Study: In 2016, Wisconsin's job market improved but the state's poverty rate increased

Despite a robust job market, Wisconsin's poverty rate increased to 10.8% in 2016, compared to 9.7% in 2015, according to a report released Friday by researchers at the University of Wisconsin-Madison.

The 10th Wisconsin Poverty Report details what is called the Wisconsin Poverty Measure that is produced by the Institute for Research on Poverty.

The report was authored by Timothy Smeeding and Katherine Thornton.

A tale of two measures

Unlike the federal government's official poverty measure — which is based on pretax cash income — the WPM accounts for such things as noncash government benefits and refundable tax credits.

"This year, we learn that the state's economic expansion is leaving some low-income families behind, which is concerning," said Lawrence Berger, director of the Institute for Poverty. "At the same time, the much lower WPM child poverty rate compared to the official rate emphasizes the important ongoing role of social welfare programs, indicating that tax credits and FoodShare are proving crucial resources for families who would otherwise be poor."

The official poverty rate in the state was 11.8% in 2016, according to the U.S. Census Bureau's American Community Survey.

Good news, bad news

Under the Wisconsin Poverty Measure, 26 of the state's 72 counties had poverty rates below the 10.8% state average, while Milwaukee County's rate was 17.5%.

Under the measure, child poverty increased by 2 percentage points to 12%, which was far below the official rate of 16.9%.

Elderly poverty rose from 7.8% in 2015 to 9.0% in 2016 under the measure, which was above the official rate of 6.6%. The Wisconsin Poverty Measure is higher because it includes out-of-pocket medical costs.

The report noted that "while benefits from the safety net played a large role in poverty reduction, changes" in the state's FoodShare program "reduced these positive effects in 2016 compared to other years."

Rising expenses

"Other trends that decreased resources over the past two years include rising childcare and other work-related expenses for families with children, and increasing medical-out-of-pocket expenses, especially for the elderly," the report said.

"Because we believe that the long-term solution to poverty for the able-bodied, non-elderly is a secure job that pays well, not an indefinite income support program, these findings are discouraging," the report said.