December 16, 1997

Pulling Apart:
A State-by-State Analysis of Income Trends


Inequality has been increasing in Michigan for nearly two decades. This can be observed by ranking all Michigan families with children according to their income level, dividing them into five groups (or fifths) of equal size, and calculating the average income of each fifth of families. This analysis shows by the mid-1990s:


The Long-Term Trend

Since the late 1970s, income inequality has increased in Michigan. The long-term economic growth of the past two decades was not shared evenly among the poor, the rich, and the middle class. Instead, the top fifth of families with children fared substantially better than other income groups.

The gap between the top fifth of families and the bottom fifth of families grew by 77 percent since the 1970s. The gap between the rich and the poor increased faster than in all but 10 states.


The Recent Trend

Over the past decade, income inequality has worsened in Michigan. The average income of the richest fifth of families has increased faster than the incomes of middle class families, while the incomes of poor families have stagnated.

The gap between the rich and the middle class increased between the mid-1980's and the mid-1990's.

End Notes

1. The direction of this change was not statistically significant at the 95 percent level of confidence.