In our last post we looked at the unacceptable increase in poverty in Michigan that has occurred over the long term. From 1969 to 2014. Its a consequence of Michigan becoming structurally a low prosperity state. After have been a high prosperity state during the 20th Century.
As we have explored previously the cause for us now being low prosperity is predominantly that the state has been a laggard in aligning with the transition that is occurring in the national economy from a factory-based to a knowlege-based economy. Michigan is still too much the former and too little the later.
In pulling together the data for the last post, we looked at state per capita income in 1969. In many ways the peak of the dominance of the domestic automotive industry. Michigan’s per capita income then was eight percent above the national average in large part because of lots of high paying, factory jobs. No more. Despite a resurgent domestic auto industry, Michigan today is eleven percent below the national average in per capita income.
We have frequently suggested both Massachusetts and Minnesota provide models for high prosperity states in the 21st Century. They both have aligned with the move towards a knowledge-based economy. Massachusetts as consistently one of the nation’s most prosperous states. And Minnesota, the most prosperous state in the Great Lakes.
In 1969 Minnesota had a per capita income seven percent below the national average, in 2015 they are six percent above the national average. Minnesota has gone from fourteen percent poorer than Michigan in 1969 to nineteen percent more prosperous today.
Massachusetts was nine percent above the national average in 1969, in 2015 they are twenty eight percent above. Massachusetts has gone from one percent more prosperous than Michigan in 1969 to forty four percent more prosperous today.
In our research we have found that the common characteristics of non energy-based high prosperity states are
- They are over-concentrated, compared with the nation, in the proportion of total wages coming from knowledge-based services
- They have a high proportion of adults with a four-year degree or more
- They have a big metropolitan area with even higher per capita income than the state
- In that big metropolitan area, the largest city has a high proportion of its residents with a four-year degree or more.
Massachusetts and Minnesota have all four. Michigan doesn’t. End of story.