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Income inequality is surging, and there are few countries where it is rising faster than the United States. The distance between rich and poor is greater in America than nearly all other developed countries, making the US a leader in a trend that economists warn has dire consequences. GlobalPost sets out on a reporting journey to get at the ‘ground truth’ of inequality through the lenses of education, race, immigration, health care, government, labor and natural resources. The hope is to hold a mirror up to the US to see how it compares to countries around the world.
Sheboygan, Wisconsin has one of the most even distributions of income in the US, but the middle class now fights to preserve its prosperity.
Comparing the Divide: Middlesbrough, England and Sheboygan, Wisconsin both built thriving middle classes over decades of successful manufacturing. In the United Kingdom, income inequality is climbing and threatens to return places like Middlesbrough to an Dickensian age of "haves" and "have-nots." Sheboygan, with an income inequality level slightly higher than England's, is proving resilient to a similar trend of middle class erosion across the United States.
SHEBOYGAN, Wisconsin — Lake Michigan was wide and blue and a little menacing in the distance as a hard wind chopped at the lake off the breakwater near the mouth of the Sheboygan River.
But inside the harbor, where wind and waves were blunted by land, Kristopher Panick, a laid-off construction worker, found his ice fishing spot. He knelt over a hole he’d bored through six inches of ice, dropped a line baited with a silver minnow, stood and then cracked open a freezing beer.
Winter is quiet for roofers and siders in Sheboygan, and this winter has been quieter than most. Panick, 35, wearing glasses and a couple layers of hooded sweatshirts, has no health insurance and lives paycheck to paycheck. He draws on unemployment when he must.
“Lately it’s been hard to come by work,” he said. “I’ve never seen it so slow.”
“It’s these strong, family-owned businesses that really can look beyond quarter to quarter.”~Dave Sachse
Panick’s small refuge, a patch of ice atop the dark, frigid water of a Great Lake, is a bit like Sheboygan itself. The town of 50,000 is a spot of relative economic calm and security amid a cold, forbidding economic landscape in America, where the income gap is growing and the middle class is shrinking. Just halfway up the west coast of Lake Michigan, the dream of a prosperous and growing American middle class has somehow survived.
In 2010, Sheboygan County had the most even distribution of wealth for a metropolitan area in the United States, according to a formula for income inequality developed by Italian economist Corrado Gini. Sheboygan County, it turns out, is on par internationally with European countries like the United Kingdom. And in this part of GlobalPost’s ongoing series, The Great Divide, we set out to compare Sheboygan with Middlesbrough, an English industrial town on the North Sea about an hour south of Newcastle. They share an industrial past, a hardworking people and an anxious middle class hanging on even as the ground shifts beneath it.
Sheboygan has a few advantages in preserving its ideal self as a Midwestern middle class archetype. It’s small. It also has a booming food industry that economists say is largely resistant to recession. And Sheboygan’s middle class depends on at least one other force: The private business empires that dominate the regional economy.
Names like Kohler, Vollrath, Stayer, Gentine, Sartori, Bemis and Brotz carry weight in Sheboygan County, because those families built companies that have provided jobs and sustained the towns of Plymouth, Sheboygan Falls and Sheboygan. These businesses are all private, often run by the descendants of founders.
Kristopher Panick, 35, in Sheboygan, Wisconsin.
The families who founded Kohler Company, Sargento Foods and Johnsonville Sausage don’t have to answer to shareholders or pay dividends. They build golf courses and marinas, art museums and shopping centers and they spend money on their businesses.
“It’s these strong, family-owned businesses that really can look beyond quarter to quarter, that really look down the road,” said Dave Sachse, a native of Sheboygan and serial industrialist who now owns a company called Nutrients, Inc., which makes vinegar. “Most of these guys who ran those places were very benevolent to the community.”
Corrado Gini figured out a way to measure income distribution across a population so that a score of zero indicates perfect income equality and a score of one means perfect inequality. The U.S. average is about .450, and Sheboygan County’s index is .390, the best of all US metro areas in 2010. Four of the ten most equal cities in the United States by this measure are in Wisconsin, including Appleton, Wausau and Janesville.
The question, of course, is how long this will last. Company towns run by family companies have suffered across the Midwest for decades. Views within a family shift, or ownership changes hands. Sheboygan County may always have its benevolent oligarchy, but how long will it have its middle class?
The county is equitable by American standards, but the best Gini score in the US is still almost twice as high as the national average in Sweden. America has been growing less equal since World War II, according to the US Census Bureau.