Friday, September 22, 2017

Low income growth and increasing inequality. Welcome to today's Wisconsin!

Last week, the Census Bureau gave their annual release on health insurance, poverty, and income in America, as well as the comparisons across states for each of these stats. I mentioned Wisconsin’s standing on health insurance in this post, where I noted other Midwestern states have made better progress than we have in the Age of the ACA.

But I wanted to point out the income side of the equation here. Nationwide, real median household income went up by 2.4% in 2016, and was at $57,617 for the year. Wisconsin's median household income was slightl below that at $56,811. This places Wisconsin behind Minnesota and Illinois, in line with Iowa, and a few thousand above Indiana, Michigan and Ohio.

But if you dig deeper into the Census Bureau’s summary of income-related items in the American Community Survey (ACS), you’ll see that Wisconsin lagged well behind the rest of the country when it came to growing that income in 2016. For example, while Wisconsin joined most of America in having income growth above the rate of inflation in 2016, Wisconsin’s increase was only good for 39th out of the 50 states, and was dead last in the Midwest.

Real median household income 2015 vs 2016
Ind. +2.8%
Minn +2.2%
Iowa +1.9%
Mich +1.8%
Ill. +1.44%
Ohio +1.40%
Wis. +1.2%

After the Census Bureau information came out, Governing Magazine created a good interactive display for all of the states and their changes in income over the last year. They also take a look at how inequality has changed in the various states over the last decade. Measured by a stat called the Gini Index, this figure has increased by 3.9% nationwide since 2006. But in Wisconsin, the changes in inequality have become even more pronounced.

Biggest Gini inequality changes, 2006-2016
Montana +9.6%
Rhode Island +8.1%
Vermont +8.1%
Idaho +6.9%
Wis. 6.1%

This looks even worse when you realize Wisconsin’s population is at least twice the size of any of those other 4 states, which lessens the effects of boom towns or plant shutdowns or other outliers.

And this trend of increased inequality picked up even more in Wisconsin last year, leading to this dubious distinction that was part of the Census Bureau’s writeup.
The Gini index for the 2016 ACS increased in Louisiana, West Virginia, and Wisconsin. Massachusetts, Alaska, and Puerto Rico showed a decrease in the Gini index. The remaining 45 states and the District of Columbia showed no statistically significant changes between the 2015 ACS and the 2016 ACS.
That’s a STATISTICAL increase outside of the margin of error, and I don’t know about you, but I don’t want Wisconsin to be economically mentioned with West Virginia and Louisiana in anything.

So how are we dealing with this situation in the latest Wisconsin budget? By giving more to the rich and corporate while everyday people make less and pay more! This includes the rempeal of the state’s Alternative Minimum Tax (overwhelmingly paid by those making over $200K), a $74 million cut in property taxes paid by businesses (paid for by your tax dollars), the continued devaluing of the Homestead Credit for low-income Wisconsinites, and the removal of prevailing wage requirements on construction projects.

These things aren’t disconnected from each other, and they aren’t happening in a vacuum, people. And it won’t stop until you remove the politicians that made this increasingly unequal and stagnant Wisconsin economy happen.

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