To their credit both Governor Snyder and Business Leaders for Michigan have set high per capita income as one of the state’s economic goals. Far too many political and business leaders are fine with lots of low paying jobs as the goal.
I’m sure each would agree that the key to realizing that goal is increasing private sector employment earnings (both wages and employer paid benefits). The other categories of personal income are public sector employment earnings; interest, dividends and rent; and transfer payments. Michigan is 36th in private sector employment earnings per capita. Fifteen percent below the national average.
In our latest progress report for the first time we broke per capita income down into its component parts. The top 10 states in 2009 private sector employment earnings per capita are displayed in the table below.
|
State |
Private Sector Employment Earnings Per Capita |
% with four-year degrees or more |
% of per capita income from government revenue |
|
Connecticut |
$33,201 |
35.6% |
24.9% |
|
Massachusetts |
$33,100 |
38.2% |
25.6% |
|
New York |
$29,640 |
32.4% |
31.2% |
|
New Jersey |
$28,644 |
34.5% |
26.1% |
|
Colorado |
$26,682 |
35.9% |
23.5% |
|
Minnesota |
$26,668 |
34.9% |
27.4% |
|
Illinois |
$26,353 |
30.6% |
28.2% |
|
Delaware |
$26,012 |
28.7% |
28.9% |
|
New Hampshire |
$25,682 |
32.0% |
27.7% |
|
California |
$25,427 |
29.9% |
30.8% |
|
United States |
$23,427 |
27.9% |
31.2 |
These are the states Michigan needs to model itself after if we want to achieve Governor Snyder’s and Business Leaders for Michigan’s goal of higher per capita income. They have an economy that everyone wants for Michigan: high income largely from the private sector, with a low reliance on government revenue (both public sector employment earnings and government transfer payments) for their personal income. They are not low cost/small government/right to work states that we are told over and over again are the model for Michigan. So if those are not the common characteristics of the states where private sector employers value state’s citizens the most, what is?
- they are over-concentrated, compared with the nation, in the proportion of wages coming from knowledge-based sectors;
- they have a high proportion of adults with a four-year degree
- they have a big metropolitan area with even higher per capita income than the state; and
- in that big metropolitan area, the largest city has a high proportion of its residents with a four-year degree or more.
