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New Report Shows Growing Income Inequality in Wisconsin

Aug. 22, 2017
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Everyone in Wisconsin deserves the opportunity to succeed if they work hard. But when nearly all the income gains go to a select few, too many Wisconsin families are deprived of their shot at achieving their full economic potential. 

A new report by the Wisconsin Budget Project and COWS (a UW-Madison-based national think tank concerned with finding solutions to various social problems in the state) describes the extent to which nearly all the income gains in recent years have been concentrated at the very top, making it difficult for most Wisconsin families to advance economically, no matter how hard they work. Some of the findings: 

  • In 2014, $1 out of every $6 of income in Wisconsin wound up in the pockets of the top 1% of earners. The top 1% of earners had income of $335,000 or higher in 2014. The top .01% in Wisconsin (one out of every 10,000) had incomes of at least $6.5 million. The share of income going to the top 1% in Wisconsin has more than doubled since the 1970s.
  • Between 1979 and 2014, the average income of the top 1% in Wisconsin grew by more than 130%, while the average income of the remaining 99% grew by only 9%

The report outlines a number of strategies for mitigating the effects of growing income inequality. These include:

  • Raising the minimum wage to give a boost to the lowest-paid workers and strengthen labor standards.
  • Building the skills and education of Wisconsin’s workforce by investing in technical colleges and improving the connections between training and employment. 
  • Supporting working families through paid family leave and sick time, which will help more Wisconsin residents succeed in the workforce—as will a strong child care system and improved tax credits for working families.
  • Making state taxes more equal across income groups. People with high incomes should pay at least as much in taxes relative to income, as people with lower incomes do.

When the tide is rising in Wisconsin, we need to make sure it is lifting all the boats. But right now, the economic gains that have occurred in the period of recovery after the recession have largely been funneled into the pockets of our highest earners.

Between 2009 and 2014, the incomes of the top 1% rose by 17%, while the incomes of everyone else rose just 9% on average, and when we look at income growth in Wisconsin over the last 45 years, we find that nearly three-fifths of the total has been claimed by the top 1%.

If Wisconsin wants to get serious about tackling income inequality and the drag it puts on our economy, there are a number of steps policymakers can take immediately, including giving a raise to the lowest-paid workers by raising the minimum wage and building the skills and education of the Wisconsin workforce. While there is no magic bullet to rectify this growth in inequality, acting sooner rather than later will move us closer to economic security for every family in Wisconsin. 

For more information on how growing income inequality is hurting Wisconsin and what policymakers can do to reverse that trend, read the report, Pulling Apart 2017: Focus on Wisconsin’s 1%, which can be found at wisconsinbudgetproject.org.

Tamarine Cornelius is a research analyst at the Wisconsin Budget Project—an initiative of Kids Forward that is engaged in analysis and education on state budget and tax issues, particularly those relating to low- and moderate-income families.

Issue of the Week presents the Shepherd Express’ opinion on an important issue in the news. It is usually written by the Shepherd’s editor, but at times we invite someone outside of the paper who is either working in the field or has some other level of expertise.

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