We need to narrow Michigan’s income gap

It’s no secret—income inequality exists in Michigan. However, when nearly 1 in 4 kids still live in poverty in the state and when too many Michigan residents must cobble together multiple part-time jobs just to barely make ends meet, income inequality is a problem. And more must be done to lift our most vulnerable residents to help narrow the gap.

A new fact sheet released by the League begins to explore Michigan’s income gap, the issues it causes and what can be done to reduce the disparity. According to a recent report, Michigan is the 11th most unequal state in income in the nation, with its top 1% earning 22 times more than the rest of its workers. Over the past 30-plus years, income growth for top earners far outpaced growth of the bottom 99%. Since the end of the Great Recession in 2009, incomes for the top grew by over 26% while incomes for the rest of the state stagnated.

Income inequality is a much bigger and broader issue than simply the top compared to the rest of us. Income gaps exist regionally, between genders and along race and ethnicity lines. In Michigan, median incomes for full-time working women continue to trail those of men by nearly $13,000, and workers of color made $3 less per hour than white workers. These disparities exist regardless of educational attainment.

We need to fix income inequality. The income gap affects Michiganians’ abilities to pay for healthcare or save for retirement or a child’s college education. And while income disparities exist at the national level, Michigan can implement state policies to help narrow the gap including:

• Improve working conditions such as expanding access to affordable, high-quality child care and enacting earned paid leave policies;
• Reforming Michigan’s taxes to allow our most vulnerable to keep more of their hard-earned income by restoring Michigan’s EITC or implementing a fairer tax structure; and
• Improving job opportunities by ensuring that all Michigan residents, children through adults, receive the necessary education for Michigan’s new economy.

The League will continue to highlight this important issue in a series of fact sheets. Income inequality is a persistent and increasing problem in Michigan, hurting Michigan residents, communities and the economy, and state policymakers must do more to bridge the divide.

— Rachel Richards