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.

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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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