Milwaukee Journal Sentinel: Four Steps to Dramatically Reduce Poverty in the State

By David Riemer

September 28, 2012

Poverty remains a crisis in the United States and Wisconsin. Even when we use a realistic yardstick for poverty - one that counts all resources (instead of just cash) and is based on what it truly costs for food, clothing, shelter, utilities and health care - at least 8% of Wisconsinites are poor.

It would be far worse without existing government policies. According to the University of Wisconsin-Madison's Institute for Research on Poverty, more than 20% of all Wisconsinites - and more than 50% of our state's seniors - would fall below the poverty line but for government policies such as Social Security, food stamps, the Earned Income Tax Credit and the Homestead Credit. Thanks to existing policies, poverty in Wisconsin is "only" close to 10%.

Our goal should be to reduce poverty by more than half. Our policies should aim to drive the poverty rate to less than 4%.

The Community Advocates Public Policy Institute, in consultation with local and national experts, has developed "policy package" to achieve this goal. It includes: 1) a Senior and Disability Income Tax Credit; 2) a Transitional Jobs Program; 3) a minimum-wage increase; and 4) an Earnings Supplement Reform.

The policy package has been carefully analyzed by the Urban Institute, an independent research organization. The Urban Institute found that the policy package would dramatically reduce poverty in Wisconsin between 58% and 82% - to a poverty rate between 3.4% and 1.5% - depending on the takeup of the transitional jobs program and existing programs. These large reductions in poverty in Wisconsin would occur across the board: Children, adults ages 18 to 64, seniors 65 and over, African-Americans and Hispanics all would see major declines in their poverty rates.

Did you know that the majority of working age people living in poverty in Wisconsin actually work, some full time, some part time, some seasonally? Three of the four policies in the policy package aim to increase opportunities for work, supplementing income derived from low-wage work so that people can lift themselves and their families out of poverty through the dignity of work.

The success of the Wisconsin Transitional Jobs Demonstration Project proves the viability of using such programs to get people with significant barriers to employment into the productive labor force. The best training for work is work itself. Significantly expanding this program together with a restructuring of the Earned Income Tax Credit, including an expansion for childless adults, increases the ability of households living in poverty to work their way out of poverty.

The rigorous analysis of the Urban Institute, generously funded by the Greater Milwaukee Foundation, Anne E. Casey Foundation, Ford Foundation and the Charles R. O'Malley Charitable Lead Trust, provides clear evidence for how we can lift Wisconsinites out of poverty. It rebuts the fatalism that nothing can be done about poverty.

If we are wise enough to enact these policies, we will find that they not only sow the seeds of prosperity for those in poverty but will enable all of us to benefit from the harvest of abundance.

For the full report, go to communityadvocates.net/ppi

David Riemer is senior fellow and Conor Williams is economic policy analyst for Community Advocates Public Policy Institute of Milwaukee.

To view this editorial on the Milwaukee Journal Sentinel website, click here.

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