Michigan’s Downward Economic Spiral Has It on Track To Become the Third-Poorest State in America in 20 Years

‘Most alarming is that if each state’s personal income per capita grew over the next 23 years at the same rate as between 1999 and 2022, Michigan would end up as the 48th poorest state in the country by 2045,’ the researchers write.

J.D. Pooley/Getty Images
The General Motors world headquarters is seen February 24, 2013 in Detroit, Michigan. J.D. Pooley/Getty Images

A new report finds that Michigan is on track to become the 48th poorest state in the union if the state keeps on the trajectory it was on between 1999 and 2022.

Researchers Lou Glazer and Donal Grimes of Michigan Future Inc. and the University of Michigan determine in a new report that the state is on track to outpace only Mississippi and Alabama in terms of personal income per capita in the next 21 years.

The study found that between 1999 and 2022, real personal income in the state grew by just $11,095 on average in the state compared to $19,389 over the same time period across the entire United States.

“Most alarming is that if each state’s personal income per capita grew over the next 23 years at the same rate as between 1999 and 2022, Michigan would end up as the 48th poorest state in the country by 2045,” the authors wrote.

As of 2022, the year data for the report end, the state ranked 39th in terms of personal income per capita, the lowest ranking the state has held since data started being collected in 1929.

The researchers contrasted Michigan’s current standing to the relatively high-rank Michigan enjoyed in 1999 when it had the 16th highest average personal income per capita in the country.

The researchers do not, however, attribute Michigan’s decline principally to problems in America’s auto industry. Rather, they say that the state has slid because it’s been unable to develop industries to attract Americans with college degrees.

The researchers wrote “the relatively slow growth in earnings in the high-wage, high-education attainment industries explain a larger share of Michigan’s relatively poor growth in personal income per capita between 1999 and 2022 than the decline in earnings in motor vehicles, machinery, and fabricated metals manufacturing.”

The researchers identified high concentrations of 25- to 34-year-olds with a bachelor’s degree as key drivers of economic growth in the modern economy, and noted that Michigan has relatively few people in this demographic.

They noted that between 1999 and 2022, growth in real earnings among highly educated employees in the state grew by only 18 percent. In America, those same earnings grew by 44 percent.

The report described the decline in American auto manufacturing as a secondary cause of the state’s lackluster growth in personal income.

The proportion of total income that auto manufacturing wages represent in Michigan declined to 7.9 percent in 2022 from 15.5 percent in 1999, according to the report. Per capita earnings in the auto manufacturing sector declined by 46 percent over the same period.

The report comes as Michigan finds itself in the center of the 2024 presidential campaign, with both candidates hoping to appeal to voters in a state roiled by economic decline over recent decades.

President Biden has focused on a labor-centric strategy in Michigan, gaining the endorsement of the United Auto Workers and other unions. He’s also recently traveled to the state’s premier bellwether county, Saginaw County, in an attempt to court Black voters, union households, and college-age voters.

President Trump has focused his efforts in Michigan on what he calls “Biden’s Border Bloodbath.” Mr. Trump also spoke to a crowd of employees at a non-union auto manufacturing plant during the UAW strike last year.

The New York Sun

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