Michigan’s per capita income is now “the lowest we’ve ever been,” putting the state on track to become the third poorest in the nation by 2045.
Recent data from the U.S. Bureau of Economic Analysis pegs Michigan’s per capita income – total income divided by the number of adult residents – at $61,144 in 2023.
The figure is dead last among Great Lakes states and 40th nationally, more than 12% below the national average of $69,815, Bridge Michigan reports.
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Since Gov. Gretchen Whitmer was re-elected in 2022, per capita income has reached “the lowest we’ve ever been,” Lou Glazer, president of the think tank Michigan Future Inc., told the news site.
He attributed the “enormous collapse” to a lack of high-wage jobs, a perspective shared by Citizens Research Council of Michigan Senior Research Associate Bob Schneider.
“Generally, high-wage employment goes to those with a lot of education and skills,” Schneider said, adding the way to change the dynamic “would be to improve the skills of your workforce.”
Glazer penned a report with University of Michigan economist Donald Grimes earlier this year that predicted the consequences of inaction, noting Michigan is on track to become the 48th poorest state if nothing changes over the next couple decades.
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The study showed while national net earnings increased by more than $9,124 per capita between 1999 and 2022, Michigan’s increased a mere $2,308, and predicted if that trend continued at the same rate, Michiganders would be poorer than all but the residents of Alabama and Mississippi by 2045.
“Even if every state’s income per capita grew at the same rate as it did between 2012 and 2022 – a relatively good decade for Michigan – Michigan would rank 34th in 2045, which is where we ranked in 2019,” the report read. “Michigan needs to change if it wants to be a relatively prosperous state again.”
Despite the obvious, depressing trend, the Whitmer administration continues to insist the state is on the road to prosperity, pointing to massive taxpayer funded incentives to the electric vehicle industry and others, increased spending on brownfield developments, and hundreds of millions in federal funding as major accomplishments.
“We are seeing signs of progress,” Whitmer spokeswoman Stacey LaRouche told Bridge.
Data from the U.S. Census Bureau’s 2023 American Community Survey shows inflation adjusted household income in Michigan has tanked 3% since Whitmer took office, despite a 2% increase in median earnings.
As median household income nationwide declined 1% from 2019 to 2023 to $77,719, the measure in Michigan was down 3% to $69,183, a decline that outpaced all but 14 states.
“There’s a real concern that voters have with their financial situation,” Grimes told Bridge Michigan. “I think (the worries are) even more profound than the data shows.”
Grimes points to interest rates not included in inflation statistics that remain nearly double for a 30-year mortgage than the rate before the pandemic, as well as higher rates for credit cards and Social Security cost-of-living increases that have not kept pace with the 19.7% inflation between 2019 and 2023.
The situation translates into about 200,000 more Michiganders struggling to afford a survival budget that covers basics like housing, child care, food, transportation and health care in 2022 than when Whitmer took office, according to a United for ALICE report.
A staggering 41% of Michiganders now live paycheck to paycheck, up from 38% in 2019, though it’s more than half in 11 counties and between 65% and 79% in many metro Detroit communities. In Detroit, Michigan’s largest city, 69% of residents cannot afford to live. It’s even worse for minorities.
Michigan’s deteriorating economic situation is also a major driver of the state’s accelerating population exodus, according to a report from Whitmer’s Growing Michigan Together Council.
The most recent data from the American Community Survey released last week shows more than twice as many moved out of the state on a net basis last year than in 2022, boosting the net migration to negative 45,141 over the last three years.
The vast majority of those fleeing the Great Lakes State went to right to work states including Florida, Texas, Arizona, North Carolina, Kentucky, Georgia, Arkansas, Tennessee, and Nevada.
Michigan became the first state in 48 years to repeal its right to work law in 2023, a move Whitmer said would “grow Michigan’s middle class.”
Others disagree, arguing the change will only make matters worse.
“Outbound migration will continue to be an issue, and I suspect accelerate unless our state makes an about-face in its policy choices,” Michael LaFaive, senior director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy, told The Midwesterner, specifically citing the right to work repeal and other policies from Democrats that have driven up costs for Michiganders.
“Economics 101 tells us if you raise the price of anything less will be demanded of it,” he said. “So, if lawmakers raise the cost of living, working, and creating jobs, we’ll get less living in Michigan, fewer jobs, and less wealth too.”
The real solution, Davidson Republican state Rep. David Martin told Bridge, is to “get state government out of the way of our economy, making it easier for businesses to invest in Michigan and create high-paying careers right here in our communities.”