March 31, 2008

Wisconsin's income gap: We're falling behind U.S., region

This gloomy Monday brings another of those reports about Wisconsin's economy guaranteed to add to your malaise. (Like last week's report on the county's slow real estate value growth, Property values, the have's and the have not's.)

Today's report -- Measuring Success: Benchmarks for a Competitive Wisconsin -- grades the state (alas, no curve, no Gentleman's C) by comparing us to other states. Sit down before you read further, because the news isn't good.

-- For example: Wisconsin's per capita income is $34,476, compared to the national average of $36,629, a difference of 5.9% (and the largest gap since 1991). The comparison is worse when our incomes are matched against folks in Illinois ($38,297) and Minnesota ($38,751).

-- Not only do our jobs not pay as much, but we're not growing very many more of them. In 2006, the number of Wisconsin jobs increased 0.7%, down from a growth rte of 1.1% in 2004 and 1.2% in 2005. Wisconsin trails the national average of 1.8% job growth.

-- How about the growth in private businesses? The number of new private businesses in Wisconsin dropped 0.4% in 2006, while the number of businesses nationally grew 2.5%. All of Wisconsin’s neighbors had increases in 2006.

The study is released annually by Competitive Wisconsin, Inc. (CWI), a nonpartisan consortium of state agriculture, business, education and labor leaders. Measuring Success grades Wisconsin on 33 areas of interstate competitiveness; compared to our performance in past years, 17 benchmarks changed this year: eight improvements and nine declines.

In October of 2007, CWI released its Competitive Mandate, for economic development in Wisconsin, which, the organization says, has the potential to grow Wisconsin's economy by $22 billion and generate $1.32 billion in new tax revenue each year, without a tax increase. “The goal of the CWI Competitive Mandate is to raise Wisconsin’s per capita income to the level of Minnesota’s – an increase of $4,275 per year to $38,751,” said Bill McCoshen, former Wisconsin Commerce Secretary and executive director of Competitive Wisconsin.

You can read the Mandate HERE, and decide for yourself whether this pro-business agenda is good or bad. For now, here are more of the state's grades from Benchmarks for a Competitive Wisconsin 2007.

--Despite our lower per capita income, a state-by-state comparison of the cost of living shows Wisconsin was 3.1% above the national median. Since 1985, our cost of living fluctuated between 1.9% and 4.0% above the median state.

--Wisconsin’s median household income ($51,692) rose above the national average ($48,201), recovering from the 2005 drop. Since 2001, median household income in Wisconsin has risen 14.0%, nearly twice as fast as household income in Illinois, Michigan, and Minnesota.

--We've heard a lot about Wisconsinites without health insurance. Well, it could be worse: Wisconsin’s uninsured rate (8.8%) declined for the third consecutive year and was the lowest since 2001 (7.3%). The state’s rate remained well below the U.S. average (15.8%) and was lowest in the region; Illinois has 14% uninsured.

--Violent crime rose in 2005 and 2006; at 284 crimes per 100,000 residents, the state's 2006 violent crime was a new high (after seven years of declines). Still, much of that is in Milwaukee, and the state as a whole is far below the national average of 474 per 100,000. And Illinois (542) and Michigan (562) are worse.

Health is a mixed bag: Below-birth-weight babies declined slightly, to 6.9% in 2006, below the national average (8.3%), Illinois (8.6%) and Michigan (8.3%). Fewer of us smoke -- 20.8% in 2006, compared to 24.1% in 2000; but more of us are obese: 26.6%, compared to 20.1% in 2000.

One more: return on federal dollars, a statistic at least partially dependent upon our Washington delegation's stand on earmarks. The state's return on federal tax dollars rose in 2005, reaching 86 cents per dollar paid in federal taxes. The state ranked above Illinois (75¢) and Minnesota (72¢), but has dropped 4.4% in the past five years.

You can
download the full 53-page report HERE.

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