An improving economy means everyone is becoming better off, right?
Well, no, not in Wisconsin. An analysis of census data by the University of Wisconsin Applied Population Laboratory discovered poverty rates has grown since 2009.
The study showed Wisconsin’s poverty rate climbed from 11 percent in 2009 to 13 percent in 2014, Wisconsin’s highest rate since 1984. Furthermore, 31 Wisconsin counties, including Dane County, experienced significant increases in their poverty rate while not a single county had significant decreases.
Basic economic intuition and an understanding of the market economy concludes when more people are working, they should be able to collectively demand a higher wage. This is simple supply and demand.
But in Wisconsin, the unemployment rate as of December 2015 is more than 4 percent, compared to 9 percent unemployment in December 2009. Counterintuitively, the average household income, according to 2014 statistics, was $52,622, down 1 percent from 2009.
Offering a possible explanation to these discrepancies, Malia Jones, who is involved in the Applied Research Laboratory, in an interview with The Cap Times said, “We have seen that after a recession, those who are well-positioned to benefit from recovery benefit. And those who don’t have any cash can’t … take advantage of new opportunities.”
This is exactly what’s occurred in Wisconsin. Since most people have not been able to fully take part in the economic recovery, it’s time for Gov. Scott Walker and the Legislature to ensure this happens. Two actions can be adopted right now to cut down on the poverty rate.
First, do not limit food stamps. While continuously on the chopping block because of irrational fears of fraud, food stamp limitations especially harms children. Of all the people receiving food stamps, 45 percent of them are children. Considering that in 2012, 18.3 percent of Wisconsin children under age 18 lived in poverty, expanding and making food stamps easier to access should be a top priority to help create better living conditions for children.
Thousands of former food stamp recipients no longer eligible for program, turn to food pantries
Secondly, accept the Medicaid expansion offered under Obamacare. Wisconsin is one of 17 states that, for no good reason, has not taken these funds. The Medicaid expansion provides insurance for all adults that make up to 138 percent of the poverty level and also provides a substantial insurance break for uninsured adults and children that make between 100 and 400 percent of the poverty level. Health care is a big expenditure for the average American, and it has been proved that expanding Medicaid reduces financial stress.
Ultimately, these two solutions do not fix the causes of poverty, but they do help keep people from falling into poverty. But it is extremely important to keep people out of poverty in the first place.
Poverty is expensive. It costs the American economy more than $500 billion annually, and economic progress hinges upon a strong middle class. Providing the safety nets of food stamps and Medicaid allow for individuals to spend money on non-essentials. Buying random things is what drives the American economy.
Poverty has a societal impact as well. Richard Wilkinson, author of “The Spirit Level: Why Greater Equality Makes Societies Stronger,” identifies heightened inequality and poverty leads to high infant mortality rates, low life expectancy and high incarceration rates.
The U.S. is one of the worst at all of these societal problems when compared to other developed nations, and Wisconsin is near the national average in all of these indicators.
It’s up to all of us to lower poverty in Wisconsin. The problems of poverty are not only isolated to those low-income people; they affect us all. The sooner the Legislature realizes this, the better. Then a more vibrant, dynamic Wisconsin economy can be forged.
Aaron Reilly ([email protected]) is a freshman majoring in comparative literature and Russian.
