Annual UW-Madison study shows how poverty fell in Wisconsin in 2015 as the economy improved

May 23rd 2017 | Deborah Johnson
Research, Social Sciences
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Researchers studying the economic and policy forces that affect Wisconsin poverty released their latest results, which show that Wisconsin gained 70,000 jobs, leading to a modest, but statistically significant reduction in poverty as measured by the Wisconsin Poverty Measure (WPM).

The WPM also counts benefits from the Supplemental Nutrition Assistance Program or SNAP (called FoodShare in Wisconsin) and refundable tax credits, as well as accounting for work expenses and health care costs.

The more comprehensive measure of resources and needs shows statewide poverty overall dropped from 10.8 percent in 2014 to 9.7 percent in 2015, marking the lowest rate recorded since the WPM was introduced nine years ago. The job gain occurred between January 2014 and November 2015.

In more good news, study researchers at the Institute for Research on Poverty (IRP) at the University of Wisconsin-Madison found the WPM child poverty rate also reached an all-time low, 10.0 percent, which is more than 5 percentage points below the official poverty measure's rate for Wisconsin children of 15.4 percent.

Researchers attribute these declines to improvements in earnings as most Wisconsin regional labor markets finally began recovering from the Great Recession. The economic effects of the recovery are reflected in the market income poverty measure, which counts only resources from private earnings and investment income. This poverty rate by itself fell by 1.5 percentage points from the previous year.

Other bright spots include a drop in elderly poverty from 8.3 percent to 7.8 percent, according to the WPM.

Meanwhile, safety net benefits, especially SNAP/FoodShare and refundable tax credits such as the Earned Income Tax Credit, played an important role in poverty reduction. However, national and state changes to SNAP reduced these positive effects in 2015 as compared to previous years. In addition, rising childcare costs and other work-related expenses also led to decreased resources for Wisconsin families with children.

Milwaukee County (16.3 percent WPM poverty rate) and La Crosse County (13.0 percent) were the only places with rates significantly higher than the state average of 9.7 percent. Meanwhile, six areas have rates that are significantly lower than the statewide rate, including the counties of Washington/Ozaukee (4.5 percent) and Waukesha (4.7 percent); and Outagamie (Appleton), Dodge and Jefferson, Sheboygan, and Brown counties (Green Bay), which were all at or below 7.1 percent.

Poverty rates in subcounty regions show variations that are more dramatic within counties than across the larger county and multicounty areas in the state, as depicted in the map. Within Milwaukee County, for example, overall poverty rates ranged from about 10.0 percent in southern and western subcounty areas to 37.0 percent in the central city of Milwaukee.

At the same time, counties to the north and west of Milwaukee had below average WPM rates. This pattern suggests a steady, but uneven recovery of jobs and incomes across regions within the state, and the continued serious high-poverty pocket in central Milwaukee, especially as compared to the region surrounding it.

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 ninth annual Wisconsin Poverty Report. Support for the study from the Wisconsin Community Action Program Association (WISCAP) and IRP is gratefully acknowledged.

IRP Director Lawrence Berger notes, "I am pleased and proud that IRP researchers are serving the state in the spirit of the Wisconsin Idea by providing a more meaningful assessment of poverty in state and local areas than would otherwise be available from national statistics. The WPM reflects the Badger State's labor market and safety net, revealing programs and policies that make work worthwhile and protect our society's most vulnerable members."

Read the full report: Wisconsin Poverty Report 2017

Read the summary: Wisconsin Poverty Report 2017 Summary