Incomes fall in Michigan, number in poverty rises

from the Galveston Daily News

While most states had steady poverty rates, the news wasn't good for our home state of Michigan. - Kale

By JOHN FLESHER

TRAVERSE CITY -- Government data painted a bleak economic picture for Michigan, where the auto industry's downward plunge has rippled across the state.

Michigan was the only state where poverty rose last year, as well as the only one where incomes fell, according to U.S. Census Bureau statistics released Tuesday that illustrate the uniqueness of the state's economic swoon.

"It's really a depressing picture," said Amy Rynell, director of the Heartland Alliance Mid-America Institute on Poverty, an advocacy group based in Chicago.

Michigan's poverty rate was 14 percent, up from 13.5 percent in 2006 and more than a full percentage point above the national rate, which was virtually unchanged during the same period. The state's rate has grown steadily since 2000, when it was just above 10 percent. The number of people in poverty increased by 45,000 during 2006-07.

The 2007 median income in Michigan was $47,950, down 1.2 percent or $596 from the 2006 median of $48,546. The state's nationwide ranking slid from 24th to 27th.

Nationwide, the median household income rose to $50,233, a modest increase of $665 from the previous year, although it was the third consecutive annual rise. While the overall poverty rate held steady at 12.5 percent, Latinos, children and the foreign-born - demographic categories that overlap considerably - experienced significant increases.

Michigan Gov. Jennifer Granholm has emphasized diversifying the state's economy, promoting growth of industries such as defense contracting, alternative energy and film production. The Democratic governor and lawmakers this year boosted tax incentives for businesses adding jobs.

Last week, Granholm announced 20 new business expansions or relocations expected to bring $658 million in new investment to the state.

Whether such improvements will be enough to offset continued gloomy news from the automotive sector remains to be seen. But the 2007 statistics, reported in the Census Bureau's annual American Community Survey, offer little reason for optimism.

They also showed Michigan's rate of "extreme poverty" - a yearly income of less than half the poverty threshold, or $10,325 for a family of four - jumped from 6 percent in 2006 to 6.5 percent last year. Eight years ago, the rate was 4.8 percent.

"We know that people with incomes that low are living in unsafe conditions," Rynell said. "Children probably are not getting enough healthy food to eat. People may be living in shelters. Seniors are likely skipping dosages of medication to make ends meet."

The child poverty rate increased from 17.8 percent to 19 percent between 2006-07, while the national rate stood at 17.6 percent.

Detroit's poverty rate of 33.8 percent was highest among cities of 250,000 or more, while Kalamazoo and Flint tied for fifth among cities of 65,000 to 249,999 people. Both had rates of 35.5 percent.

"We know that many people are struggling harder and harder just to get by, and more vulnerable people are turning to public services for help," said Sharon Parks, president and CEO of the Michigan League for Human Services. "This reinforces the need to strengthen our strained safety net, and policymakers must pay attention to these startling figures."

In another report released Tuesday, the Census Bureau said 11 percent of Michigan residents had no health insurance coverage in 2007 - up from 10.4 percent in 2006 and 9.1 percent at the beginning of the decade.

But that was one category in which Michigan fared better than most other states. The national average of uninsured citizens was 15.5 percent, and Michigan ranked 11th best nationally in providing health coverage.

More than 18 percent of Michigan residents get some type of assistance through the state Department of Human Services, said Sheryl Thompson, acting director of outstate operations.

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