The changing nature of Michigan poverty

As we have written frequently, Michigan is now structurally a low prosperity state after having been a high prosperity state during the 20th Century. You can best get a sense of what that means to Michigan families when you compare economic wellbeing over a long period of time.

In this post we are going to delve into poverty data for Michigan households in 1969 and 2014. Both were years of a booming domestic auto industry––then and now the engine of the Michigan economy. In 1969 Michigan’s per capita income was eight percent above the national average, in 2014 it was twelve percent below the national average. An astounding decline of twenty percentage points.

This is the consequence of going from high prosperity to low prosperity. If Michigan were still eight percent above the national average in per capita income each Michigander would have had on average more than $9,000 more in income in 2014.

You can also see the consequence of the state going from structurally high prosperity to low prosperity in the change in the poverty rate for both families and individuals. In 1969 7.3 percent of families had incomes below the poverty line, in 2014 11.4 percent. An increase of 125,000 families in poverty. In terms of residents the number in poverty rose from 9.4 percent to 16.2 percent. An increase of 759,000.

What is even more troublesome/depressing is the change in the distribution of poverty. When you look at the poverty rate by education attainment you find, that except for those families with the head of household with a four year degree or more, the poverty rate about tripled! Specifically:

  • did not finish high school the poverty rate increased from 10.8 percent to 30.8 percent
  • high school graduate the poverty rate increased from 5.3 percent to 14.8 percent
  • some college or associates degree the poverty rate increased from 4.0 percent to 11.9 percent
  • bachelors degree or more the poverty rate increased from 2.0 percent to 3.2 percent

The good news is that the number of household with at least one adult with a four year degree or more tripled from 1969 to 2014.

In terms of the poverty rate by age you find a big increase in poverty for everyone except for those 65 and older where you see a big decline. Specifically:

  • poverty for those 13/14 and under rose from 10.0 percent to 23.4 percent
  • poverty for those 14/15 to 24 rose from 9.5 percent to 25.4 percent
  • poverty for those 25 to 44 rose from 5.8 percent to 16.0 percent
  • poverty for those 45 to 64 rose from 6.8 percent to 11.6 percent
  • poverty for those 65 and over declined sharply from 24.1 percent to 8.1 percent

What is most troublesome is the fact that nearly one quarter of all Michiganders under the age of 25 in 2014––with a strong economy and a booming domestic auto industry–were living in poverty.

It is also worth noting that a strong safety net matters. Social Security, Medicare, Medicaid and other benefits available to seniors has worked to dramatically reduce the incidence of the elderly living in poverty.

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