IRP Research Shows Antipoverty Programs Reduced Unofficial Poverty Rate in Wisconsin in 2010
A report released Wednesday by the Institute for Research on Poverty (IRP) at UW Madison examines the effects of the antipoverty programs on the poverty rate in Wisconsin. Not surprisingly, the official measure of poverty shows an increase in Wisconsin between 2009 and 2010. However, the IRP’s alternative gauge of poverty (the “Wisconsin Poverty Measure” or WPM) showed a decrease in the poverty from 11.1% to 10.3%.
Whereas the official poverty measure is based just on pre-tax cash income, the WPM uses a broader lens that also examines taxes, tax credits, and “near cash” income such as food stamps. Last year the IRP concluded that from 2008 to 2009 the alternative poverty measure was flat in Wisconsin, because the drop in families’ income was offset by tax credits and food assistance benefits, which were enhanced that year by the federal Recovery Act. Read more
Katniss. Gale. Peeta. Panem. If these names mean nothing to you, you’ve been able to avoid the hype of The Hunger Games, now showing in movie theaters. Many Wisconsin families are living out their own version of the Hunger Games. One in four Wisconsin children live in families that depend on food stamps to make ends meet, and the number of Wisconsin residents receiving food stamp assistance has more than doubled in the last four years.
The federal budget proposed by U.S. Rep. Paul Ryan (R-WI) would make deep cuts to food stamp spending, while handing out enormous tax cuts to the best-off.
For more information about Wisconsin’s own version of the Hunger Games, read the newest blog post by the Wisconsin Council on Children and Families.
Tamarine Cornelius Read more
Did the Recovery Act reduce the number of people living in poverty during the recession? That’s a natural question to ask, but unfortunately, traditional measures of poverty aren’t of much use in providing an answer. That’s because the official poverty measure doesn’t take into account tax credits, food stamps, or other important forms of Recovery Act assistance that gave a boost to families struggling to lift themselves out of poverty.
Researchers in Wisconsin have pioneered an alternative measure, called the Wisconsin Poverty Measure, which takes a broader look at a family’s resources and paints a more complete picture of a family’s poverty status. The Wisconsin Poverty Measure – which we’ve highlighted in our blog here and here has garnered national attention, most recently in a August 8 post by Brookings called “Better Data, Better Outcomes: How Public Policy is Helping Poor Children.”
Using the Wisconsin Poverty Measure, researchers have shown that there was no increase in child poverty between 2008 and 2009. Read more
As federal lawmakers grapple with options for reducing the federal deficit, some have suggested that the welfare reform block grants, known as Temporary Assistance to Needy Families (TANF), serve as a model for how to reshape the funding for other public benefits, such as Medicaid and food stamps. House Budget Committee Chairman Paul Ryan and others contend that the “success” of welfare reform and the TANF block grants illustrates how the federal government can save money by giving states more flexibility, in exchange for reduced funding and an end to the current entitlement nature of these programs.
A new report by University of Wisconsin researchers shows that the Recovery Act helped shelter state residents from the worst effects of the recession.
By official measures, poverty in Wisconsin rose from 10.2 percent in 2008 to 12.4 percent in 2009, according to the report. But the official measure of poverty takes only cash income into account. This means that non-cash income like tax credits or food stamps – both of which were significantly expanded by the Recovery Act and both of which can make a big difference to a family’s bottom line – are not considered when determining poverty status.
The Institute for Research on Poverty has developed an alternative measure of poverty. Here’s a description of their measure, fittingly called the Wisconsin Poverty Measure:
“[The Wisconsin Poverty Measure] takes a broad view of resources, incorporating not only pre-tax cash income, but also the estimated value of other federal and state resources to offset need.
The budget plan approved by the U.S. House of Representatives, and spearheaded by Wisconsin’s own U.S. Rep. Paul Ryan, would slash federal anti-poverty programs and support for working families. Of the $4.5 trillion in federal spending cuts included in the plan over the next ten years, about two-thirds would come from programs for low- and moderate-income families. The effects on Wisconsin families still struggling to shake off the effects of the recession could be devastating.
The House budget could also limit the federal government’s ability to respond to future recessions. The proposed changes would make significant structural changes to food stamps and Medicaid, both of which were temporarily expanded by the Recovery Act. Increased food stamp benefits put money directly into the pockets of people who had been adversely affected by the recession, and the enhanced Medicaid program proved effective in delivering resources to cash-strapped state governments. These and other provisions in the Recovery Act kept 4.5 million people out of poverty. Read more
The federal Recovery Act kept 4.5 million people out of poverty, according to a recent Center on Budget and Policy Priorities (CBPP) analysis of Census Bureau figures.
Back in September, the Census Bureau released figures showing that according to the official measure of poverty, the poverty rate increased from 13.2 percent in 2008 to 14.3 percent in 2009. The Wisconsin Budget Project blog post on that topic is here.
The official poverty measure paints a somewhat incomplete picture, since it doesn’t include tax credits or non-cash assistance when determining whether an individual falls below the poverty line. This means the official measure may have somewhat overstated the percent of people in poverty, since the measure did not take into account the assistance many struggling families received through provisions in the Recovery Act.
CBPP’s report highlights recently-released poverty figures from the Census Bureau that rely on alternative measures of poverty. These alternative measures include tax credits as well as non-cash benefits and therefore give a more complete picture of the change in poverty status between 2008 and 2009. Read more
A new report estimates that portions of the 2009 Recovery Act cut poverty levels in Wisconsin by 1.4 percentage points for all families and by 2.6 percentage points for children.
The Institute for Research on Poverty at UW-Madison built a model to analyze the effect of four programs created or expanded by the Recovery Act: food stamps, refundable tax credits, Making Work Pay Credit, and Economic Recovery Payment. This Wisconsin Budget Project paper shows that Wisconsin residents received more than $3 billion from a variety of Recovery Act direct benefits between February 2009 and May 2010.
The researchers developed a Wisconsin-specific measure of poverty to reflect economic needs and resources in the state. Working from 2008 data (because the 2009 figures weren’t out yet), they found that if the Recovery Act provisions had been in effect in 2008, they would have reduced poverty in Wisconsin by about 75,000 persons, including 35,000 fewer poor children than there actually were in Wisconsin in 2008. Read more
With Thanksgiving two days away, the mind naturally turns to food. So we’ve been contemplating important food-related public policy issues, such as whether it’s better to put the stuffing in the bird or roast it alongside. Also: will the new legislature have the courage to address the long-unsettled issue of cranberry sauce made from a can vs. homemade?
Those important topics led us to wonder about food security in Wisconsin during the recession, and a new WCCF blog post takes a look at that issue, as well as the sharp increase since 2008 in FoodShare participation. It summarizes a USDA report released earlier this month, which shows that the share of Wisconsin households with any food insecurity increased from an average of 8.9 percent over the 2004-06 period to 11.4 percent in 2007-09, a statistically significant jump. Fortunately, the state has made great strides in improving enrollment in FoodShare over the last couple of years, which we suspect will turn around the upward trend in food insecurity — and for that we are very thankful.
Happy half-birthday to The Recovery Act!
Tomorrow marks the 18-month anniversary of The Recovery Act. To celebrate, the Wisconsin Budget Project has released an analysis that found that six types of direct benefits provided by the Act generated more than $3 billion for Wisconsin residents between February 2009 and May 2010. Wisconsin residents have received an average of $532 in direct benefits per person.
Most people know that the stimulus has provided funding for “shovel-ready” projects such as highway maintenance, but it is a well-kept secret that more than one in five stimulus dollars went straight into the pockets of people struggling to make ends meet.
The direct benefits and the amounts allocated in Wisconsin are:
• the Making Work Pay tax credit for workers – $1,547 million;
• additional weeks of jobless benefits for the long-term unemployed – $683 million;
• an additional $25 per week of jobless benefits – $324 million;
• a one-time “Economic Recovery Payment” to many elderly people, veterans and people with disabilities – $254 million;
• increased FoodShare benefits – $162 million; and
• health insurance premium assistance – $54 million. Read more