A recent study by the Center on Wisconsin Strategy, a UW-Madison group that advocates policies supporting jobs and families, shows the income gap between rich and poor has grown over the last two decades. The study shows a growing income inequality among Wisconsin residents, though the state still ranks in the nation’s top 10 for income equality.
The report shows the average real income for the poorest fifth of Madison residents increased by 3 percent from the late 1970s to the late 1990s. The average income for the richest fifth increased by 38 percent. The poorest fifth of residents make an average of $17,388, and the top fifth make $141,858.
Although the numbers have been adjusted for inflation, the study does not account for the recession beginning last year.
“Wisconsin could lose its standing as one of the most economically equal states in the nation,” according to the report, which noted that Wisconsin is still in the nation’s top 10 states in income equality. “Despite our strong economic growth and tight labor markets in the late 1990s, income disparity is greater than it was two decades ago.”
The study suggested the economic downturn would increase the gap between the rich and the poor because most layoffs occur at the bottom end of the labor market.
Nationally, the income for the poorest fifth of families grew by 7 percent from late 1970s to the late 1990s. The national income for the richest fifth grew by 44 percent. These numbers were adjusted for inflation.
In the last 20 years, only nine states have had a more equal distribution of income than Wisconsin, according to the report.
The group advocates making several changes to repair the increasing inequity in incomes. Suggestions include raising the minimum wage, improving the access to education for low-wage parents, and extending unemployment benefits to part-time employees.
According to the report, “Wisconsin has traditionally prided itself on its relatively high level of equality, and it still can. Even with this growth in inequality, only nine states have more equal distribution of income.”