The Wisconsin Poverty Report: AN UPDATE and a Look at Poverty Need and Policy in Wisconsin and Nationwide A Report from the Institute for Research on Poverty December 2009 Tim Smeeding Director and Distinguished Professor of Public Affairs

First Wisconsin Poverty Report Released in April 2009 Looked at poverty data and change in SNAP/FoodShare enrollments to identify areas of greatest need Copies available at IRP Team (including Joanna Marks, Julia Isaacs) now working on improving the poverty measure and preparing a full report for June 2010 as a national model

Outline of Presentation Poverty Situation in WI—through a looking glass darkly Growing Need (jobs, men, fathers, poverty) Alleviation of need – food stamps/FoodShare and ARRA: 2009 and 2010 as crucial years Summing up for WI: where are we going next?

I. State poverty rates: How does Wisconsin compare in 2008 ? US: 13.2% Illinois: 12.2% Iowa: 11.5% Michigan: 14.4% Minnesota: 9.6% Wisconsin: 10.4% Source: 2008 American Community Survey.

What has Changed from 2007 to 2008? US Poverty Rate in 2008: 13.2% (US Poverty Rate in 2007: 13.0%) WI Poverty Rate in 2008: 10.4% (WI Poverty Rate in 2007: 10.8%) No statistically significant changes. Why? Sources: 2007 and 2008 American Community Surveys.

Timing of the 2008 ACS Each ACS family interviewed once during calendar year (Jan-Dec 2008) about income in prior 12 months. Thus, the ‘annual income’ data covers 23 sets of months, January 2007-Nov 2008 (next slide). Recession began December 2007, meaning much of family income data in 2008 ACS reflects pre-recession income in 2007 and early Impact in Wisconsin not felt until early 2009.

American Community Survey and the Recession Ja n Fe b M ar A pr M ay Ju n Ju l A ug S ep O ct N ov D ec Ja n Fe b M ar A pr M ay Ju n Ju l A ug S ep O ct N ov D ec ↑ December 2007: Official start of the national recession Example: A person surveyed in December 2008 will report income for December 2007-November 2008 ← Income interview lag →

But when will the recession induced higher poverty figures show up? 2009 statistics to be released Aug/Sept 2010 What can we expect? BIG increases, greater than 1 and maybe 2 percentage points next year in income poverty

What’s New Since the First Report: A Quick 2008 ACS-WI Update New data from 2008 American Community Survey (ACS) released this fall : poverty rates by county or multi-county area State poverty rate in 2008: 10.4% Poverty maps: Red (highest, >12%); Dark Grey (10-12%); Light Grey (8-10%); White (lowest, <8%) Using Federal poverty definition today, but updating with better (NAS) approach over the next year

2008 Poverty Rates: 10 Largest Counties County2008 Poverty Rate Milwaukee17.8% Dane (Madison)12.3% Waukesha3.7% Brown (Green Bay)8.2% Racine9.5% Kenosha9.0% Rock (Janesville)9.5% Marathon (Wausau)4.3% Sheboygan7.9% La Crosse13.1%

Poverty Rates: Multi-County Areas Multi-County Area2008 Poverty Rate Ozaukee/Washington4.1% Jefferson/Walworth12.1% Chippewa/Eau Claire8.1% Calumet/Outagamie/Winneb. (Appleton)7.2% Columbia/Dodge/Sauk (Baraboo)7.5% 5-county area (Menomonie)10.1% 5-county area (Dodgeville)10.5% 6-county area (Manitowoc)10.1% 7-county area (Fond du Lac)8.0% 8-county area (Sparta)11.1% 9-county area (Stevens Point, Crandon)10.8% 10-county area (Superior)12.0%

Poverty Rate for 2008 by Wisconsin PUMAs/PUMA Groups For All Individuals

Areas within Milwaukee County Area2008 Poverty Rate Outer Northeast and East17.9% Inner North25.1% Central40.1% South18.6% Brown Deer, Glendale, Shorewood, Wauwatosa, Whitefish Bay, Other 5.7% Southern Suburbs*8.4% Milwaukee (Overall)17.8% *Cudahy, Franklin, Greendale, Greenfield, Oak Creek, South Milwaukee, West Allis, Other

Poverty Rates in Milwaukee Super-PUMAs, 2008

II. Assessing and Meeting Needs The depths and impact of the recession (unemployment and lower employment) Effect on younger undereducated men Still growing role of food stamps in the US and Wisconsin in alleviating hunger The rest of the ARRA nationally – what helps whom and when?

Sources Gary Burtless: “Recession and Redistribution: The Economy, Public Policy, and the Poor “ IRP Seminar November, 19, 2009, at /Burtless-IRP pdf- Tim Smeeding: “Young Disadvantaged Men: Fathers, Families, Poverty and Policy” September 2009, IRP “Fathers” Conference Overview, PowerPoint available from author

Unemployment Rate in Wisconsin by Month, Source: Bureau of Labor Statistics. Note: October 2009 data are preliminary. December 2007

27.5 %, United States

Who are these young workers who are getting clobbered? Mostly young undereducated men and most of them out of wedlock fathers Plagued by three reinforcing forces: bad economy and joblessness multiple out of wedlock childbearing high incarceration risk Result lots of poor kids with absent fathers who are earning enough to support them (or to pay child support)

Fatherhood (2002) Percent of Young Men Who are Fathers By Age 22 By Age 30 All Men 21% 56% Less than HS 38% 73% High degree only 32% 64% BA+ 3% 38% Fathers earning less than $20,000 62%

Birth Patterns of Women And Men by Level of Education, Women in 1960–1964, Cohort Observed in 2004 Sources: Ellwood, Wilde and Batchelder, 2009; Berger and Langton.

Total Kids with Poor Life Chances? Over a ‘lifetime’ (women and men up to age 40 in 2004), total number of kids (total fertility) in each mother’s education grouping (similar education or less for fathers): Dropouts 16 percent HS only 32 percent (includes GED) Some college 28 percent BA+ 24 percent 48 percent of all kids in the USA today come from parents with low educational backgrounds; parents who are more likely to be unemployed, lowly paid and poor

Bottom lines in needs assessment for US and WI Long term unemployment at all-time high in US; recovering a bit in WI but still high ‘Biggest losers’, younger undereducated fathers (and also to a lesser extent mothers) and children of same. Personal income fell 8 percent in aggregate, ( to ) but in terms of distribution, fell most for the younger workers at the bottom of the income ladder

What has been done about poverty nationwide and in WI? SNAP/FoodShare to the rescue again Nationwide now serving 1 in 8 people in USA; nearly 1 in 4 children in USA And only slightly fewer in Wisconsin (1 in 9 people here —650,000 of million; 40 percent of kids in Milwaukee alone) With both sets of participants still rising ARRA – what is being spent where, how and on whom?

Changes in US SNAP receipt from 2007 to June 2009 (map from New York Times, 11/29/09)

Source: Wisconsin Department of Health Services. Data are through October Number of Wisconsin Food Share Recipients by Month, December 2007

National Economic crisis: Impact and remedies Most anti-recession government actions are familiar: – Temporary tax reductions – Extensions of unemployment benefits – Increased government investment in buildings, roads, technology But this time there are unusual federal actions: – Generous health insurance subsidies to individuals – Massive grants to state governments for education and Medicaid/SCHIP – Emphasis on protecting education & training

US ARRA Special programs for the unemployed Unemployment benefit extensions of up to 73 weeks -- giving a total of 99 weeks protection – Length of extension tied to state unemployment rate, not local unemployment rate Federal gov’t. pays all extra cost $25 / week hike in benefits (8%) $2,400 of yearly benefits are tax free 65% federal subsidy for continued health insurance – An all-time first

Special ARRA programs for the poor 14 percent increase in monthly food stamp allotments in April 2009 Aid to the states for social assistance-TANF for children (but need to buy down) Doubling of budget for training the unemployed and hard-to-employ Large increases in EITC and refundable Child Tax Credit

ARRA Aid comes in three types 1. Fiscal relief for states 2. Direct income assistance and services 3. Infrastructure (those ‘shovel ready’ projects everyone has been talking about) Timing and patterns of each are very interesting and non-intuitive

Economic Crisis & Social Protection Impact and remedies in perspective What is old: – Automatic stabilization of lower taxes and higher benefits and standard gov’t. reactions – such as tax cuts; UI increases and infrastructure spending projects What is new: – Health insurance for the unemployed – Massive federal aid for state governments – Unusual focus on protecting education & training What Congress avoided: – Huge investment in public works (They’re too slow)

III. Pulling the Picture Together Even with small poverty changes from , we can see if any patterns are beginning to emerge and they will intensify in 2009 New estimates including better income and poverty measures may show different patterns, but – Major need appears steady or growing in La Crosse and Milwaukee; also growing in Dane and Jefferson/Walworth Counties

High Poverty in 08 (12% or more) Average Poverty in 2008 (8-12%) Low Poverty in 2008 (Less than 8%) High Poverty in 2007 (12% or more) La Crosse County Milwaukee County Kenosha County Rock County 9 central WI counties (Stevens Point, Crandon) 10-county area (Superior) Average Poverty in 2007 (8% to 12%) Dane CountyBrown County Racine County 5-county area (Dodgeville) 5-county area (Menomonie) Chippewa/Eau Claire Counties 6-county area (Manitowoc) 7-county area (Fond du Lac) 8-county area (Sparta) Columbia/Dodge/Sauk (Baraboo) Low Poverty in 2007 (less than 8%) Jefferson/Walworth Region Calumet/ Outagamie/ Winnebago Marathon County Ozaukee/Washington (West Bend) Sheboygan County Waukesha County Pulling It Together: Wisconsin Poverty in 2007 & 2008 by County/Region

Next Steps: This Morning and Beyond Listening to people around Wisconsin to develop a unique measure of poverty for our state Next report in June 2010 as national model built on new NAS guidelines Build a better tool for assessing economic, program and policy impacts

Thanks Send your reactions to me, please: Tim Smeeding Director, Institute for Research on Poverty