We continue our look at the components of income data from our new annual report with how metro Detroiters earn their income. We use the broadest definition of the region which includes nine counties: Genesee, Lapeer, Livingston, Macomb, Monroe, Oakland, St.Clair, Washtenaw and Wayne
Per capita income for metro Detroit in 2009 was $37,083. By major components it was:
- Private sector employment earnings $22,723
- Government employment earnings $4,103
- Dividends, Interest, Rent $5,938
- Transfer payments $7,783
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 $3,747. An increase of 11 percent. By component the twenty year growth was:
- Private sector employment earnings -$542
- Government employment earnings $730
- Dividends, Interest, Rent -$104
- Transfer payments $3,727
As you can see, transfer payments account for virtually all of metro Detroit’s real personal income growth over the past two decades. The other obvious highlight (really lowlight) is no real growth over two decades in private sector employment earnings. Both of these trends need to change if metro Detroit is ever again going to be a high prosperity region.
In 2009 72 percent of metro Detroit’s personal income came from employment earnings (61 percent from private employers and 11 percent from government employers.) Transfer payments were 21 percent. And if you combine transfer payments and government employment earnings, you find that 32 percent of the region’s personal income is paid for with government revenue. Twenty years earlier employment earnings were 80 percent of personal income (70 percent from private employers and 10 percent from government employers.) Transfer payments were 12 percent. And personal income paid for with government revenue was 22 percent.
How does metro Detroit 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 $2,552 (6 percent) below the national average. Over the past two decades the region’s real per capita income grew $4,050 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 -$604/-$4,055
- Government employment earnings -$1,130/-$192
- Dividends, Interest, Rent -$1,205/-$824
- Transfer payments $799/$622
One final note: metro Detroit is not a big government region. Wasn’t twenty years ago, isn’t today. In fact one can make a better case that it is a small government region. Government employment earnings for the region are 78 percent of the nation’s.