Study: Family income up, but inequality grows

Michael Jacob

Did the long economic expansion pay off here in the Badger State? A new study, The State of Working Wisconsin 2002, offers some good long-term news for working families in the state: Median wages are finally exceeding their 1979 levels and family income is up.

But the positive trends may be substantially eroded by the current economic downturn, says the Center on Wisconsin Strategy annual report. And key challenges remain, especially in terms of economic inequality and job quality in the state.

“Many Wisconsinites simply missed the prosperity of the last decade. Others saw some of it, but only at the expense of their family life. And inequality is rising, which isn’t good for the state,” says Joel Rogers, director of COWS and co-author of the report.

Median family income is up, but so are hours devoted to work. The median family income in Wisconsin grew to $66,146 in 2000; but the typical married couple with children in Wisconsin now devotes 3,981 hours to work each year, the equivalent of 1.91 full time jobs.

Workers also spend 386 hours on average, nearly 10 weeks a year, just commuting to work. This puts the average work time effort at over 4,300 hours annually.

Other findings:

• The median wage for full-time workers, who are more likely to be household or family “breadwinners,” grew just 1.6 percent (22 cents) from 1979 to $13.87 in 2001. Wisconsin’s full-time workers now earn three cents less per hour than the median U.S. wage for full-time workers; this is a sharp decline from 1979 when full-time Wisconsin workers held a 73-cent wage advantage.

• Wages have declined substantially from 1979 values for black Wisconsinites. The wage trend for African-Americans here compares poorly to both wage trends for whites in the state and to national trends for blacks.

Despite a strong economy in the 1990s, income inequality grew in Wisconsin.

“The most important economic development issue in Wisconsin is the quality of the jobs we create. Too many of our jobs are dead-ends, with bad wages and no way out,” says Laura Dresser, COWS research director and co-author of the report. “High quality jobs are good for workers, employers, and the entire economy of the state.”

Dresser and Rogers offered a series of policy recommendations geared toward “building a high road economy.” They say the state should raise the minimum wage, restore the right to organize, broaden high road partnerships, insist on development accountability, organize the state development effort, encourage regional development, expand ownership, and discourage sprawl.