Wednesday, September 29, 2010

Michigan is Hit Hardest By the Recession

Photo Credit: aflcio
The current recession has affected all corners of the United States, but perhaps no other state has felt the weight of the financial downturn more than my home state of Michigan. According to the Detroit News, Michigan families have borne the brunt of the economy:
"Michigan families have been hit the hardest by the recession, with incomes plummeting and poverty rising at rates seen nowhere else in the country, according to the U.S. Census Bureau statistics released today.

Median household income for the state in 2009 was 21.3 percent below 2000 levels, the biggest drop in the nation and 6.5 percent lower than 2008. And the poverty rate, although not the highest in the nation at 16.2 percent, rose the fastest among all states since 2000, according to the U.S. Census.

With economists now saying the recession ended in 2009, it could be that the income drop seen last year will provide the bottom for the state. But a substantial bottom it is: The median household income was $42,255, more than $12,000 lower than the median was at in 2000 when adjusted for inflation.

Locally, Sterling Heights recorded the steepest income drop off all U.S. cities with a population of 65,000 or more, shedding more than $25,000 in annual income. The city had a 2009 median household income of $51,545, more than third lower than its $77,873 median income in 2000. Similar drops were recorded in Kalamazoo and Detroit.

Nationwide, median household income is down just 2.9 percent from 2008 and 6.6 percent from 2000. Michigan's national ranking during that time went from 16th in 2000 to 35th in 2009.

Much of the decline is attributed to the loss of hundreds of thousands of high-paying, yet lower-skill manufacturing job that once were the backbone of the state economy. As many of those jobs vanished, workers were forced to find alternative work in lower-paying industries.

The shakeout of the nation's manufacturing sector ravaged the Midwest, and the closest other states in terms of income loss are neighbors Indiana and Ohio, where median household income is down 15.1 percent and 13.9 percent, respectively."
In light of the current economic realities within the Great Lakes state, it should be no surprise that the housing market there has also suffered. A study by Coldwell-Banker was cited in a recent article in my hometown newspaper, The Times Herald, as saying that of the top ten cities in the country to find the cheapest house, three of them were from Michigan.  Detroit topped the list, Grayling was second and my hometown, Port Huron, was ninth on the list.

With some indicators pointing to economic recovery, hopefully the people of Michigan will be able to soon get on their feet.  In the meantime, we hope and pray for the best. 

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