New report: the metro Detroit economy
As bad as the Michigan economy was from 2001-2010, the nine county Detroit regional economy was worse. As the epicenter of the domestic auto industry, the region suffered most from the near collapse of the Detroit Three.
Employment and Wages
In 2010 there were 1.996 million jobs in metro Detroit, a decline of 454,000––an unprecedented 18.5%–– from 2001. Just like the nation, underneath the terrible jobs record of the decade is the continuing divergence between the high and the low education attainment sectors. Metro Detroit employment in the high education attainment was 917,000 in 2010, a decline of 72,000 jobs (-7.3%) from 2001. In the low education attainment sectors employment was 1.079 million in 2010, a staggering decline of 382,000 jobs (-26.1%) from 2001. The loss of jobs in the knowledge-based industries we believe is due in large part to the decline in employment in the knowledge-based portions of the domestic auto industry. In health care and education––where the national high education attainment job growth was concentrated–– job growth in metro Detroit was around 26,000, an increase of 6.4% between 2001 and 2010.
The average wage in metro Detroit followed the same pattern as the nation: high education attainment industries growing and low education attainment industries declining. The average wage for all jobs in the Detroit region in 2010 was $48,792, a decline of 0.9% from 2001. In the high education attainment sectors the average wage was $60,831, a gain of 3.5%. In the low education attainment sectors the average wage was $38,562, a decline of 9.9% from 2001.
The gap in the average wage between the high and low education attainment sectors grew from $15,980 in 2001 to $22,269. In 2010 the average worker in the high education attainment sectors had wages a little less than 1.6 times that of the average worker in the low education attainment sectors. Metro Detroit’s average wage in 2010 was 11.0% above the nation in the low education attainment industries. By comparison in the high education attainment industries, metro Detroit’s average wage in 2010 was 2.0 percent below the national average.
Per capita income in metro Detroit in 2010 was $37,398, a loss of $2.137 (-5.4%) from 2001. But, even more so than for the nation, the underlying sources of region’s personal income is very worrisome, with a huge decline of real private sector employment earnings per capita from 2001 – 2010 masked by the large income gains from government––either government employment earnings or, most importantly, transfer payments.
- Private sector employment earnings per capita in 2010 was $23,071 a loss of $5,534(-19.3 %) from 2001
- Government employment earnings per capita in 2010 was $4,215 a gain of $609 (16.9%) from 2001.
- Personal income per capita from interest, dividends and rent was $6,085, a loss of $953 (-15.3%) from 2001.
- Transfer payments per capita in 2010 were $8,384, a gain of $3,228 from 2001 (62.6%).
The dramatic growth in transfer payments was accompanied by a sharp increase in the share of the population who were poor or nearly poor. In 1999, 17.1% of the metro Detroit population had an income that was less than 1.5 times the poverty level. By 2010, this value had increased to 25.8%. Metro Detroit has become increasingly poor and more dependent upon transfer income, not a good start to the 21st Century.
How metro Detroit in 2010 compared to the country (Note: the rankings are out of 54 metros with populations of one million or more.)
- Proportion of wages from high education attainment industries: 34th/98.1% of US
- Average wage: 16th/104.4% of US
- Average wage in high education attainment industries: 21st/98.0% of US
- Average wage in low education attainment industries: 5th/111.0% of US
- Proportion of adults with a four year degree: 35th/98.9% of US
- Households with income 1.5 times the poverty rate or less: 40th/103.2% of US
- Households with income 4 times the poverty rate or more: 28th/101.1% of US
- Per capita income: 38th/93.6% of US
- Private sector employment earnings per capita: 34th/97.3% of US
- Government employment earnings per capita: 38th/79.4% of US
- Interest, dividends and rent per capita: 32nd/78.6% of US
- Transfer payments per capita: 6th/113.1% of US