Department of Economics Michigan State University East Lansing, MI Michigan’s Economy: Income Distribution and Human Services Presented to Michigan League for Human Services December 4, 2007 Charles L. Ballard Department of Economics Michigan State University East Lansing, MI ballard@msu.edu

Michigan Incomes Really Have Grown Overall

But Income Growth Has Been Slower in Michigan Than the U.S. Average

Manufacturing’s Share of the Economy Has Shrunk Dramatically

Most of Michigan’s Manufacturing Losses Are in the Auto Industry

Michigan Lags In Educational Attainment

From 1979 to 2000, the Earnings Gap in Michigan Widened Dramatically For college graduates, inflation-adjusted earnings ROSE by 29.4% For those with only a high-school diploma, earnings FELL by 8.5% For those with no high-school diploma, earnings FELL by 25.5%

Income Inequality Has Soared

Michigan Has Big Regional Differences in Per-Capita Income (Data for 2005) 1. Oakland County $52,274 2. Washtenaw County $39,689 4. Leelanau County $36,502 6. Macomb County $34,761 8. Kent County $33,627 Michigan Average $32,804 13. Wayne County $30,855 30. Clinton County $30,685 66. Tuscola County $22,932 83. Luce County $19,115

Michigan Average 7.0% Ann Arbor 4.8% Lansing-East Lansing 5.4% Unemployment in Michigan Also Has Big Regional Differences (October, 2007) Ann Arbor 4.8% Lansing-East Lansing 5.4% Holland-Grand Haven 5.5% Grand Rapids-Wyoming 5.8% Saginaw 6.8% Michigan Average 7.0% Detroit-Warren-Livonia 7.8% Flint 8.1%

Tax Effort Has Reduced Substantially

Corrections Has Grown Relative to Other Functions of Michigan Government

Conclusion The last 30 years have not been good ones for low- and middle-income families in Michigan. There is plenty of reason to believe in a brighter future, but improvements will not come overnight, nor will they come without sustained effort.