The income gap between the rich and the poor remains near its highest level ever, according to a new report by the Wisconsin Budget Project and COWS at UW Madison.
WBP and COWS said the chasm between the very highest earners and everyone else poses hardships for Wisconsin’s families, communities and businesses.
In 2014, $1 out of every $6 of income in Wisconsin went to the top 1 percent of earners.
The top 1 percent of earners had income of $335,000 or higher in 2014.
The top 0.01 percent in Wisconsin — the top 1 out of 10,000 — had incomes of at least $6.5 million.
The share of income going to the top 1 percent in Wisconsin has more than doubled since the 1970s, according to the report.
“Everyone in Wisconsin deserves the opportunity to succeed if they work hard,” Tamarine Cornelius of the Wisconsin Budget Project said in a news release. “But when nearly all the income gains go only to a select few, too many Wisconsin families are deprived of their shot at achieving their full economic potential.”
Some findings in the report:
• Between 1979 and 2014, the average income of the top 1 percent in Wisconsin grew more than 130 percent.
• For the same period, the average income of the remaining 99 percent grew by 9 percent.
• The top 1 percent in Wisconsin had an average income of $933,000 in 2014 — more than 19 times the average income of the remaining 99 percent.
• The gap is wider at the national level, with the top 1 percent making 27.4 times as much as the average income of the 99 percent.
• The top 0.01 percent in Wisconsin — the top 1 out of 10,000 — took home 3.4 percent of total income in Wisconsin and had an average income of $19.2 million.
The report showed income inequality in Wisconsin continues to grow after the Great Recession.
Between 2009 and 2014, the top 1 percent in Wisconsin saw 25.7 percent of total income growth.
The average incomes of the top 1 percent grew by 17.5 percent during this period, compared to 9.2 percent growth in the average income for the remaining 99 percent.
The report outlines strategies for mitigating the effects of growing income inequality:
• Raising the minimum wage to give a boost to the lowest-paid workers and strengthen labor standards.
• Building the skills and education of Wisconsin’s workforce by investing in technical colleges and improving the connections between training and employment.
• Supporting working families. Paid family leave and sick time will help more Wisconsin residents succeed in the workforce, as will a strong child care system and improvements to tax credits for working families.
• Removing Wisconsin Shares work hours requirements. Hours requirements do not make sense given the proliferation of jobs with unpredictable schedules. These rules prevent low-wage working parents from receiving child care subsidies provided by the state.
• Ensuring that workers have access to affordable health care.
• Making state taxes more equal across income groups. People with high incomes should pay at least as much taxes relative to income as people with lower incomes do.
• Easing driving suspensions that create barriers to work for people who are unable to pay state or local fines.
“Building more broadly shared prosperity is possible,” said Laura Dresser of COWS. “But it requires attention and policy focused consistently on promoting equity and opportunity.”