poverty (IRP). The report points out that gains in earnings and increased employment have been offset by higher childcare, healthcare, and housing costs. For low income families the result is that they are not benefiting from the improving economy. The struggle to make ends meet continues especially for single parent families and people of color. 

Statistics on poverty in Wisconsin vary with the source and their specific perspective on the topic. The Institute For Research on Poverty says in 2017 child poverty rates fell from 12% to 10%. Kids Forward (a anti-poverty advocacy group) says children are more likely to be in poverty than the rest of the population. They say in 2016, 15.7 % of children (198,000) lived in poverty. By comparison 11.8% (662,000) of adults were in poverty. The National Center for Children in Poverty says the problem is greater. They say 17% (214,641) of Wisconsin children live in poor families. Of parents who do not have a high school degree, 54% of their children are in poverty. Minorities have much higher rates of poverty than whites. Poverty rates also varies across the state. The IRP report lists Milwaukee County as the highest with 17% while the Milwaukee suburbs have only 3.6% in poverty. Eau Claire County is second with with 14%. However you spin the numbers, too many people and children are not doing well in Wisconsin. 

Why do we have so many people in poverty? The Center for Wisconsin Strategies (COWS) identifies the cause as low wage employment. In their 2018 report, “The State of Working Wisconsin,” they say Wisconsin has fewer professional, scientific, and technical jobs than other states. The decline in manufacturing jobs (and union jobs) is also a factor. But the major cause is low wages. COWS research shows that one in five workers in Wisconsin have poverty level jobs with few, if any, benefits. This means over 675,000 employees are making below $11.95 per hour. By contrast a living wage (adequate to support a person or a family) needs to be two to three times this amount depending on the family size and number of income earners in the household. 

Over the last 40 years, the overall economy has expanded and corporate profits have risen, but real wages have remained flat for workers without a college education. Since 1973, American productivity has increased by 77 percent, while hourly pay has grown by only12 percent. If the federal minimum wage tracked productivity, it would be more than $20 an hour, not today’s poverty wage of $7.25. Nationally about 40% of the working population makes $12 an hour or less.

Historically senior citizens (over 65) have been the most financially secure segment of the population. Much of this well being was the result of the success of Social Security and Medicare. But again not all boats are being raised. The IRP report says in 2017 the poverty rate for elderly people increased from 9% to 9.5%. Inflation, especially increases in medical costs, were responsible. The current Republican refusal to accept federal money for Medicare expansion will only exacerbate this problem. 

In our economy having a job and being willing to work do not mean financial success. Work by itself is not the solution to poverty. There are also about half the working population that are above the poverty line but living pay check to paycheck. Having jobs does not prevent the decline of the middle class. We as a society have to recognize that low wages, and the high cost of medical care, childcare, transportation, education and housing must be addressed. We have to recognize that racism, sexism, and discrimination are real everyday problems for many people. Life is harder and more complicated than the “free market” fairy tales conservatives want us to believe. 

But the typical Republican response to any problem is either to ignore it, deny it is real, or not care because it does not affect them or their campaign contributors. Their standard response to issues of poverty is to blame the victim. Republicans believe (without evidence or justification) that the poor are poor because of their laziness and moral failings. They are in poverty because they don’t work hard enough. Social programs to help the poor only create “dependency” and stifle initiative. They refuse to understand that many structural features of our economy and society are the problem.

This is not just about helping the less fortunate in our society. It is about making everyone’s life better. Universal, affordable healthcare, low cost transportation, affordable child care, and decent affordable housing are all essential to the well being of all of us. What is good for all of us is also good for business. There is a connection between ShopKo, a Wisconsin company, going broke and the economic problems of the people of Wisconsin. There is a connection between a lack of economic well being for the people of Superior and  the closing of K-Mart and Target. What goes around comes around. We are only as strong as our weakest link.

Solutions to poverty are possible. We know what we needs to done. We just don’t have the political will, or sufficient citizen outrage, to make it happen.