Safety net programs kept families from poverty, report finds

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Posted June 21, 2013

Is the social safety net still working in Wisconsin? In a word, yes (but not quite as well as it worked in 2010). Tax-related provisions and near-cash benefits provided a buffer against poverty for many working families in 2011, a new report by the University of Wisconsin–Madison finds.

In the fifth annual Wisconsin Poverty Report, researchers at the UW’s Institute for Research on Poverty (IRP) share the results of their annual re-crunching of the poverty numbers using the Wisconsin Poverty Measure (WPM). The measure is designed for Wisconsin’s policy issues and needs and so more refined than the one employed by the U.S. Census Bureau for the annual official poverty statistics.

The official measure considers only pre-tax cash income as a resource, failing to capture the effects of government efforts to stimulate the economy and ease economic adversity caused by the recession through temporary increases in safety net programs and other policies.

The WPM, which was developed by IRP social scientists in conjunction with IRP data programmer analysts, uses state and local administrative data to paint a more locally meaningful picture of poverty and to provide policymakers with a yardstick for progress or regress in the effort to protect Wisconsin families from economic downturns. In determining poverty status, the WPM considers cash resources, but also tax credits and noncash benefits, and costs such as child care and health care that reduce available resources.

Largely owing to the recession and to our weak economic recovery through the end of 2011, the poverty rate based on earnings alone rose from 21.3 to 25.2 percent from 2008 to 2011. Hence the labor market had not recovered enough to begin to bring the poverty rate down in our state.

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