Despite recent U.S. Census Bureau data showing reductions in the poverty rate and increases in household median income, 678,000 Wisconsin residents still face double jeopardy in today’s economy. Not only do they live below the poverty line, they also face high costs in areas such as rent, food, child care and predatory lending.
That’s the finding of The High Cost of Being Poor in Wisconsin, a new report released today by 9to5 Wisconsin and the Coalition on Human Needs. Among the report’s highlights:
- 58 percent of Wisconsin’s households with annual incomes below $20,000 spend more than half of their income on rent alone.
- Child care accounts for another exorbitant expense. The average cost in Wisconsin for an infant in a child care center is more than $11,500 a year; for an infant and a four-year-old, it’s more than $21,000. A family at the poverty line with an infant and toddler in child care would have to spend 87 percent of its income on child care, if paying the state average cost. Without a subsidy, low-income families have no choice but to make cheaper and often less reliable arrangements.
- Anti-poverty programs help many. Programs such as low-income refundable tax credits, SNAP, free or reduced-price school lunch and child care subsidies have helped lift tens of millions of Americans out of poverty, including more than a quarter of a million Wisconsin residents.
- But many anti-poverty programs don’t reach many who are eligible and other programs would do more good if their benefits were higher or if more people were eligible.
“Low-income refundable tax credits have lifted 110,000 Wisconsinites out of poverty each year, on average, from 2011 to 2013, and another 130,000 were lifted out of poverty each year, on average, from 2009 to 2011 due to SNAP,” said Astar Herndon, 9to5 Wisconsin State Director. “44,000 Wisconsin residents no longer live below the poverty line because of housing subsidies. It’s clear that anti-poverty programs are sound investments in Wisconsin and particularly for Wisconsin’s families with children. We must do all we can to lift up opportunity in our state. Like any sound investment, the more we put in, the more we get out. We need to strengthen anti-poverty programs and improve low-wage jobs to help Wisconsin families be able to make ends meet.”
“It is good news that the poverty rate is down, median household income is up, and more Americans are finally benefitting from an improved economy, coupled with federal programs that increase income or reduce expenses,” said Deborah Weinstein, Executive Director of the Coalition on Human Needs. “But the more troubling news is that the poor and near-poor live in a precarious situation. The simple fact is, it is expensive to be poor in Wisconsin.”
The High Cost of Being Poor in Wisconsin found many ways in which it is expensive to be poor: Rents consuming huge proportions of income, higher food prices because of lack of access to markets, late fees for unpaid rent and evictions, poor housing conditions leading to health issues, which in turn lead to missed days of school or work; lack of paid sick days, paid leave, and unpredictable work schedules; and predatory lending practices such as pay day lending.
The report includes recommendations for reducing poverty further for the 678,000 adults and children who live at or below the poverty line in Wisconsin. These recommendations include increasing federal funding for housing and child care subsidies; expanding the Earned Income Tax Credit and Child Tax Credit; increasing SNAP benefits and improving Child Nutrition programs while reauthorizing them; expanding health care coverage to low-income Americans by drawing down federal Medicaid dollars in the 19 states that have not done so; a strong rule finalized from the Consumer Financial Protection Bureau to stop predatory lending; and raising the minimum wage and helping workers get more paid hours through paid sick days, paid leave insurance and more predictable hours.