Annual study shows Wisconsin poverty rose in fragile economic recovery

Researchers studying the economic and policy forces that affect Wisconsin poverty have released their latest results, which show that although the state economy is creating jobs, the poverty rate rose from 10.2 to 10.9 percent in 2013 using the researchers’ expanded measure.

Many of the new jobs created in Wisconsin are in the service sector, where wages are lower, and many families are also affected by the loss of the federal payroll tax holiday and higher out-of-pocket work and medical expenses.

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; Julia Isaacs, a senior fellow at the Urban Institute and affiliated scholar at the university’s Institute for Research on Poverty (IRP); and Katherine Thornton, an IRP programmer analyst. Support for the study came from the Wisconsin Community Action Program Association (WISCAP).

The Wisconsin Poverty Measure (WPM) was developed in order to provide policy and practice professionals with a more accurate accounting of economic status that includes findings for children and the elderly and at the county level for most of the state. Child poverty statewide is lower using the WPM (12 percent) than the Census Bureau’s official measure (19 percent); for the elderly, it is a percentage point higher than the 9 percent found in the national study.

Poverty varied across and in some cases within counties, sometimes dramatically. For example, the Milwaukee County poverty rate was 18.2 percent, but within the county, poverty rates varied from 8 percent in the south to 30 percent in the central area of the city of Milwaukee. The range in child poverty in Milwaukee is even more dramatic, with 6.5 percent child poverty in the south and 38.5 percent poverty in the north part of the city.

La Crosse County at 17.6 percent poor was the other area with a poverty rate significantly higher than the state rate of 10.9 percent. Dane County at 11.2 percent was also higher than the state rate.

These statewide, age group, and county-level findings reveal a timelier, more accurate and place-specific accounting of poverty rates in Wisconsin than the official federal poverty measure.

The WPM differs from the federal poverty measure in significant ways that lead to the difference in poverty rates. The WPM has more expansive definitions of economic need, resources and family units than does the federal measure.

The study found the state FoodShare program reduced child poverty in the state in 2013 by 4 percentage points. Researchers also found that out-of-pocket medical expenses — which are not accounted for in the federal measure — increased elder poverty by 3.6 percentage points.

The end result, the report finds, is this improved measure is evidence of the effectiveness of safety net programs like food assistance in reducing child poverty.

The authors will be presenting a webinar on their findings from 2 to 3 p.m. on Monday, April 27. Register here.

Read the full report here.

— Deborah Johnson