Michigan per-capita income lags again; ‘it’s the lowest we’ve ever been’

• Michigan’s per capita income is 39th among states
• Per capita income is $61,114 compared to $69,815 nationally
• Once in the top 10 among states, Michigan’s income has declined for decades

Michigan continues to lag the nation in per capita income, ranking toward the bottom of states in the measure of prosperity, according to new figures compiled by the federal government. 

The state’s per capita income increased to $61,144 in 2023 from $58,009. Michigan remains 12.4% below the national rate, which rose to $69,815 from $66,220 over that time.

Combined over the two years, “it’s the lowest we’ve ever been,” said Lou Glazer, president of Michigan Future Inc. think tank.

“That's an enormous collapse,” he added. 

For almost all of 50 years, ending in 1980, Michigan's per capita income exceeded the national average. 

Michigan now ranks last in the Great Lakes, compared to 38th place for Ohio, 37th for Indiana, 30th for Wisconsin, 14th for Illinois and 12th for Minnesota.

Per capita income includes wages and other sources of income, including investments, pensions and Social Security. It’s then divided by the number of people in the state, including children.

The result points to Michigan’s lack of high-wage jobs compared to other states, Glazer said. 

The key way to solve that is education, policy experts told Bridge. 

“Generally, high-wage employment goes to those with a lot of education and skills,” said Bob Schneider, senior research associate at the Citizens Research Council of Michigan. 

The best way to raise relative wealth in Michigan “would be to improve the skills of your workforce,” Schneider said.

“How do we invest in human capital … in ways that make more of our populace’s skills productive and valuable to businesses?”

Glazier agreed, noting that high-prosperity states have a high proportion of adults with a four-year degree. About 31% of Michigan residents have a bachelor degree, compared to 35% across the U.S.

A report from Glazer and economist Donald Grimes released in early 2024 said that Michigan has been at risk for tumbling further. With nothing changing among all states, Michigan could end up as the 48th poorest state, above only Alabama and Mississippi, by 2047. 

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The CRC also authored a recent report on the state’s prosperity slide, noting that aspects affect Black and urban residents more acutely. It also pinpointed the lack of college readiness among state students as a limitation.

Gov. Gretchen Whitmer’s spokesperson said the Democratic governor has been rebuilding the state’s economic policy to increase prosperity, including closing the state’s income gap with most other states. 

Among changes during Whitmer’s administration has been the addition of large-scale economic development incentives, along with improvements to large brownfield development funding, her office said. 

“We are seeing signs of progress,” spokesperson Stacey LaRouche told Bridge in a statement. 

They include top-10 state growth in gross domestic product, or GDP; and $325 million in recent federal funding from the CHIPS Act that will support 180 new advanced manufacturing jobs.

Other initiatives, including a focus on innovation and a new research and development tax credit, which is expected to increase the number of knowledge-driven jobs, have yet to reach her desk for a signature.

And a $6 billion economic development plan was withdrawn from a House vote in July, and it hasn’t returned. 

To compete with other states for jobs, LaRouche said Michigan needs “the ability to support both big companies and small startups, invest in urban areas and small towns, attract new businesses and help existing hometown employers grow.”

Rep. David Martin, R-Davidson, said Michigan’s lower per capita income creates struggles for state residents, particularly during the recent hike in inflation. 

Michigan needs to “get state government out of the way of our economy, making it easier for businesses to invest in Michigan and create high-paying careers right here in our communities,” Martin told Bridge.

“Fewer of us are going to be in middle and upper middle class jobs,” Glazer said, leaving “more families struggling to make ends meet.”