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OCR Page 1 of 15file: states, Michigan
M
ICHIGAN BUDGET
An Initiative of the Michigan League for Human Services
and
TAX POLICY PROJECT
The State of Working Michigan
Michigan's Booming Economy Leaves Many Workers Behind
A comprehensive new review of the living standards of working Americans shows
that Michigan families in the highest income levels have experienced sustained income
growth, including benefits from large gains in the stock market since 1995. However,
while the new study shows that Michigan is faring better than the national average on
some measures, it also shows that the prosperous economy of the late 1990's has failed to
raise the fortunes of many Michigan workers. According to data drawn from the Eco-
nomic Policy Institute's State of Working America 2000-01, median family income
increased and the poverty rate decreased. According to the Economic Policy Institute's
Advisory Board
report:
Eugene Feingold
Chair
Median family income for four person families was $59,019 in 1998, surpassing its
Virgil Carr
1989 level of $56,294 (in 1998 dollars). In the 1990s, median income grew at the
John Roy Castillo
same pace in Michigan as in the nation as a whole, and the Michigan median income
continued to be higher than the national level.
Ben Davis
Douglas C. Drake
The poverty rate in Michigan fell more over the 1990s than in the nation as a whole,
Peter Eckstein
from 12.7% in 1988-89 to 10.7% in 1997-98. The poverty rate in Michigan in the late
George D. Goodman
1990s continued to be lower than the national rate (13.0% in 1997-98).
Karl Gregory
H. Lynn Jondahl
Despite these gains, income inequality in Michigan grew over the 1990s. In the late
Bob McKerr
1980s, the wealthiest 20% of families had 8.9 times the income of the poorest 20% of
Barbara Moorhouse
families. By comparison, in the late 1990s, the income of the wealthiest 20% of families
Charles Pryde
was 9.2 times that of the poorest 20% of families.
Juan Salazar
Frank Stocking
In addition, the EPI report shows that low wages, a high proportion of poverty level
Kathleen Straus
jobs, low educational levels, and a high tax burden continue to impact a large segment of
Michigan's work force.
Low Wages and Poverty Level Wage Jobs Keep Many Michigan
Workers Poor
It is often assumed that because the average unemployment rate for Michigan is low,
all income groups are reaping larger benefits. In Michigan, the wages of both low-wage
workers and workers in the middle of the wage distribution grew in the 1990's. However,
these gains for Michigan workers did not make up for losses in the 1980s:
In 1999, the hourly wages of low-wage workers (workers at the 20th percentile) were
still 6.9% lower than they were in 1979.
Supported by the Ford, Charles Stewart Mott and W. K. Kellogg Foundations and by local United Ways
1115 S. Pennsylvania Avenue, Suite 202, Lansing, Michigan 48912-1658 - (517) 487-5436 - FAX (517) 371-4546
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