Bruce Murphy
Murphy’s Law

The Problem of Poverty

Poverty is rising faster in Wisconsin and the city of Milwaukee than nationally.

By - Sep 26th, 2013 12:28 pm
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Last week the Census Bureau released new data on household incomes in the United States and the news was not good. It was even worse for Wisconsin and the city of Milwaukee.

Incomes were actually rising a bit in the U.S. from 2000 to 2007, but the impact of the Great Recession has been so devastating that average household incomes across America have declined significantly, dropping (in real, inflation-controlled dollars) from an average of $55,030 in 2000 to $51,371 in 2012 — a decline of 6.6 percent.

Two states saw big increases during this time: North Dakota and Wyoming, boosted by all that fracking, saw average household incomes grow by 17 percent and 6.9 percent respectively, while the District of Columbia, boosted by all that government, enjoyed a 23.3 percent increase. Meanwhile, lots of states saw declines, and two of the worst hit were Michigan (down 19.1 percent) and Indiana (down 13.2 percent). Both are big states for manufacturing, which continues to decline.

Seen in that context, the decline in Wisconsin, second only to Indiana in the percent of workers engaged in manufacturing, seems not that bad: Wisconsin’s average household income dropped from $56,269 to $51,059 from 2000 to 2012, a 9.3% drop, considerably worse than the 6.6 percent decline nationally.

Accompanying the drop in average household income was a rise in poverty. Nationally the percentage of people in poverty rose 3.7%, from 12.2% to 15.9%. Wisconsin saw poverty rise slightly faster, jumping from 8.9% to 13.2%, up by 4.3%.

As for Milwaukee, the news looked even worse. A different part of the census report shows that 29.9% of the city of Milwaukee’s people now live in poverty, giving this city the ninth-highest level of poverty in 2012, an analysis by the Milwaukee Journal found. In the same story, Mayor Tom Barrett said his administration is trying to fight the problem “on multiple fronts.”

As bad as all this sounds, it actually represents slight progress since 2010, when Milwaukee ranked fourth highest in poverty among big cities.

The census report offered no long-term data on urban poverty, but the UW-Milwaukee Employment & Training Institute tracks this, and reports that back in 2000 the census data showed that 21.3 percent of the city’s population lived in poverty. So that has risen to 29.9 percent, an alarming hike.

Why such a spike? The combined onslaught of the Great Recession and the continuing decline in manufacturing have had a huge impact. A recent study by the Brookings Institution found that “the population in extreme-poverty neighborhoods—where at least 40 percent of individuals live below the poverty line,” rose by one-third from 2000 to 2005–09 nationally but nearly doubled in Midwestern metro areas from 2000 to 2005–09. The Midwest, once the stable backbone of the American economy, has really been fractured by these negative trends.

As I’ve previously reported, almost all of the income gains since the economic meltdown have gone to the top 1 percent, while the rest of Americans “have hardly started to recover.”

As for Milwaukee, it has become a tale of two cities, with alarmingly high poverty in many neighborhoods, even as others are going through a boom in urban redevelopment. It also remains a welcoming place for low-income people while nearby suburbs resist affordable housing and enforce laws (on minimum lot sizes, etc.) intended to keep out the poor. As a result, the census data showed, 71 percent of poor people in the metro area live in the city of Milwaukee. Compared to the nearly 30 percent of people below the poverty line in the city, only about 6 percent of people in Waukesha, Washington and Ozaukee counties live in poverty.

The Impact of Women Wage Earners

The Wisconsin Taxpayers Alliance also came out with a recent report showing how the state trails the nation in per capita income. “Wisconsin has been below average in this area for over 40 years,” Wistax notes. “In 2000, it was within 3.9% of the national norm but dropped to 6.8% below by 2008. With economic recovery, the gap closed to 4.5% in 2010, but Wisconsin fell back to 5.1% behind the US by 2012.”

These figures reinforce an earlier analysis for Urban Milwaukee by Bruce Thompson, who found the state fell behind the nation in growing jobs in the early years under Gov. Jim Doyle but later exceeded the nation in jobs growth, only to fall backwards again under Scott Walker.

Wistax also notes that Wisconsin has done somewhat better in average household income growth than in per-capita income growth. Why? More workers per household. “In brief, Wisconsinites compensate for lower wages by having relatively more women working to supplement household income,” the report notes.

Abele’s Pick for County Corp Counsel

Milwaukee County Executive Chris Abele has appointed Paul Bargren to serve as Corporation Counsel. It’s an impressive pick. Bargren was a lawyer and litigator with Foley & Lardner LLP, where he handled environmental and insurance matters, as well as defamation and open records matters.

Bargren’s resume shows that he was given the highest performance rating in Martindale-Hubbell’s peer review rating system and was selected by peers for inclusion in The Best Lawyers in America since 2011 in the fields of commercial litigation, advertising law and litigation – environmental.

Longtime newspaper readers will recall the many years Bargren spent as a well-regarded reporter and later, an editor with the Milwaukee Journal. “He was a great reporter and one of the finest editors I ever worked with,” says one veteran Journal scribe.

There has been no word from the Milwaukee County Board, which dumped the previous  corp counsel, Kimberly Walker, in what seemed like a vindictive and unjustified move, as I’ve noted. Here’s hoping the board approves this appointment.




Categories: Murphy's Law

16 thoughts on “Murphy’s Law: The Problem of Poverty”

  1. dohnal(Wis. Conservtive Digest says:

    We have spent trillions on poverty since 1965 and we have more of it and it is not getting any better. Time to look at what we are doing. We have bought one Left wing program after another, we have let the Left run the schools and the kids cannot read and yet we expect poverty to go away with the birdbrains running the programs.
    if the Left paid as much attention to solving the reading problem as they do the phantom global warming maybe kids could read.

  2. East Slider says:

    Have to agree with dohnal on this one, the number of Americans living below the poverty line was on a steady decline from the depression until the late 1960’s, just when the “Great Society” programs began taking effect. We’ve created much more than a safety net, we’ve created a “safety hammock” where many people fall in and never get out! We have now multiple generations of “families” (a term I use loosely because since the Great Society began, the father has been pretty much extricated from most families in poverty) that have existed totally on government programs for their entire lives.

  3. MilwMike says:

    If all those lazy deadbeats just went out and got a job all would be well. Let’s go back to that Great Society and send people to American Motors, Square D, Pabst, Schlitz, AC Delco, A.O. Smith, Allis-Chalmers, Sealtest for a good paying job. What? You say Briggs & Stratton, Allen Bradley/Rockwell, Delphi, etc., are hiring? Good! What? Those jobs are in China? What worker was responsible for sending those jobs over there? None. None is the answer. When America becomes second to China in the world just remember who sold them the technology and the means to leapfrog past us. It wasn’t Joe or Josephena Sixpack. You say it was the Great Society that started America’s decline? Bull s%$#! I submit it was our industrialists rushing overseas to fatten their wallets, American workers be damned.

  4. Dean Deardurff says:

    It’s called the democratic party. Whats new here? They just can’t kill enough babies to change the facts. They just cant seem to take away enough of ones freedom to make a difference. They can’t dumb down enough of the citizens fast enough. What needs to be done now is Marshal Law declared for the county. Put everybody in internment camps. Double the tax rate here.We need more Government and less freedom… We need more journalist to not tell us the truth. We need someone like……….well….obuma ……for the city— Governor– and state legislators… We need someone to dictate like Stalin…with a firmer hand and use a knife, rather than a gun to kill more people……..

  5. MilwJohn says:

    It’s true that the gap between rich and poor has never been higher. The rich get richer under the policies of the Obama Administration and his hand picked Federal Reserve. MilwMike-Obama policies have made wealthiest people very happy. The middle class continues to struggle. Poverty in Milwaukee is a complex problem. But it all starts due to the breakdown of the family structure. HIV and AIDS is a major problem you could have addressed as well.

  6. tim haering says:

    Oh, hush about fracking. The nat gas it provides will do more for the economy and the environment than all your SOlyndras and Teslas and GE windmills. And while I admit, wealth disparity in America is widening, threatening our economic base, and some Americans have it rough … for Americans … I bet there are hundreds of millions across the seas who’d love to be “poor” in America. “Could we have kippers for breakfast, mommy dear, mommy dear?” Stop making sense, talking head.

  7. Joe D. says:

    I have to believe that a lot of the issues with poverty has to do with the inability of the general population to read proficiently. Last year, only 16 percent of Milwaukee third graders and 14 percent of fourth graders could read proficiently, according to state testing. copy/paste this link to see the results:

    The numbers didn’t get better as the students got older. Only 14 percent of 10th graders could read proficiently, according to the data.

    Those numbers are mind-numbing, but none of the results statewide were good. Only about 35 percent of third graders and 38 percent of 10th graders could read proficiently statewide.

    An inability to read proficiently is a direct ticket to poverty.

    Studies show that the only way to get kids to read is to put books directly into the hands of children. If parents aren’t doing this — and clearly they aren’t — the community is going to continue to struggle.

  8. Tom D says:

    tim haering wrote: “Oh, hush about fracking. The nat gas it provides will do more for the economy and the environment than all your SOlyndras and Teslas and GE windmills.”

    I beg to differ.

    Much of the natural gas produced by the North Dakota wells is just being “flared”–burned as a waste product right at the well, with only the oil being shipped out.

    So much is burned (about $100 million worth of gas each month) that it can be seen from space. If you look at satellite photos of the US at night, it looks like North Dakota contains a huge Chicago-size city because of all the light from the burning natural gas.

    You can see a satellite photo of that flaring flagged here:

    A higher resolution image (a great photo even if you ignore the burning gas) is here:

  9. Bill Sweeney says:

    As Bruce wrote recently: “That 2.2 trillion owned by 400 people is greater than the wealth of the bottom 50 percent of Americans, meaning 150 million people make less in total than these 400 plutocrats.” This is an obscenity. It is a perversion of the American Dream. Near the top of the gang of 400 are the Walton heirs whose money came from the Wal-Mart stores where many of the employees have to resort to Medicaid insurance and food stamps. So the taxpayers have been placed in the role of accomplices to this mammoth accumulation of wealth. What would happen if Wal-Mart employees were given a decent wage and comprehensive health insurance? They would spend more which in turn would help the overall economy. The Walton heirs cannot spend all that money even if they wanted to so it just sits, not trickling down or sideways or out. Why don’t people who have obscene amounts of money feel ashamed when there is so much better uses that money could be put to? Don’t they read the Bible?

    Robert Reich uses the image of a suspension bridge to describe the changing gap in inequality over the years. The gap was very large in the 1920s but then gradually narrowed and was smallest during the post World War II years (remember the GI Bill) and since the late 1970s with the emergence of Reaganomics, inequality has grown to match or surpass what it was before the 1929 crash on Wall St.

    Several myths seem to be at work when we consider poverty. One is that we have repeatedly thrown money at the problem and nothing works. In fact the so called war on poverty was just a skirmish, overwhelmed by the actual real war in Vietnam. I would guess that a majority of people would agree that what we value most is our children and our elders, but look at what we pay people who do child care or take care of our elderly. If we truly valued children, education would be our number one priority. Even the Wisconsin Policy Research Institute believes that we should have comprehensive early childhood education but it doesn’t get done. Another myth is that, despite all of its problems, the US is still doing better than other industrialized nations, but the data do not support this belief:

    One angle in considering poverty is the loss of memory. It used to be that a majority of Americans had parents or grandparents who had lived in significant poverty. There were stories passed along. Consider all of immigrant groups and their stories. But that is no longer the case, and perhaps when there are not the stories, it becomes easier for some to lock their empathy away in a closet and forget where they came from.

  10. stacy moss says:

    “while the District of Columbia, boosted by all that government, enjoyed a 23.3 percent increase.”

    Best argument I have ever heard for more government in the State of WIsconsin.

  11. STACY MOSS says:

    “We have spent trillions on poverty since 1965 and we have more of it and it is not getting any better.”

    Dear Dohnal:

    We don’t spend money “on poverty”.

    We give money to people.

    People who are hungry, who lost their jobs and have to feed their families, who are sick and disabled. We give money to veterans who fight our wars.

    It’s what Jesus would do.

  12. Dohnal(Wis. Conservtive Digest says:

    Why is that surprising? we have Mayor in Milwaukee that has done little in ten years except to run for other offices, now he wants to be a judge. MPS has gone down hill since John Reynolds condemned them to death in 1974. The more that the Unions and Feds got involved the worse it has gotten but the staffs have been paid well. this is Union town that has done best to keep out Wal-Mart and other places that have gone to Waukehsa that has grown.
    Doyle and company drove out 150,000 jobs and many big taxpayers in 8 years and now it is tough to bring back. Faced with Obamacare small businesses are not expanding except handing out part time jobs, I see that every day in my apts. All of the growth is down south and willl only change slightly even though Wisconsin is now better run.
    Of course the Left wants to raise taxes some more on the 8 people that live here with money and create jobs.
    Face it, I have studied that income structure in thsi state for 50 years and we simply do not have lot of money here, those that ahve a few bucks are heavily invested and working 60 hours per week in their businesses. the people that are best off work for the govt.

  13. dohnal(Wis. Conservtive Digest says:

    Under Doyle we lost jobs, under Walker we have picked up slightly but people are wary of wisconsin and it’s leftists, growth is down south where people have different outlook.

  14. Stacy Moss says:

    “Face it, I have studied that income structure in thsi state for 50 years and we simply do not have lot of money here, those that ahve a few bucks are heavily invested and working 60 hours per week in their businesses. the people that are best off work for the govt.”

    Then reference the sources of your findings (and use spellcheck).

  15. Dohnal(Wis. Conservtive Digest says:

    Jesus wanted people to work as he did, not sit around and get welfare. All you have to do is go the Taxpayers group in Wisconsin and they can tell you what the breakdown is for income in this state very few in the high brackets.
    Doyle and company tried this magical theory of raising taxes on the wealthy and people moved out. Under Tommy in 8 years we gained 400,000 jobs and in Doyle’s tenure we lost 150,000 for net loss of 550,000, this is typical disaster when the Left runs anything
    Under Obama, after 5 years the middle clas and the lower classes have seen disaster. They can only get part time jobs cause of Obama care, their purchasing power is down over 10%, typical results when Leftist run things.l The wealthy are doing just fine. The Obama tax increase in January, even condemned by Krugman of all people set the economy back and it is slipping along with Obama’s popularity, down to 39% on the economy and worse they do not have any answers.
    The truth really hurts. The Left is apoplectic cause of the shutdown is backfiring on them, they become increasingly shrill, even sanctioning losing kids with cancer.
    This thing s blowing up, time to sit down and put this all into one package, debt limits, CR and the economy but Obama and company are failing to work with anyone, like Tip and Reagan did and Newt and Bill.
    This is going to get far worse cause nothing has been done in five years to make it better.
    Even our esteemed mayor wants to get out, after running most of the time for Gov., he now wants to be a judge.

  16. Kyle says:

    Dohnal, you don’t usually do your cause any favors with your rambling, barely coherent statements. Now your math is getting particularly bad. If Tommy gained 400k jobs, and Doyle lost 150k, that’s a net GAIN of 250k. If Doyle lost 550k jobs, it would still only be a net loss of 150k. Doyle’s net loss, as best as I can tell from: ( ) was less than 100k jobs, and that was primarily due to the recession when over 200k jobs were lost. If you have different information, that’s actually documented not just remembered from your vast wealth of experience, then I’ll be happy to look at the numbers again.

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