- Timothy M. Smeeding, Julia B. Isaacs, and Katherine A. Thornton
- June 2013
- Link to WI-PovertyReport2013 (PDF)
On June 18, 2013, IRP released the fifth annual Wisconsin Poverty Report, which reveals mixed news. On the up side, the social safety net is still working in Wisconsin (but not quite as well as it worked in 2010). Tax-related provisions and near-cash benefits provided a buffer against poverty for many working families in 2011, a finding from the Wisconsin Poverty Measure, which was developed by IRP researchers.
On the down side, more Wisconsin children were poor in 2011, due to parents’ declined earned incomes and reductions in the safety net. The Wisconsin child poverty rate rose from 10.8 percent in 2010 to 12.2 percent in 2011, a significant increase.
The official measure considers only pre-tax cash income as a resource, failing to capture the effects of government efforts to stimulate the economy and ease economic adversity caused by the recession through temporary increases in safety net programs and other policies.
The WPM, which was developed by IRP social scientists in conjunction with IRP data programmer analysts, uses state and local administrative data to paint a more locally meaningful picture of poverty and to provide policymakers with a yardstick for progress or regress in the effort to protect Wisconsin families from economic downturns. In determining poverty status, the WPM considers cash resources, but also tax credits and noncash benefits, and costs such as child care and health care that reduce available resources.
Largely owing to the recession and to our weak economic recovery through the end of 2011, the poverty rate based on earnings alone rose from 21.3 to 25.2 percent from 2008 to 2011. Hence the labor market had not recovered enough to begin to bring the poverty rate down in our state.
Using the WPM, researchers found that although the safety net’s impact lessened in 2011 due to policy changes at the state and federal levels and the still weak economy, state poverty rates were nonetheless lower than those reported by the U.S. Census Bureau in the official poverty statistics, rising by only 0.4 percentage points from 2010 to 2011.