The percentage of Michigan residents living below the official poverty rate increased in 2022 to 13.4 percent, 1.3 million people, meaning the state, a center of US auto production, is now ranked 12th, tied with Ohio, in terms of the percentage of its population living in poverty.
An empty field in Brush Park, north of Detroit’s downtown is shown with an abandoned home. [AP Photo/Carlos Osorio]
Michigan’s median household income now stands at 37th nationally, down from 32nd in 2019. In terms of real buying power, median household income is down 2.6 percent since 2019, probably an underestimate of the real state of affairs. The US Census Bureau reports that real median household income in the state fell in 2022 from 2021 due to the impact of inflation.
With the ending of social support programs implemented during the pandemic, every indicator of social distress is on the rise. This includes Michigan, where the election of the Democratic administration of Governor Gretchen Whitmer in 2018 and reelection in 2022 have done nothing to improve the social position of workers. Since taking office Whitmer has prioritized spending on massive handouts to the auto industry over spending on education, health care and social assistance programs. This included a $1.7 billion handout to Ford for a battery plant in western Michigan, whose future is uncertain.
US Governor of Michigan Gretchen Whitmer speaks at the World Economic Forum in Davos, Switzerland Thursday, Jan. 19, 2023. [AP Photo/Markus Schreiber]
Further underlining the dire situation facing wide layers of the population in Michigan, there was a huge increase in the Supplemental Poverty Measure (SPM), which includes cash income, government assistance and other resources such as tax credits.
The SPM soared from 7.8 percent in 2021 to 12.4 percent in 2022, an increase of more than half, due largely to the ending of pandemic supports. The SPM is now 0.6 percentage points higher than the 2019 level of 11.8 percent.
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Poverty increased despite the fact that the official unemployment rate has remained relatively stable. This testifies to the policies of the unions, which have held pay gains since the start of the pandemic well below the rate of inflation. From 2021 to 2022, average weekly wages in the state rose by just 3.2 percent. For 2022 the official US inflation rate was 8 percent.
The lowering of real incomes in Michigan is not simply the result of impersonal economic forces but reflects the deliberate wage suppression carried out by the UAW and other unions in alliance with both big business parties. Added to that has been the relentless slashing of social support programs. The goal is to attract investment, particularly in the auto industry, by offering Michigan as a low-wage destination.
Democratic Michigan Governor Gretchen Whitmer and UAW President Shawn Fain at the 2023 UAW Special Bargaining Convention [Photo: UAW]
The recent contract agreement signed by the UAW with the Detroit Three auto companies maintains the tier system in which a large section of the workforce are employed as temps earning near poverty wages. The union will do nothing to reverse this trend. The contract does not protect autoworkers’ jobs against the impending mass layoffs as the auto industry transitions to electric vehicle production.
As it stands, workers’ incomes are at one of their lowest levels compared to the average US income. According to Michigan Bridge, the average Michigan resident earns just 87 cents on the dollar of the US average.
US Census figures show Michigan’s roughly 10 million residents in 2022 had an average household income of $57,038, compared to a national average of $65,470. In Detroit, the former Motor City, median household income dropped by 7 percent to $36,453. Median income in Flint, once the center of the General Motors empire, fell 18 percent to $33,036. Michigan was above the US average income for most of the 20th century but has now fallen to 37th.
According to a report this week in the Detroit Free Press, in Flint, the child poverty rate rose to 69.4 percent in 2022, more than double the rate of 34.2 percent in 2021. The jump is largely attributable to the ending of the child tax credit, which the Biden administration allowed to expire in the face of of Republican opposition.
As a result, Michigan’s poverty rate is higher than most states outside the US South. The state’s child poverty rate of 18 percent also ranks 12th in the US. Twenty-seven percent of African Americans and 18 percent of Hispanic residents are in poverty. The poverty rate increased in 49 of 83 Michigan counties.
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The terrible human toll this has exacted is spelled out in the State of Michigan 2022 Poverty Task Force report, which notes that life expectancy in the 48236 zip code, a wealthy suburb in Grosse Pointe, is 13 years longer than the life expectancy in the low income 48201 zip code in Detroit, just a few miles away.
Poverty is spreading throughout the state, with both urban areas such as Detroit and Flint impacted as well as rural northern counties. Lake (22.9 percent), Clare (17.2 percent) and Isabella (19.4 percent) counties in the central Lower Peninsula have some of the state’s highest poverty rates, as does Wayne County (21.2 percent), which encompasses the city of Detroit, and Genesee County (16.4 percent), home of Flint (US Census Bureau statistics).
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The poverty rate in the City of Detroit, despite its touted revival under Democratic Mayor Mike Duggan, stands at 33.8 percent. According to the Detroit Food Policy Council, 69 percent of households in the city were food insecure in 2021.
Largely as a result of the rollback earlier this year of the pandemic increase in Supplement Nutrition Assistance Program (SNAP) benefits, food insecurity is also increasing in Michigan and nationally. According to the US Department of Agriculture between 2020–2022 11.9 percent of Michigan residents went without food at some point due to lack of resources. In 2021 69 percent of Detroit residents were food insecure. (Detroit Food Policy Council)
Lisa Chapman, the director of public policy for the Michigan Coalition Against Homelessness, told Bridge Michigan of the rise in poverty, “It’s not surprising.”
According to Chapman, inflation led to rising rents (up to $1,367 for a one-bedroom apartment, from $1,100 in 2020) and other increases. The organization saw an 8 percent increase in homeless people, she said, rising to over 32,400 in 2022.
She noted that food pantries have reported increased demand as inflation—though falling—has kept prices far higher than they were three years ago.
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“People don’t have a lot of cushion,” Chapman said, adding that families have to choose what bill to pay. “It’s tragic.”
As the Federal Reserve continues to cut interest rates amid a cooling job market, the economy is poised for moderate growth in Michigan and nationally over the next two years, according to University of Michigan economists.
The national economy is projected to grow 2.3% in the fourth quarter of 2024 with the unemployment rate averaging 4.2%, while growth may ease slightly in the near future due to a slowing labor market, the UM economists said in a U.S. Economic Outlook for 2025–2026.
Meanwhile, Michigan’s economy has slowed since spring, with heightened uncertainty due to the recent elections, the economists wrote in a Michigan Economic Outlook for 2025–2026. Both reports were written by Jacob T. Burton, Gabriel M. Ehrlich, Kyle W. Henson, Daniil Manaenkov, Niaoniao You and Yinuo Zhang.
“The U.S. economy has gone through times of great uncertainty before and emerged intact,” the economists wrote. “We are projecting that both Michigan and the nation will follow that path over the next two years.”
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Job growth in Michigan is expected to decline in the second half of the year, but grow moderately in 2025 and 2026.
“We believe the election results have amplified the uncertainty surrounding Michigan’s economic outlook,” the economists wrote. “We project a small dip in Michigan’s job count in the back half of 2024 to give way to moderate job gains in 2025 and 2026, but the outlook depends critically on uncertain policy decisions and the subsequent market responses.”
The economists expect job growth in the state to be strongest in health care, leisure and hospitality and government, while sectors including manufacturing and professional services are expected to remain stable.
“We are projecting the state economy to return to growth over the next two years as easier monetary policy and another round of tax cuts boost medium-term growth,” the economists wrote. “Michigan adds 19,000 payroll jobs next year and an additional 26,700 in 2026. The unemployment rate in Michigan is projected to fall from 4.6% in late 2024 to 4.3% by the end of 2026.”
The Detroit, Grand Rapids and Ann Arbor metro areas showed a downward trend in job growth, with Detroit and Grand Rapids seeing 0.1% growth during the past year. Ann Arbor saw relatively stronger job growth of 1.3% as of September, according to the report. Metro-level data for October was not available for the report, officials said.
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The report attributes the underlying cause of the slowdown in Michigan’s job market as the Federal Reserve’s policy of monetary tightening to control inflation.
“Although the Fed has recently pivoted toward reducing short-term interest rates, we believe that real interest rates remain at a restrictive level and that the effects of the Fed’s past tight monetary policy continue to impact Michigan’s economy,” the economists wrote. “Indeed, in many ways, the national rebalancing in the labor market is precisely what the Fed hoped to engineer with its policy actions. Unfortunately for Michigan, our relatively rate-sensitive industry mix means that higher interest rates have taken a larger economic toll than nationally.”
The Michigan outlook points to stronger personal income growth, with per capita income increasing to $64,000 in 2024 and reaching around $68,500 by 2026, up 41% from 2019.
Inflation is expected to slow to 3.3% in 2024 and 2.2% in 2025 before increasing to 2.7% in 2026 due to new tariffs that the incoming Trump administration is expected to impose.
The U.S. and Michigan economic outlook reports follow the presidential election, which economists say will result in significant changes in U.S. economic policies. In the reports, the economists shared their thoughts on about the impacts of a second Trump administration.
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The recent election of Donald Trump as well as the Republican majorities in the U.S. Senate and House will likely to result in a continuation of tax cuts Trump enacted during his first term, the economists said. Also expected is a sharp rise in tariffs on imports from China to take effect by 2026.
While rising tariffs on Chinese imports and tax cuts for corporations and individuals are expected in upcoming years, revenue increases from tariffs are unlikely to offset revenue losses generated by tax cuts, according to the report. This could result in slower revenue growth and a sharp increase in federal deficits.
“As the stimulative effects of the expected tax cuts dominate the drag from the anticipated new tariffs, we project quarterly GDP growth to accelerate modestly during 2026, reaching a 2.5 percent annualized pace by 2026 Q4,” the economists wrote.
The report notes that the Federal Reserve has started cutting interest rates after keeping them at a 23-year high of 5.25% to 5.5% for 14 months. The rate was reduced by 50 basis points in September and 25 basis points in November, bringing it to 4.5% to 4.75%.
Additional cuts will depend on economic data, with the economists expecting another 25 basis point cut in December.
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Looking ahead at next year, the economists say they expect the Fed to make four more 25-basis-point cuts in 2025 and reach a range of 3.25–3.5% by the end of the year.
“In our view, the temporary uptick of inflation related to tariffs will not prompt the Fed to tighten policy in 2026,” economists wrote. “We believe that risk management concerns related to the potential negative growth effects of tariffs, which played a role in the 2019 rate cuts, will balance the upside risks from new tax cuts, prompting the Fed to stand pat.”
KALAMAZOO, Mich. (AP) — Quandre Bullock scored 20 points off of the bench to lead South Dakota past Western Michigan 80-76 on Wednesday night.
Bullock also contributed three steals for the Coyotes (5-1). Paul Bruns scored 18 points, shooting 6 for 13 (3 for 8 from 3-point range) and 3 of 3 from the free-throw line. Cameron Fens had 16 points and shot 7 of 9 from the field and 2 for 4 from the foul line.
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The Broncos (2-4) were led by Markhi Strickland, who posted 20 points and six rebounds. Western Michigan also got 13 points and six rebounds from Owen Lobsinger. Javaughn Hannah also recorded 12 points.
Bullock scored 12 points in the first half and South Dakota went into the break trailing 34-33. Bruns’ 18-point second half helped South Dakota close out the four-point victory.
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The Associated Press created this story using technology provided by Data Skrive and data from Sportradar.
With all the talk about running back carries in recent weeks, Michigan is planning to work another player into the rotation this week.
True freshman Micah Ka’apana could make his season debut for the Wolverines in their game Saturday against Northwestern (3:30 p.m., FS1), head coach Sherrone Moore said this week.
On Monday, Moore raved about Ka’apana’s “dynamic speed” and said Michigan has plans to “put it on display a little bit this week,” signaling plans to get the Hawaii native touches as the season winds down.
Under revised NCAA rules, football players can appear in up to four games without burning a redshirt. Ka’apana has not played this season; instead spending much of it on the scout team.
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“He’ll be implemented into the game plan a little bit more this week,” Moore said on the “Inside Michigan Football” radio show. “Very shifty, great contact balance. He’s small but he isn’t little. The dude plays with power — he’s strong — but he’s super fast.”
More: Ben Hall views himself as Michigan’s next RB1, and wants more carries to prove it
The 5-foot-11, 190-pound Ka’apana is a former three-star recruit from Bishop Gorman High School in Las Vegas, where he put up big numbers during his final two seasons. The Hawaii native rushed for 723 yards and nine touchdowns as a senior, and topped 1,000 yards and 15 touchdowns as a junior in 2022, while also catching 11 passes for 192 yards and four touchdowns.
Michigan (5-5, 3-4 Big Ten) has spent the bulk of its disappointing season leaning on two backs, Kalel Mullings and Donovan Edwards. Redshirt freshman Benjamin Hall saw some playing time during the non-conference portion of the schedule, then got four carries in the loss to Indiana on Nov. 9.
Another true freshman, Jordan Marshall, has yet to receive a carry despite appearing in two games as a kick returner on special teams. Marshall will continue in that role this week, Moore said, while the Michigan staff takes a closer look at Ka’apana.
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“He had a game in high school where he had five carries and five touchdowns,” Moore said. “So the dude is really, really dynamic. Really excited to see what he does with the ball in his hands.”
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