Census: Michigan household income drop among nation’s worst. Blame inflation

• Adjusted for inflation, household income dropped 3% in Michigan from 2019 to 2023
• That is the 15th worst among states in the nation, whose median income dropped 1% over that time
• Median earnings in Michigan increased 2%. Women and those with less education had the biggest gains

Inflation and higher costs for groceries and housing have erased household income gains in Michigan and nationwide since the pandemic, the latest data from the U.S. Census Bureau shows.

Median household income in Michigan fell to $69,183 in 2023, down 3% from the inflation-adjusted income in 2019, which was $71,322 in 2023 dollars. 

The decline was the 15th worst among states in the nation.

Nationally, the median household income fell 1% over that time to $77,719, as 30 of 50 states recorded declines, according to data released Thursday from the 2023 American Community Survey. 

While inflation is decreasing and other measures of the economy are improving, prices remain high and are rising, though more slowly. The economy is the No. 1 issue for both Republican and Democratic voters, polls show.

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“You hear that (positive economic news), but on a practical, real-life level, I don't see it or feel it,” said Lindsey Thurlow, 34, of Freeland, who is in between jobs and helps her mother with a silk flowers shop near Saginaw. 

“It's a do-whatever-you-got-to-do-to-make-ends-meet kind of lifestyle right now,” Thurlow added.

The latest data adds to a jumble of sometimes contradictory economic indicators. 

The Census figures come one day after the federal government reported that inflation eased to 2.5% in August, down from a four-decade high of 9.1% in June 2022. 

Most economists view 2% inflation as healthy, and even the Census figures had some encouraging news.

While income for households — or families — fell, median earnings for workers in Michigan rose a hair. It was up 2% since 2019 when adjusted for inflation. 

Also posting gains: income for women (6%) and those with the least education (15%).

But a gender gap remains: median earnings for men in Michigan were $58,236, nearly $20,000 higher than women’s $38,458.

Earnings fell the most for those with professional degrees, down nearly 5%, when adjusted for inflation. 

Still, their median earnings of $85,733 was $20,000 higher than college grades and more than double a high school graduate’s median.

Kitchen-table concerns

Even with the positive signs, families’ kitchen-table fears are well-founded, economist Don Grimes said.

“There’s a real concern that voters have with their financial situation,” said Grimes, a senior forecasting analyst for the University of Michigan’s Research Seminar in Quantitative Economics.  “I think (the worries are) even more profound than the data shows.”

Grimes said inflation statistics don’t take into account high interest rates, which make borrowing money more expensive for most families.

The average rate on a 30-year mortgage recently fell to a 19-month low to about 6%. That’s still nearly double what it was just before the pandemic.

Credit card rates exceed 21%, well above the pre-pandemic rate of 15%. Social Security cost-of-living increases of 14.8% have not kept up with the 19.7% increase in inflation from 2019 to 2023.

Families are “just getting squeezed so much,” Grimes said.

Political implications

Bernie Porn, a pollster with EPIC/MRA in Lansing, said voters say the economy is a driving issue in this fall’s elections.

“People are  still concerned about the price of groceries and the price of gasoline,” Porn said.

Richard Czuba, another pollster who works with Michigan media outlets, said the economy is by far the top concern of voters. Even so, a majority of respondents, 57.5%, say they are satisfied with their financial position, Czuba said.

Many others, especially those at the bottom of the education ladder, worry about their next meal, he said.

“For those who are most dissatisfied with their position, 20% of them are worried about paying for food,” Czuba said in an email exchange with Bridge Michigan. “But it is very much driven by non-college voters that are struggling.”

— Simon D. Schuster contributed