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Commentary: Door County’s Economic Reality

Like all of you, dear readers, I have a variety of pet peeves. The majority of my peeves are incidental and personal, but there are a few that have become obsessive irritations.

Chief among the latter category of peeves is the perception that most of us who live in Door County (particularly Northern Door County) are affluent. Visitors to the peninsula see all the boats in the harbors; the large, luxurious homes; the high-end automobiles; and the high property valuations, and they make an assumption of wealth. The economic reality on the peninsula is something very different.

The best data we have to know what taxpayers have available in their annual household budgets to pay their rent or mortgage, utilities, groceries and much more during a calendar year are the Adjusted Gross Income (AGI) reports from the Wisconsin Department of Revenue. Although these aren’t perfectly accurate numbers, they are still the best numbers we have without doing a very detailed survey or audit.

The table above shows the AGI from the 2017 tax returns for each community in Door County, along with the total AGI for the county. But before you start scanning through the table, a small math lesson is in order so you can fully understand what the table demonstrates.

There are three ways in which information in a data set can be averaged: mean, median and mode. Only the first two are important to the table.

For the sake of simplicity, let’s say we have five numbers: 10, 7, 5,  2 and 1. To get the mean average of these numbers, we total them and then divide the sum by the number of numbers in our set: 25 divided by 5 equals 5, so 5 is the mean average of the numbers in our set.

The median average of a set is the number that has an equal amount of data points above it and below it. So, in our sample number set, the median average is also 5 because 10 and 7 are above 5, and 2 and 1 are below 5.

In this scenario, the mean and median averages are the same, but what happens if we use these five numbers: 50, 47, 5, 2 and 1?

Using these numbers, the median average is still 5, but the mean average jumps to 21 (105 divided by 5)!

So now that you understand how these averaging methods differ, take a look at the table (whose population figures are estimates). In particular, look at Ephraim and Liberty Grove. In the case of Ephraim, there is a $50,519 difference between the mean and median averages. That median average means that 88 of the village’s 176 tax returns reported an AGI of less than $36,379. For Liberty Grove, the difference is $48,768, with 451 returns reporting an AGI of $31,249 or less.

Now take a look at the median figures for Sister Bay and the Town of Washington. In the case of Sister Bay, 401 returns reported an AGI of $28,776 or less. And in the case of the Town of Washington, 201 returns reported an AGI of $25,808 or less.

Lastly, take a look at the median AGI for the entire county, and note that 7,822 returns reported an AGI of $32,545 or less.

There are three main factors that contribute to these low AGIs. The first is obviously Door County’s short tourism season. Second is the disproportionate number of jobs we have in the hospitality and dining sectors, which are traditionally some of the lowest-earning sectors of industry (although Door County’s wages in both sectors outperform the state’s averages). And third is the large number of elderly in the county, mainly living on fixed incomes.

Here’s one final set of numbers to give you a frame of reference for the county’s AGI information: the federal HUD income limits for 2017, which are used to calculate eligibility for a wide assortment of federal assistance programs. In that year, HUD calculated a median income of $64,800 for Door County. For a two-person family, the low income limit was $41,500; the very low income limit was $25,950; and the extremely low income limit was $16,240. For a family of four, the low income limit was $51,850; the very low income limit was $32,400; and the extremely low income limit was $24,600.

So, as you can see from all of the above, contrary to perception and assumption, the majority of the peninsula’s full-time residents are people of very modest means at best. And this is the one fact that is overlooked more often than not when we seek to address the other issues facing our county.