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State gains in income, still below pre-recession levels

Christine MacDonald, and Charles E. Ramirez
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Michigan saw incomes go up and poverty decrease last year, but the economic gains weren’t enough to make up for the state’s losses from the Great Recession.

The state’s median household income in 2015 was $51,084, a 2.4 percent boost from the previous year, according to the U.S. Census’ American Community Survey estimates released Thursday. It’s the third straight year the state has seen incomes rise, but it’s still 7 percent lower than what residents were earning in 2007 — $54,812, adjusted for inflation.

Michigan’s improvements last year in poverty and incomes were lower than gains seen nationally and in the Midwest. The state’s median household income remains below the nation’s at $55,775.

“We are going in the right direction but the fact is we are still below where we were pre-Recession,” said Kurt Metzger, a demographer and director emeritus of Data Driven Detroit. “We still have a large population without the skills and education to take on those higher paying jobs.”

Flint and Detroit saw no change in poverty or incomes and remain the poorest cities in the county. Detroit has an estimated 39.8 percent of people below the poverty line making it the nation’s poorest major city. Flint’s 40.8 percent poverty rate ranks it above all cities nationwide with 65,000 or more residents.

“Poverty is one of our biggest problems in the city and in the country as a whole,” said Alexis Wiley, chief of staff for Detroit Mayor Mike Duggan. “You have to be honest about where you are. You have to have a clear understanding to be able to fix it.”

She said the mayor’s administration is trying to reduce poverty in the city by developing and implementing programs designed to help people get jobs. It’s also working to improve public transportation so residents can get to their jobs.

She also pointed out census data is typically a year behind.

“It doesn’t always tell you about the progress that’s being made,” Wiley said. “It’ll take another year to see that in the data.”

Jeannine LaPrad, president of Corporation for a Skilled Workforce, said the census figures on income and poverty don’t give the whole picture of what’s happening in Detroit.

For example, more Detroiters have jobs this year and employment is outpacing the state and country. Between December 2015 and July 2016, the number of employed people living in Detroit increased by 2.9 percent, or 6,218, according to figures from the nonprofit that specializes in economic and workforce strategies for governments, including Detroit’s. That compares with an increase of 1.6 percent in the state and 1.8 percent in the nation.

“The unemployment rate in the city has also decreased dramatically in the last five years,” LaPrad said, from more than 25 percent in 2010 to 12.5 percent in July. “The more people you have participating in the labor market affects income and ultimately the poverty rate.”

The census figures were released as the state announced the August unemployment rate in Michigan has remained unchanged at 4.5 percent.

Mich. recovery lags nation

Michigan’s poverty rate dropped 0.4 percentage points to 15.8 percent last year but the nation saw a bigger drop of 0.8 percentage points to 14.7 percent, according the ACS survey. The poverty line for a family of four is below $24,257.

Nationally and in the Midwest median incomes outpaced Michigan’s 2.4 percent increase. They rose 3.8 percent nationally and 3.3 percent in the Midwest region, according to the ACS estimates.

“We had a deeper, longer recessions than the United States,” said Xuan Liu, manager of research and data analysis for the Southeast Michigan Council of Governments. “As the auto industry recovery reaches its peak … we need to find other areas to grow the economy.”

Earlier this week, a separate smaller, national census survey was released that found the country’s median household income grew 5.2 percent from 2014 levels, the first increase since 2007. It also found poverty declined nationally by 1.2 percentage points, the largest drop since 1999.

That survey showed the nation is close to recovering to pre-Recession numbers: median household income is 1.6 percent lower than in 2007, adjusting for inflation, according to the New York Times.

Metzger said Michigan’s recovery lag is tied to fewer people with college degrees.

Of residents between the age of 25 to 34, only 31.6 percent have a bachelor’s degree or higher. That ranks the state 29th in the nation, Metzger said.

Livingston wealthiest county

The data released Thursday as a part of the American Community Survey only includes geographies with populations of more than 65,000. Metro Detroit counties — Oakland, Macomb, Livingston and Wayne — didn’t see a significant change in poverty or median incomes.

Livingston remained the wealthiest large county in the state, with a median household income of $76,455, compared to $69,998 in Oakland, $54,640 in Macomb and $41,557 in Wayne. In other counties, there were large boosts in income, including Midland, an increase of 20 percent to $59,292 and Kalamazoo, an increase of 15.5 percent to $52,164.

Other large cities did see significant changes, including Dearborn, whose median household income rose 15 percent to $51,424, and Shelby Township, which dropped 13 percent to $59,490. Metzer and Liu cautioned not to pay too much attention to large year to year changes in smaller cities.

Shelby Township resident Karen McCracken, a sales representative for a Metro Detroit manufacturing company, said the news that income in her hometown fell isn’t a surprise to her.

“There are a lot of houses up for sale and a lot of vacancies in all of the strip malls around the township,” she said. “And I know my paycheck hasn’t gotten any bigger.”

City’s white population same

The data released also included racial breakdown and showed that Detroit’s 2015 white population — 9.5 percent or 64,511 residents — was statistically unchanged from 2014.

The change in whites from 2013 to 2014 — a 1.3 percentage point jump — was the first significant increase statistically since 1950.

Liu said he wasn’t surprised the number of whites in Detroit was stable.

“Detroit is so big, it will take a longer time to see those numbers change,” Liu said.

Detroit’s ranking as poorest large city in the nation highlights the work that needs to be done improving education, Metzger said.

“We are celebrating the comeback of midtown and downtown ... but this is not a citywide Renaissance,” Metzger said. “You still have an extremely large segment of Detroit without the skills ... and without the opportunity for jobs.”

A bright spot was fewer people in Michigan — 6.1 percent — are without health insurance, a drop of 2.4 percentage points from last year. Nationally that number is 9.4 percent, a drop of 2.3 percentage points from 2014.

Highest poverty rates

The nation’s poorest cities with population over 65,000.

Flint: 40.8 percent

Camden, New Jersey: 40.5 percent

Detroit: 39.8 percent

Athens-Clarke County, Georgia: 38.9 percent

Reading, Pennsylvania: 38.8 percent

Bloomington, Indiana: 36.2 percent

Greenville, North Carolina: 35.9 percent

Youngstown, Ohio: 35.7 percent

North Little Rock, Arkansas: 35.5 percent

Merced, California: 35.1 percent

Source: American Community Survey

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