Income Inequality in Wisconsin Relatively Low, Growing

Thursday, October 27, 2011 at 8:56 PM by

Yesterday we took a look at how income inequality in the United States has grown over the last 30 years, and how the federal government is doing less about it. A new Census Bureau report released this week sheds light on whether trends in Wisconsin have followed a similar path.

Wisconsin is among the states with the least income inequality, although that inequality is growing. For the period 2005-2009, the Census Bureau ranked Wisconsin 46th in household income inequality as measured by the Gini index, a measure of the degree to which income or wealth is dispersed. That means that only four states (Wyoming, New Hampshire, Alaska, and Utah) had less income inequality. The states with the most income inequality were New York, Connecticut, Louisiana, and Mississippi.

In Wisconsin, the top tenth of households earned just under nine times as much as the bottom tenth, while in the U.S. as a whole, the top group earned more than 11 times the households in the bottom group.

Income inequality within the greater Milwaukee metropolitan area (which includes Waukesha and West Allis) is greater than the Wisconsin average but still lower than the national average.

The economic divide in Wisconsin is growing. According to an earlier report, the income of the bottom fifth of Wisconsin earners stayed virtually the same between the 1980s and the mid-2000s, and the incomes of the middle fifth increased by about $6,600. During the same period, the incomes of the top fifth increased by $31,600.

Recent policy changes in the Wisconsin budget will likely further increase income inequality in Wisconsin. The 2011-13 biennial budget included both a capital gains tax cut for the well-off ($36 million over two years) and increases in taxes paid by the less well-off ($56 million reduction in the Earned Income Tax Credit and $14 million reduction in Homestead Credit).

Tamarine Cornelius

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