By Shereen Siewert

Income disparity is worse for Wausau residents compared to most metro areas around the country, according to the latest research from the Economic Policy Institute.

Wausau’s figures, which examine the ratio of top 1% to bottom 99% income earners, also rank higher than Wisconsin in general. The top 1% average more than $1 million annually in Wausau, while the rest of city residents earn an average of just over $50,000 per year. That means the top 1% earn more than 20 times that of the city’s remaining 99%, a top-to-bottom income ratio that ranks Wausau 135th in income disparity among 916 metro areas around the country. The statewide ratio is 18.9, the study shows.

Sandi Kelch, who represents the Marathon Community Outreach Task Force, said the impact of income disparity is evident locally with more instances of people who lack housing and warm clothing appropriate for the sub-zero temperatures the city is experiencing now.

“We have more individuals living in their vehicles and in need of food, clothing, and – of course – shelter,” Kelch said. “We are also hearing from residents that they are having to choose between things like food and car repairs and paying rent.”

The rise of income inequality represents a sharp reversal of the trend that prevailed in the mid-20th century. From 1928 to 1973, the share of income held by the top 1% declined in every state for which we have data. This earlier era was characterized by a rising minimum wage, low levels of unemployment after the 1930s, widespread collective bargaining in private industries manufacturing, transportation, telecommunications, and construction and a cultural, political, and legal environment that kept a lid on executive compensation in all sectors of the economy.

“We need policies that return the economy to full employment and keep it there, return bargaining power to U.S. workers, increase political participation by all citizens, and boost public investments in child care, education, housing, and health care,” writes Estelle Sommeiller and Mark Price, of the Economic Policy Institute. “Such policies will help prevent the wealthiest few from appropriating more than their fair share of the nation’s expanding economic pie.”

Today, unionization and collective bargaining levels are at historic lows not seen since before 1928. Inflation is surging. The federal minimum wage purchases fewer goods and services than it did in 1968. Meanwhile, CEO pay has gone from 20 times greater than typical workers’ pay in 1965 to 271 times greater today.

Wausau Mayor Katie Rosenberg said the big opportunity municipalities have now to solve the problem is the ability to deploy funding from the American Rescue Plan Act toward some of the root causes. Wausau will receive $15 million in ARPA funding and will have until 2o24 to use the investment for the community.

“We have a lot of local non-profits doing amazing work to help bridge the gap when it comes to housing or food insecurity but also case workers to help folks get the resources they need to succeed,” she said. “I think ARPA will give us the opportunity to fund programming that will help. I also think that we need to be thoughtful and strategic. I’ve been looking into what other cities are doing to ensure that equity is a part of these programs. That might mean tailoring programs to target populations. The Evers Administration has tried to do that with their program aimed at the minority chambers of commerce.

Rosenberg said she views those efforts through both an external world and internal city policy lens.

“When I look at the staffing needs we’re seeing for the city, many of the affected departments have a certain demographic,” Rosenberg said. “Other cities have been working on apprentice programs that introduce more diverse populations to positions and train them in the skills they need to succeed. That’s something we as a city could work towards so we’re creating a pipeline to good jobs and benefits for more people.”

In November, the city applied for millions in grant funding that includes $11.7 million for redevelopment of the former Wausau Center mall. The Neighborhood Investment Fund grant program, announced by Gov. Tony Evers in August, aims to help communities deliver innovative public services including new or improved facilities. Wausau could apply for up to $15 million in grant funding to target housing, child care, transit solutions and increased access to healthcare in specific Census tracts impacted by the pandemic.

The city’s application included $10.5 million earmarked to construct a pedestrian bridge, a move that prompted significant criticism and more than a dozen letters submitted to the state from residents opposed to the way the funds would be used. The program is funded through the American Rescue Plan Act.

Disparity is expected to increase significantly due to the pandemic’s fallout, economists say

“Inequality was bad and the COVID-19 pandemic is making it worse,” said Zia Qureshi, of the Brookings Institute. “The immediate priority is to protect the disadvantaged and the vulnerable from the health and economic impacts of the crisis. But policies must also address the deeper, structural drivers of the rise in inequality.”

Kelch, who works with disadvantaged people daily, said the COVID-19 pandemic hit landlords especially hard and they are following through with evictions. Renters, too, are struggling to bounce back from higher rents in the area.

“We are getting more requests for clothing and food, as well as rental assistance,” Kelch said.”There are jobs available, but for those who were devastated by COVID, it is nearly impossible for them to catch up. Families have even more limited options for shelters and most in the area are reporting full when we call.  The lack of affordable housing that has long been an issue in Wausau is rearing its ugly heard and it is no longer easily or quickly solved.” 

The first order of business is to contain the pandemic and address its immediate health and economic consequences that disproportionately hurt the less well-off, Quereshi said. After that happens, Quereshi suggests that solutions can be policy-driven at the federal, state and local level – from reimagining public-private partnerships to addressing gaps in pay, education and technology.

As the U.S. rebounds from the economic impact of the COVID-19 pandemic, a new analysis from PRB suggests that millions of working families could recover at a slower pace because of rising income inequality and limited opportunities for higher paying jobs. That recovery could be especially difficult for workers in low-wage service and support occupations that shed jobs at higher rates than the national average during the pandemic.

That matters because the relationship between childhood family income and life outcomes is well established. A child’s family’s income relative to the household income of other families makes a difference for that child’s future adult-income rank as well, according to research by Raj Chetty of Harvard and his colleagues. In addition, a large and growing body of evidence, recently reviewed by Katharine Bradbury and Robert Triest of the Federal Reserve Bank of Boston, directly connects inequality of outcomes to inequality of opportunity.

Kelch said Wausau as a whole needs to be proactive and creative in finding solutions. 

“For immediate shelters, we have empty buildings all over the city,” Kelch said. “Other communities have utilized buildings as emergency, temporary shelters for families. Transportation to jobs outside the city proper would be a great benefit to helping struggling families. Affordable daycare programs can also help get struggling families and single moms back to work.”

Mayor Rosenberg said having strong school systems is critical to keeping young people competitive in their future endeavors. She also pointed to a longer-range transit plan as a necessary step in addressing income inequality in Wausau.

“I heard from a business this week who really wants to employ one of our new refugees but the bus system doesn’t meet that need and this person doesn’t have a drivers license or car yet,” Rosenberg said. “Connecting people to the places they need to go is something we can shore up as a policy initiative.”

Rosenberg said she can also imagine a world “where we work on microbusinesses and building entrepreneurship in communities that didn’t always find that opportunity available to them.” Affordable housing is also key, she said.

“We really have the opportunity to make a big impact with ARPA and infrastructure funds,” she said. “We’ll just have to ensure the policy priorities are there to meet this need.”

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