New
personal income figures released Wednesday show that Michigan’s economic slide
continues. Michigan’s inflation-adjusted per-capita personal income grew a scant
0.6 percent in 2007. Only four states had a lower amount of growth than Michigan.
Michigan’s per-capita personal income is now 9 percent below the national
average, the lowest point it has been below the national average in the history of the data series, which began in
1929.
Overall,
the United States real per-capita personal income grew at 2.3 percent. It was
lead by Louisiana, which grew at 6.2 percent. That state’s real per-capita
income is now 16 percent above pre-Katrina levels. New York grew by 4.6 percent,
led by its gains in the income from its financial industries.
But the
gains in the nation have not meant gains for Michigan. As the chart below shows,
Michigan incomes have effectively stagnated since 2001, while the national
growth has been strong since 2003.
What can
be done to change this trend? Michigan policymakers should investigate adopting
a
right-to-work law. States with right-to-work protections for employees
performed relatively better in terms of their real personal income in 2007. Real
personal income grew by 3.8 percent, compared to 2.9 percent in forced-union
states. This is in addition to
other positive economic effects that may occur as a result of maintaining a
right-to-work law, including higher employment growth and lower unemployment
rates.
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James M. Hohman is a fiscal policy research assistant
at the Mackinac Center for Public Policy, a research and educational institute
headquartered in Midland, Mich. Permission to reprint in whole or in part is
hereby granted, provided that the author and the Center are properly cited.
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