Pulling
Apart:

A State-by-State Analysis of Income Trends

**MICHIGAN**

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 richest 20 percent of families with children had average incomes 13 times as large as the poorest 20 percent of families.

- The richest 20 percent of families with children had average incomes 2.6 times as large as the middle 20 percent of families.

**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 average income of the poorest fifth of families fell by $4,210 between the late 1970s and the mid-1990s, from $13,460 to $9,260.

- The average income of the middle fifth
of families fell by $540 between the late 1970s and the
mid-1990s, from $46,140 to $45,600.
^{1}

- The average income of the richest fifth of families increased by $20,850 between the late 1970s and the mid-1990s, from $96,250 to $117,110.

**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.

- The average income of the poorest
fifth of families increased by $810 between the mid-1980s
and the mid-1990s, from $8,450 to $9,260.
^{(1)}

- The average income of the middle fifth of families increased by $1,890 between the mid-1980s and the mid-1990s, from $43,710 to $45,600.

- The average income of the richest fifth of families increased by $14,420 between the mid-1980s and the mid-1990s, from $102,690 to $117,110.

**End Notes**

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