Business & Economy

Michigan has a growing gap between haves and have-nots

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By CELESTE BOTT
Capital News Service
LANSING – Michigan has a widening income gap, according to a national study by the Center on Budget and Policy Priorities and the Economic Policy Institute. The institute, a nonprofit research organization based in Washington, D.C., compared the incomes of the richest households to low- and middle-income households, showing inequality at the state level. Elizabeth McNichol, co-author of the report and a specialist on fiscal issues, said that while income inequality is a national problem, state governments can make changes that can help close the gap and promote more economic growth. “As state policymakers plan their budgets for next year, they should pursue policies that push back against the trend of rising inequality,” McNichol said. “States that narrow – rather than widen – income gaps will reap economic benefits in the long run.”
Actions state governments can take include raising the minimum wage, making tax systems less regressive, strengthening support for low-income workers, and improving the unemployment insurance system, according to the institute.

Business & Economy

Michigan leads Great Lakes states in personal income growth

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By WEI YU
Capital News Service
LANSING – Michigan’s personal income grew 5.2 percent in 2011 – the highest per capita level in a decade – and ranks 15th in the nation, according to a new report by the U.S. Bureau of Economic Analysis. And that’s just one indicator of an economic recovery, said experts at Grand Valley State and Oakland universities. Tricia Kinley, senior director of tax and regulatory reform at the Michigan Chamber of Commerce, said, “Undoubtedly, the state’s overall job growth would have to be the main factor that is pushing our residents’ personal income in a positive direction.”
Kinley said the state’s primary industry, manufacturing, is showing signs of recovery – particularly auto manufacturing – and job providers overall express more confidence in the direction that Michigan is heading. Earnings, one of three major components of personal income, rose 5.2 percent in Michigan from 2010 to 2011, but was below peaks reached in 2007 or 2008, according to the federal report. Although Michigan appears to be turning the corner, there is still significant work to be done to improve the business climate, which would, in turn, motivate employers to expand their businesses, Kinley said.