Wisconsin Statistics Regarding Income and Inflation

Tuesday, May 17th, 2022 -- 9:01 AM

The U.S. economy is now a full year into a historic run of inflation.

Year-over-year price increases in the Consumer Price Index have topped 5% in every month since May 2021, peaking at 8.5% in March. While the Federal Reserve has begun to raise interest rates to cool the economy, supply chain challenges and strong consumer demand throughout the pandemic have sent inflation to its highest levels in four decades.

While countless headlines over the last year have invoked widespread concerns about inflation, not every household experiences rising prices in the same way. For example, homeowners who bought before the pandemic have been spared from spiking prices for housing costs, while remote workers have been less susceptible to rising costs for vehicles and gasoline.

And amid a tight labor market and the Great Resignation, many workers have seen their wage gains outpace the rate of inflation, but for those who haven’t, rising prices have effectively given them a pay cut.

Even before the current run of inflation, many workers were already in a challenging position due to relatively slow wage growth relative to prices over the last decade. Average hourly earnings showed year-over-year growth of between 2% and 3% for most of the decade before the pandemic, falling behind the rate of growth in the CPI at several points.

And over this period, higher earners, who may already be better equipped to withstand rising prices, saw their wages grow significantly faster than lower earners. The data used in this analysis is from the U.S. Bureau of Economic Analysis’ Real Personal Income tables.

To determine the locations where incomes have struggled to keep pace with inflation, researchers at LLC.org calculated the percentage change in real per capita income between 2010 and 2020, with lower values being ranked higher. All values shown are inflation-adjusted to 2020 dollars.

The analysis found that over the last decade, Wisconsin experienced a 24.2% increase in per capita income, a total increase of $11,673. Here is a summary of the data for Wisconsin:

• 2020 per capita income: $59,842;
• 2010 per capita income: $48,169.

For reference, here are the statistics for the entire United States:

• Percentage change in per capita income (2010–2020): +25.9%;
• Total change in per capita income (2010–2020): +$12,244;
• 2020 per capita income: $59,515;
• 2010 per capita income: $47,271.

For more information, a detailed methodology, and complete results, you can find the original report on LLC.org’s website: https://www.llc.org/cities-struggle-income-inflation

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