Economic Stress of Milwaukee’s Working Poor Exacerbated by EITC Cut

A recently released report highlights severe income disparities among working families in Milwaukee County and growing challenges for many families, particularly single mothers raising children.  The report by researchers at the UW-Milwaukee Employment and Training Institute (ETI) is based on a thorough analysis of the income tax records of Milwaukee County family tax filers (with dependents) for tax year 2012.

One of the worrisome findings is that the number of Milwaukee County single tax filers with dependents fell by 5% from 2011 to 2012.  The report’s authors, Lois Quinn and John Pawasarat, suggest that:

“in the aftermath of the recession, single parents appear to be unsuccessfully competing for low-wage jobs with other unemployed and underemployed workers.”

Some of the other major findings of the study include the following:

• The average family income in the lowest income zip codes within the county was less than one-twelfth of the average in the highest income “North Shore” zip code ($20,260 vs. $253,082).
• 56% of working-age tax filers with dependents are single filers rather than married couples.
• The cut to the Wisconsin earned income tax credit (EITC) in the 2011-13 budget bill cost Milwaukee County families $9.5 million in tax year 2012, on top of $7.7 million the previous year.
• From 2010 to 2012, single parent filers in Milwaukee County lost 30% of their credits, and the number of single parents receiving the credits dropped by 5%.
• Almost three-fifths (59%) of the county’s single tax filers with dependents had income of less than $25,000 in 2012, “suggesting low wages, part-time jobs, high job turnover, and less than year-round employment.”

I highly recommend reading the report – both for the data and the discussion of some of the factors contributing to the severe economic challenges for Milwaukee families.

Jon Peacock