Lopsided income growth in Michigan

Contact: Judy Putnam at 517.487.5436
Editor’s note: A noon Monday (today, Jan. 26) media conference call will be held by the Economic Policy Institute to discuss the findings of the report. Details below.

Michigan is the 15th most unequal state in the country

The top 1 percent in Michigan took home 25 times more than the bottom 99 percent in 2012, according to new analysis published by the Economic Policy Institute for EARN — the Economic Analysis and Research Network.

In The Increasingly Unequal States of America: Income Inequality by State, 1917 to 2012, Estelle Sommelier and Mark Price update their analysis of IRS data—using the same methodology employed by Thomas Piketty and Emmanuel Saez to generate their widely cited findings—and show inequality is rising throughout the United States.

Between 1979 and 2007, the top 1 percent of taxpayers captured an increasing share of income in every state. While incomes at all levels declined as a result of the Great Recession, income growth has been lopsided since the recovery began.

From 2009 to 2012 top 1 percent incomes grew faster than the incomes of the bottom 99 percent in every state except West Virginia. In Michigan, the top 1 percent captured 82 percent of income growth in the period following the Great Recession.

“This is clear evidence why the economic recovery has not been felt by all families in Michigan — only those who were already doing well,’’ said Gilda Z. Jacobs, president and CEO of the Michigan League for Public Policy, an EARN affiliate. “Our lawmakers should look to this as they create the next budget. They should resist more tax cuts so that Michigan can help struggling families and grow the skilled workforce we need.’’

The study’s authors calculate how much income is required to be in the top 1 percent in each state. In Michigan, it is $300,750.

Nor is this a recent phenomenon. Lopsided income growth is also a long-term trend. Between 1979 and 2007, the top 1 percent in Michigan took home all of the total increase in state income. And Michigan was among four states (including Nevada, Wyoming and Alaska), where only the top 1 percent experienced rising incomes between 1979 and 2007, and the average income of the bottom 99 percent fell.

Today’s media teleconference

What: Media teleconference on rising income inequality in every state
Who: Estelle Sommeiller, socio-economist at the Institute for Research in Economic and Social Sciences in France, Mark Price, labor economist at the Keystone Research Center
When: Monday, Jan. 26 at 12:00 p.m. ET
Call-in number: 1-800-311-9402 Passcode: UNEQUAL    
Contact: Dan Crawford, Donté Donald or Liz Rose at 202.775.8810 or news@epi.org

The Economic Policy Institute (EPI) is an independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States.

The Michigan League for Public Policy, www.milhs.org, is a nonpartisan policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.