MADISON—Traditionally well above the national average, Wisconsin median household income ($44,650) fell below the national median ($46,326) in 2005 for the first time since 1985, according to the Wisconsin Taxpayers Alliance (WISTAX). Median household income is the level at which half the households in a given area have a higher income and half have a lower income.

The WISTAX study, "Wisconsin’s Eroding Household Income," reports on Wisconsin income trends based on figures from the U.S. Census Bureau. From 1999 to 2005, Wisconsin’s median household income fell 2.2% from $45,667 to $44,650, while the national median rose 13.8% from $40,696 to $46,326. Wisconsin ranked 50th in the nation in household income growth during the period; only Michigan (-0.3%) joined Wisconsin with a decrease in median income. As a result, for the first time in 20 years, Wisconsin’s median household income was less than the national median.

According to WISTAX, a number of factors have contributed to the change in Wisconsin household income. One is a drop in average household size. While state population grew 4.0% from 2000 to 2005, the number of households increased 7.5%. Additionally, from 2000 to 2005, the share of households in Wisconsin occupied by just one person rose from 26.8% to 28.6%.

Another factor is a drop in female participation in the labor force. Traditionally, married couples in Wisconsin have been more likely than those in most states to have two working spouses. In recent years, the state’s edge in this measure has slipped. In 2000, both spouses worked in 59.5% of married couple families in Wisconsin, 8.2 percentage points above the national average of 51.3%. Over the next five years, Wisconsin’s percentage fell to 58.8%, while the U.S. share rose to 52.1%, shrinking the difference to 6.7 points.

As a result of these factors, Wisconsin had the largest drop in workers per household in the nation. From 2000 to 2005, Wisconsin’s workers per household fell 6.9% from 1.40 to 1.31; the national average dropped 1.5% from 1.30 to 1.28. With fewer multiple-income homes, household income has been affected.

WISTAX illustrates Wisconsin’s household income difficulties by comparing the Badger State to Minnesota. For most of the 1980’s and 1990’s, median household income in the two states tracked to one another. In 1999, Minnesota’s median income was 3.0% above Wisconsin; in 2005, the gap was 21.4%. While Wisconsin’s household income was stagnant or falling, Minnesota’s rose 15.3% over the period.