Arbor Update

Ann Arbor Area Community News

Census reports Michigan, Ann Arbor incomes dropping

30. August 2006 • Murph
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In a bleak day of DetNews reporting, the Census Bureau has released income estimates for 2005. Key depressing figures include:

  • Michigan’s median household income ($46,038) has fallen below the nation’s ($46,242) for the first time since this statistic has been recorded.
  • Michigan’s 2005 median income is down 12%, inflation adjusted, from its 2000 median.
  • Detroit has reached a 31.4% poverty rate, the second highest among the nation’s major metropolitan cities, behind Cleveland, up from 26.1% in 2000.
  • Ann Arbor’s median household income fell 18%, from $54,235 in 2000 to $45,798 in 2005.

Gubernatorial candidates attempt to make hay:

“This is just another indicator that Michigan is in desperate need of change,” said John Truscott, spokesman for Dick DeVos’ GOP gubernatorial campaign. “We have fallen to the bottom of the barrel in so many key economic indicators The governor likes to blame everybody else. But look at the rest of the country, which is doing pretty darn well.”

Chris DeWitt, spokesman for Gov. Jennifer Granholm’s campaign, said it’s an additional sign that outsourcing is causing severe harm to Michigan’s economy. DeWitt said millionaire DeVos’ “income has risen dramatically, thanks to his lobbying to make it easier to outsource jobs to countries like China.”

  1. “But look at the rest of the country, which is doing pretty darn well.”

    Truscott is on crack. Based on what I saw in today’s paper, it’s pretty clear that almost everyone is suffering. There were just a few places in the county where incomes didn’t decline.

       —John Q.    Aug. 30 '06 - 08:59PM    #
  2. It’s a little hard to know how to compare ACS data with Census data. It’s like comparing old SAT scores with new ones. But I’m sure a lot of this drop is very real.

    (I really need to learn more about the ACS, since it’s replacing the census in 2010—I don’t understand how that’s going to work. If it doesn’t count students in dormitories, then how is it going to be used to determine actual population?? The ACS thinks we have 20 million fewer people living in the US than the census…)

       —Young Urban Amateur    Aug. 30 '06 - 09:32PM    #
  3. I don’t see any explanation of the dramatic drop in AA’s per capita income over the past 5 years.

    Does anyone have any ideas?

       —David Cahill    Aug. 30 '06 - 10:58PM    #
  4. For those who missed the related image, you can see that mdeian income is down almost every in the US.


       —John Q.    Aug. 30 '06 - 11:04PM    #
  5. A $9500 drop in 5 years sounds really fishy, like maybe there was some weirdness with how students were accounted for?

       —Patrick    Aug. 30 '06 - 11:23PM    #
  6. I’m less concerned about the drop in median income than I am the increase in the poverty rate. It would be helpful to know how much of the median decrease is due to the changes within each quartile.

    David, note that the poverty rate in Ann Arbor increased from 15.6% to 22.3%. I doubt that that explains all of it, but it’s quite significant. Personally, my (consulting) and my wife’s (downtown retail) businesses were down in ‘05 compared to 2000. I would pin the primary responsibility for it on the federal government, the Bush administration in particular.

    I’m also concerned that Ann Arbor was second to only Canton in the increase in average one-way commute. The commute time in many other cities decreased. At least this is valuable information to have.

       —Steve Bean    Aug. 30 '06 - 11:29PM    #
  7. Both gubenatorial candidates sound idiotic here. The Michigan downturn is not the result of sending jobs to India. Nor are we the only state suffering.

    Neither of these clowns deserve to be elected.

       —Just a homeowner    Aug. 30 '06 - 11:41PM    #
  8. It’s interesting to look at these stats in particular and the overall Census Stats in general. According to the U.S. Census report on poverty overall, it appears that there has been little change from 2004-2005 in the poverty rate, but it sounds like we definitely saw a change here in the Det Metro area.

    As an Ann Arbor homeowner, I am definitely feeling the affects of increased utility bills and interest rates (especially on my variable interest loan, yikes!), so I can definitely see the issue here.

    But another interesting finding from the Census is while poverty numbers in general have stayed pretty flat, the numbers of those living in extreme poverty is actually increasing (they report a 300,000 person increase in people living at or below 50% of the poverty line).

    As an employee of SOS Community Services, which helps homeless families and people in need, I’ve heard from front line staff workers that we are seeing increased use of our housing crisis services. These services include food bags, personal care item distribution, and help with utilities and evicitions.

    So yeah, this is all depressing, but I think it also demonstrates why many of us smart wonderful people need to stay here. If we care about the community, we care about it through whatever. I am glad Arbor Update is putting this topic out there for people to think about.

       —Nancy Shore    Aug. 31 '06 - 12:27AM    #
  9. As YUA notes in #2, the 2000 numbers are Census, and the 2005 are American Community Survey. I’m not totally clear on the difference in methodology, either. (Though note that the ACS lists Ann Arbor’s population at only around 98,000, in part because they don’t count dorms and other institutional/group residences.) The AANews article notes that “Even with a margin of error of $4,223 for Ann Arbor’s 2005 median household income, that translates to a loss ranging from 7.8 percent to 23.3 percent at the upper and lower ends.”

    David, re #3: I think a big part of the “dramatic drop” is just stagnation – the $54k for 2000 is inflation adjusted; the original number is $46,299. I expect a lot of it, therefore, is that people just haven’t been getting raises or promotions, people who retire or change jobs are getting replaced for cheaper, independent businesses see a little less business, consultants can’t raise their rates, and so forth. It’s a lot easier for a drop in income to slip by when the number stays basically the same, and it’s the value of that number that changes!

       —Murph    Aug. 31 '06 - 01:10AM    #
  10. I agree with Patrick that this quick decline suggests some bad analysis, although Murph makes a good point regarding the hidden loss of inflation. I’m combing through factfinder data hoping to something jumps out at me, but so far nothing but a general decline since 2000. My first guesses were an aging population or an increase in single-earner households (since this is household data a person living alone contributes less than two lower-wage earners living together, right?), but neither one has panned out yet.

    The thing I found really strange is that there is ACS data for 2000. I don’t see why they compared 2005 ACS to 2000 census when they could have easily matched apples with apples. In fact, factfinder uses the ACS data for 2000.

       —Scott TenBrink    Aug. 31 '06 - 07:42AM    #
  11. They were just testing the ACS in 2000, and it was a very small sample size. If you look at the confidence intervals, you’ll find that they are very large, indicating not very valid data. So at least they were comparing accurate apples to oranges.

       —Lisa    Aug. 31 '06 - 07:58AM    #