Wall Street records and rosy headlines fail to capture the growing gaps faced by working poor
Never mind the booming stock market, or historically low unemployment in Wisconsin. Laura Levine doesn’t feel like she benefits from those typical indicators of a strong economy.
Instead, Levine, a 29-year-old single mother of three who lives in Chippewa Falls, feels her life has become one unending, out-of-balance math equation. She works two part-time jobs, in an insurance office and as a waitress, and makes income on the side periodically caring for friends’ children.
Still, Levine has difficulty making ends meet. As she makes payments for such expenses as rent, food, child care and her vehicle, those costs always seem to be greater than money available to pay them.
“I work hard. I try really hard to support my family,” Levine said. “But costs keep rising, and my income can’t keep up.”
Levine is far from alone, statistics in Wisconsin and the United States show. Even as the stock market continues to set record highs, even as the unemployment rate is at historically low levels, a growing number of people struggle to make ends meet.
In Wisconsin, a study released last year found that while the number of state residents living at or below the federal poverty level remained relatively steady, at 10.2 percent, the percentage of people earning above poverty-level wages but still facing economic difficulties — commonly referred to as the working poor — continues to grow.
According to the 2018 Asset Limited, Incode Constrained, Employed (ALICE) report by United Way of Wisconsin, 42 percent of Wisconsin households in 2017 lived below the ALICE income threshold, meaning those families experienced difficulty meeting basic living expenses,—up 3 percent from two years earlier. Of those designated as ALICE, 13 percent earned incomes below the federal poverty level and another 29 percent earned more but not enough to pay for basic needs, such as food, housing and transportation.
According to the most recent figures, a single adult in the state must make at least $19,848 to afford those costs. A family of four must earn at least $61,620, or a combined hourly wage of $30.81, to make ends meet.
Headlines during 2019 touted record-low unemployment figures, typically thought by many to be an indicator of a strong economy. In November, the Wisconsin unemployment rate was just 3.3 percent, up from a record low of 2.8 percent in April and May but below historical norms. The national rate is 3.6 percent.
LIkewise, the U.S. stock market continued its climb in 2019. The tech-heavy Nasdaq rose 35.2 percent during 2019 while the benchmark S&P 500 climbed 28.9 percent. Those figures marked the largest annual gains for those market indicators since 2013. Similarly, the Dow increased 22.3 percent last year, its biggest yearly bump up since 2017.
However, studies have found that many in Wisconsin and elsewhere don’t benefit from those factors. While investors have done well amid a bullish stock market, many middle- and-lower class wage earners, some of whom have no market investments or 401k retirement plans, often have not. In recent years the trend of higher-pay manufacturing jobs in Wisconsin and elsewhere in the U.S. moving overseas has continued, leaving many to work in lower-wage jobs in that sector, or more commonly, in the services industry, generally known for its relatively low pay and benefits.
Furthering financial strains for middle- and-low-income families is the fact that fast-rising costs of living are outpacing generally stagnant wages. For many making wages at those levels, pay has remained relatively flat since the Great Recession of 2008, even with a worker shortage, according to economists..
In many Wisconsin cities, costs for such living basics as housing, health care and child care have risen substantially since 2010 while pay for many has failed to keep pace. In Madison, Milwaukee, Eau Claire, Appleton and other locations across the state, housing costs have increased from 150 to 200 percent during the past decade, experts said.
For example, the average monthly rent in Madison currently is $1,242. Just three years ago that figure was just over $1,000. Similarly, in Eau Claire rents have nearly doubled during the past decade and currently top $800 monthly in the west-central Wisconsin city of about 70,000.
In addition, many younger Wisconsin residents are saddled by large student loan debt repayments, making affording housing and other expenses especially difficult.
“Paying for housing and other living costs is becoming more and more of a struggle for a growing number of people,” said Michael Basford, director of the Wisconsin Department of Administration’s Interagency Council on Homelessness. “If we don’t start to work on this issue more effectively, we will face a crisis.”
Sheri Johnson, director of the Population Health Institute at UW-Madison, said people struggling economically often face additional challenges in the form of poorer health outcomes. Studies show people making little income typically have worse health than those with more money, in part because they lack access to such health indicators as quality food and health care.
“The relationship between employment, income and health is well-established,” she said.
Levine, who said she earned about $19,000 last year, knows that fact all too well. With a high-deductible health insurance plan, she said she frequently skips medical visits herself in an effort to ensure her children, ages seven, five, and three, can see the doctor. She can’t always afford to buy healthy food for her family, she said, and has fallen behind on paying bills the past two months. She worries she is only a car breakdown or medical malady away from losing her apartment.
Levine hopes to one day attend further schooling to get a higher-pay job. But for now she’s trying to keep a roof over her family’s head.
“I have dreams of a better future for myself and my family,” she said. “I hope for that someday. Right now I just can’t see how that’s going to happen.”