Incomes climb in Michigan, but state still struggles with loss of manufacturing

Make no mistake: Michigan’s economy is doing well, but the days of leading the nation in weekly paychecks are long over.

The state’s workers once made substantially more than the average American household (6 percent more in 2000). Now, the median household income is 4 percent less than that of the nation, $60,449 in Michigan in 2018 compared to $63,179 nationwide.

The cause: the loss of nearly 300,000 manufacturing jobs, many well-paying. And the jobs that have been created have largely been in the service sector and pay just over two-thirds, on average, what a factory job pays. 

(The numbers are from before the coronavirus pandemic, which prompted more than 2 million residents to file for temporary unemployment benefits, but also caused personal incomes to spike because of federal stimulus payments."

Michigan is still a strong union state, with 658,000 people belonging to a local. But it’s becoming less so: The percentage of union members has fallen from nearly 20 percent of the workforce in 2008 to 14.5 percent in 2018 (compared to 10.5 percent nationwide), according to the Bureau of Labor Statistics.

The wage gap among genders in Michigan is just as profound as the nation: Women’s median weekly pay was $725 in 2017, compared to $928 for men. 

Still, Michigan incomes are growing. Total statewide personal income grew to $505 billion in 2019, up from $424 billion in 2015, while per capita income jumped to $46,055 in 2017 from $42,812.

Uneven wages, poverty

The economy isn’t lifting all people evenly.

Median annual earnings among minorities still lag, at $25,765 in 2018 for African Americans and $27,212 for Hispanics compared to $32,206 for all residents statewide. Since 2012, poverty rates have declined to 27.6 percent from 36 percent for African Americans and 19.7 percent from 29.4 percent for Hispanics. (The state average is 14.1 percent)

In Detroit and Flint, more than half of children under 18  and more than a third of all residents live in poverty. Median household income in Flint was $26,330 and $$27,838 for Detroit in 2018, according to the U.S. Census. 

In other parts of the state, median household incomes are far higher, like in Ann Arbor ($61,247), Grand Rapids ($44,369), Okemos ($74,568), Midland ($61,076) and in Metro Detroit suburbs like Northville ($107,500) and Warren ($45,611.) 

Again, education is a factor: In Okemos and Ann Arbor, more than 70 percent of adults have a college degrees. But in Detroit just 14.2 percent of adults have a college degree, while 12 percent do in Flint.