Michigan posts its largest income gain since the recession

Michigan's economy posted some good news today: three consecutive years of rising income, two years of falling poverty rates and lower than national rates of the uninsured population, according to newly released Census Bureau data.

Median household incomes in the state rose by 2.4% — the largest annual gain since the recession — to $51,084 last year. Michigan’s rate of uninsured people declined by 2.4 percentage points to 6.1%, well below the national rate of 9.4%.

"It has been a slow and more or less steady recovery — it has not been a gangbusters recovery," said Charles Ballard, economics professor at Michigan State University.

Despite the gains, Michigan’s median household income remains below pre-recessionary levels.

Michigan is one of 23 states where poverty rates declined between 2014 and 2015. The percentage of Michigan residents living in poverty decreased by 0.4 percentage points to 15.8% and remained about the same for children, at 22.4%. The U.S. rate also declined for the second year in a row by 0.8 percentage points to 14.7% for individuals and 20.7% for children, according to census data.

Why has the recovery been so slow?  In Michigan, there are more jobs than before the recession, yet fewer jobs than in 2000. Michigan lost 860,000 jobs between April 2000 and March 2010, according to Bureau of Labor Statistics data. "The Michigan economy is bigger than it's ever been." says Ballard, "In terms of employment, we are still not back to the all-time peak of 2000 but in turns of real GDP we are bigger than ever."

While the auto rescue and rebounding auto sales have played an important role in Michigan's recovery, economist Gary Burtless of the Brookings Institution describes the job market many Michiganders have come to know following a recession, companies "are not adding nearly as many bodies to the payroll as the numbers that they trimmed," he said.

Census data released today are for communities with 65,000 or more residents.

Metro Detroit poverty rates remained flat at 16.1%, while median household income increased by 2.1% to $53,628 last year.

Flint and Detroit continue to have some of the highest poverty rates in the U.S. at 40.8% and 39.8%, respectively.  The child poverty rate is higher — more than half of the children who lived in Detroit and Flint last year lived in poverty, 57.6% and 58.3%, respectively.

Ballard said: "Most people are back to work. There is finally some movement in wages."

But it depends on where you live. "If you're in Ann Arbor, if you're in parts of the Grand Rapids area, if you're in Bloomfield, you are not looking at a recession, but if you're in some of the central cities or in some of the rural areas, those are the places that have not shared in the prosperity — they may be doing better than they were five years ago, but there is still a sense of struggle," he said.

(2016 © Detroit Free Press)


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