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How residents of metro Grand Rapids earn their income

We continue our look at the components of income data from our new annual report with how residents of metro Grand Rapids earn their income. We use the broadest definition of the region which includes seven counties: Allegan, Barry, Ionia, Kent, Muskegon, Newaygo and Ottawa.

Per capita income for metro Grand Rapids in 2009 was $31,637. By major components it was:

  • Private sector employment earnings        $20,396
  • Government employment earnings          $2,877
  • Dividends, Interest, Rent                          $4,887
  • Transfer payments                                   $6,355

We also looked at per capita income growth between 1989 and 2009 corrected for inflation. Over that 20 year period real per capita income grew by $3,700. An increase of 13 percent. By component the twenty year growth was:

  • Private sector employment earnings        $889
  • Government employment earnings          $440
  • Dividends, Interest, Rent                          -$55
  • Transfer payments                                    $2,994

As you can see, transfer payments account for a large proportion (81 percent) of metro Grand Rapids’ real personal income growth over the past two decades. The other obvious highlight (really lowlight) is small real growth (less than 5 percent) over two decades in private sector employment earnings. Both of these trends need to change if metro Grand Rapids is going to be a high prosperity region.

In 2009 73 percent of metro Grand Rapids’ personal income came from employment earnings (64 percent from private employers and nine percent from government employers.) Transfer payments were 20 percent. And if you combine transfer payments and government employment earnings, you find that 29 percent of the region’s personal income is paid for with government revenue. Twenty years earlier employment earnings were 79 percent of personal income (70 percent from private employers and nine percent from government employers.) Transfer payments were 12 percent. And personal income paid for with government revenue was 21 percent.

How does metro Grand Rapids compare to the US? Not well! Particularly when you take into account that big metros on average are doing far better than the nation. The region’s per capita income is now $7,959 (twenty percent) below the national average. Over the past two decades the region’s real per capita income grew $4,097 slower than the nation. Less than half the growth the country experienced. By component compared to the nation the 2009 levels and 20 year growth were:

  • Private sector employment earnings        -$2,931/-$2,624
  • Government employment earnings          -$2,346/-$482
  • Dividends, Interest, Rent                          -$2,256/-$755
  • Transfer payments                                    -$629/-$111
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