We are now a poor state

The reality is, whether we are willing to admit it or not, Michigan is now one of the country’s poorest states. That is the unambiguous message of the table below. It shows Michigan’s rank among the 50 states plus D.C. The left hand column is per capita income, the right per capita income minus government transfer payments.

Michigan has not bounced back from the so-called lost decade or one state recession. What has happened during the now four year recovery is Michigan has stopped falling. We have stabilized in the high 30s in per capita income and the low 40s in per capita income minus transfer payments.

The only states lower than us in per capita income minus transfer payments are: • Arizona • Idaho • Arkansas • Alabama • New Mexico • South Carolina • Kentucky • West Virginia • Mississippi

The decline has been impervious to which party has been in control in either Lansing or D.C. Michigan’s rapid fall from one of the country’s most prosperous state––a status we enjoyed for most of the 20th Century––to one of its poorest has occurred during a period when both parties have occupied the Governor’s office and Presidency.

The main driver that made us one of the 20th Century’s most prosperous states––lots of high paid auto factory jobs––is gone forever. The path back to prosperity for Michigan starts with all of us learning the lesson that what made us prosperous in the past, won’t in the future.

 

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Lou Glazer

Lou Glazer is President and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future’s mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. Its work is funded by Michigan foundations.

This Post Has 5 Comments

  1. It seems like once we are in the hole we are now in, it becomes ever more difficult to dig ourselves out. I know Michigans Future strongly believes that increasing the percentage of educated, skilled workers is one of the main ways to regain prosperity. But once we get in a hole like we are now in, it becomes more and more difficult. I have noticed than large numbers of Michigan’s college students leave the state after obtaining a degree. I am still glad we are educating them and wish them success wherever they go. But we somehow have to retain more of them if the state is to reap any benefit.

    1. Agree that it is hard. But others have turned around. We should be able to as well. Leaving as we have written frequently has a lot to do with not having the kind of vibrant central cities young professionals are looking for. This is something many other regions and states have made a priority. We haven’t. And we also have not made rigorous student achievement standards a priority like other states have. This is doable too.

  2. “Lots of high-paying, auto industry jobs” came hand-in-hand with an oligopolistic business model that was extremely inflexible when confronted with international competition. I hope that economic, policy and business planners have learned that lesson. Being a “right to work” state ensures more flexibility in human resources. The reset button has been pushed in Detroit, so Michigan has a chance for its to become a vibrant urban center once more. Please renovate your blogsite a bit to facilitate posting of your blogs on Twitter and other social media.

    1. In the next few posts I take a more in depth look at why we are a poor state. Including a look at our analysis and predictions in our 2006 A New Agenda for a New Michigan report. We stated then that lots of high paid auto job were not sustainable. And argued that the path back to prosperity required us to move away from a factory-based to a knowledge-based economy. That transition is still required. And right to work is unlikely to have much if anything to do with making that transition. Hardly any of the high per capita income states–-except for the oil and gas rich states––are right to work. What they are is high in eduction attainment. That was the priority for the state in 2006 and is today. You are right that having Detroit be a talent magnet for young professionals is key to concentrating talent here. I’m skeptical that post bankruptcy Detroit has the resources to provide the basic services and amenities that characterize the places where young professionals are choosing to live and work. We have a long ways to go for Detroit to “become a vibrant urban core once more.” But sure agree that should be a priority going forward.

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