Wisconsin is doing a good job of providing a safety net for the state’s most vulnerable people, according to the fourth annual Wisconsin Poverty Report released this week.
The study, conducted by UW-Madison’s Institute for Research on Poverty, is designed to measure poverty rates more accurately than the official federal numbers that are compiled using only pretax cash income figures. In addition to these cash resources, the institute’s Wisconsin Poverty Measure also takes into account the effects of government safety net initiatives such as tax credits (including the state and federal earned income tax credit), food stamps, BadgerCare and subsidized child care.
In 2010, the most recent year for which figures are available, Wisconsin’s official overall poverty rate as measured at the federal level was at 13 percent, while the Institute for Research on Poverty (IRP) pinned that figure at 10.3 percent. And the gap is even wider when looking at children -- with official numbers indicating an 18.6 percent child poverty rate in the state compared to a Wisconsin Poverty Measure of 10.8 percent.
“There’s no doubt we’d all like to see more people working and less dependent on government to help them not be poor,” says Tim Smeeding, the lead investigator for the study and the director of the Institute for Research on Poverty. “And if the economy recovers and employment picks up, that is what we’ll see. But for now we’re doing a real good job of holding the line at the bottom end and Wisconsinites should be very proud about these results. These programs work. Government works.”
When asked what he hopes state policymakers take from his report, Smeeding says, “Just keep things going like they are.” (This report is based on data prior to a new state initiative this year to monitor tax filings for abuses of the earning income tax credit.)
While many might view a report that government safety nets are doing their job of protecting people from poverty during tough times in a positive light, Smeeding says he’s used to taking plenty of flak from those on both ends of the political spectrum.
He notes some on the right who are generally opposed to helping the disadvantaged “think they have it all figured out and that helping the poor is some communist conspiracy or something.”
“The programs really help those who are otherwise helpless,” he says. “We’re feeding people, for Christ’s sake. And these people are spending the money they receive at your local farmers' market and your local grocery store. And yet some want to kill these programs.”
Across the political aisle, he notes “people on the left who are saying, ‘What the hell are you doing? This says we’re doing a good job fighting poverty. But we need to do more.’ You can’t win in this business.”
Smeeding says Wisconsin is a great state for such a case study due to its tradition of experimenting with policies related to poverty, and UW-Madison’s tradition of finding ways to help the people of the state.
Although this state generally does a good job helping children, the Wisconsin Poverty Measure indicates that 9.8 percent of the state’s elderly live in poverty, which is higher than the 7.6 percent U.S. Census figure. That higher mark is due largely to out-of-pocket medical costs, researchers indicate.
Nonetheless, the Wisconsin Poverty Measure indicates state poverty overall dropped between 2009 and 2010, from 11.1 percent to 10.3 percent. The WPM figures also show that Dane County’s poverty rate dropped from 13.5 percent in 2009 to 11.9 percent in 2010 -- which means Dane County’s rate is no longer significantly different from the state average, the report states.
Although the poor were generally helped by state and federal safety nets, the sluggish economy has continued to hit the middle class hard, the report notes.
“Our key finding -- that the safety net provided a buffer against increased poverty during the recession -- is not to ignore the negative effects of the recession on the lower middle class, such as declining home values, increased debt levels and flat or falling incomes that are pinched by rising expenses,” the report states.
“We believe that the long-term solution to poverty is a secure job that pays well, not an indefinite income support program. But as this report shows, in times of need, a safety net that enhances low earnings for families with children, puts food on the table, and encourages self-reliance -- as Wisconsin’s safety net does -– makes a big difference in combating market-driven poverty.” (In March, the Cap Times’ Paul Fanlund spoke with Smeeding at length regarding his concerns about the employment prospects for Wisconsin’s 20-somethings who have limited education and little training.)
“What we really want to see is poverty go down in Wisconsin because income-based poverty goes down,” Smeeding says. “In other words, we need to create more jobs so people are out there earning enough so they don’t need government help. That’s what everybody wants to see. But until then, Wisconsin is doing a good job of providing that safety net. That’s something we should be happy about.”