In a dramatic sign of its ailing economy, Michigan's household income dropped, more children joined the ranks of the poor and the number of people living below the poverty level jumped in the suburbs, according to recently released data from the American Community Survey.
 
The figures show Michigan's median household income fell more than any other state in the nation during the last six years. Median income was $46,039 in 2005 – 12 percent less than what it was in 1999, when adjusted for inflation. None of the 28 counties and 21 municipalities for which data was reported showed a rise in median household income between 1999 and 2005.

The news was grim in other areas, too.

In 2005:

• 19 percent of children in Michigan lived in poverty, up from the rate six years earlier.
• Almost a third of the state's African Americans lived below the poverty level.
• Detroit remained one of the poorest big cities in the country, with almost a third of its residents living below the poverty line.
• Cities and townships posted drops in median household incomes ranging from 6 percent to 24 percent and poverty rates increased in all but three cities.

The hard numbers bear out what metro Detroit and Michigan residents have experienced as many teeter between financial survival and financial ruin. As the auto and manufacturing industries sputter along, people are not only losing their higher-paying jobs, but they are also losing their homes to foreclosures and being forced to take lower-paying work.

The income numbers were coupled with poverty data showing that in metro Detroit communities such as Troy and Clinton Township, the number of people living below the poverty level – making less than about $20,000 for a family of four – has about doubled in the last six years.  The number of children under 18 living in poverty in those same cities also jumped during that time. For example, 459 children lived in poverty in Troy six years ago. By 2005, that number leaped to 2,000, according to the new census estimates.

Detroit, with 31 percent of its residents and 45 percent of its children living below the poverty line, remains one of the poorest big cities in the country, neck and neck with Cleveland (32 percent of its residents living in poverty).

Of note is how this economy has really found its way into what is not considered the typical poor. Poverty is finding its way into the lower middle class and middle class. Those who never thought they would are now seeking financial help.

In the tri-county area, Macomb County saw the biggest jump in the number of poor people. Six years ago, 44,000 people lived in poverty in the county, but the latest estimates show that number jumped to almost 71,000.

Figure 1 shows the effect of the declining economy on the purchasing power of households in Michigan and the tri-county area.  Michigan households, as a whole, experienced a 12 percent decline in median income between 1999 (data collected in the 2000 Census) and 2005.  With the exception of Oakland County households, which lost 11.7 percent of their buying power, the remainder of the tri-county saw household income dropping faster than the statewide average.  Macomb County household income fell by 12.6 percent, while Detroit households experienced an 18.8 percent drop.  Wayne County households experienced a 14.4 percent decline in median household income.

The significance of these large decreases is the fact that, even with poverty rates increasing, there are a rising number of households that have seen their income edging closer to the poverty line.  When this is combined with the fact that more and more households are losing health insurance and the cost of basic necessities – food, clothing, shelter, gas for heat and transportation, etc. – are continuing to rise, it is obvious that the tri-county area’s safety nets are being stretched to the limits.

Figure 1.  Median Household Income, 1999 and 2005 (in 2005 adjusted dollars)

Figure 2 illustrates the “other side of the income coin” – poverty.  Three aspects of poverty are covered:

• Poverty rates for all persons;
• Poverty rates for children 0 – 17 years of age; and,
• Poverty rates for single female householders, with related children.

The 2005 estimates reveal that the rate of poverty increased across all three measures for each of the five geographic levels.  Single female householders raising children had the highest rates of poverty across all areas.  The lowest rate was found in Oakland County at 24.2 percent, followed by Macomb County at 32.3 percent. The rate statewide was 40.3 percent, while Wayne County came in at 44.6 percent and Detroit more than doubled the rate of Oakland County with 49.6 percent. While the poverty rate for children outdistanced that of the general population, nowhere was the situation worse than in Detroit where the child poverty rate increased from 33.9 to 44.3 percent over the six-year period.

Figure 2.  Selected Poverty Rates, 1999 and 2005, for Michigan and the Tri-County Area