The chart above shows real median household income in Southeastern Michigan compared to the Nation from the beginning of the recession in 2008 to 2013.
The striking feature of the chart is that Real Median Household Income in 2013 in both the U.S. and Southeastern Michigan is substantially below the level of 2008. Even though the recession ended in June 2009 and the economic recovery is in its 5th year, household income has not recovered. In January 2008 real median household income in Southeastern Michigan stood at $56,747 and in 2013 it is $51,857. It needs to increase by about 10 percent to return to pre-recession levels. Growth in household income is crucial to a robust, sustainable economic revival. It animates more spending, investment, and risk taking, and improves consumer confidence in the future.
Another feature of the graph is that Southeastern Michigan real median household income is above the U.S. at the start of the recession in 2008 but experienced a more rapid decline than the Nation. In 2008 Southeastern Michigan real median household income was $457 or 0.8 percent greater than the U.S. figure. At the lowest point for real median household income in 2011, Southeastern Michigan figure was $1,589 or 3.0 percent less than the U.S. data.
Southeastern Michigan income is growing substantially faster than the nation in the last two years. The two year comeback has almost closed the gap with the nation, and the gap is now only $393. In 2013 Southeastern Michigan income grew by 1.6 percent compared with 0.25 percent for the U.S.
The table below displays 2013 real median household income for Southeastern Michigan and other selected metropolitan areas. Real median household income in Southeastern Michigan is comparable to the figures for Pittsburgh, Indianapolis and Milwaukee. Cleveland is slightly lower. Chicago, Denver and Minneapolis have substantially higher income than Southeastern Michigan. Of the eight cities, only Southeastern Michigan and Cleveland had income growth greater than 1 percent in 2013 compared with 2012.
The last two years are positive for income growth in Southeastern Michigan. The local region has experienced substantially more rapid growth than the Nation and other regions in the Mid-West. While an encouraging development, considerable economic territory must be regained before prosperity and the regional income is restored to levels previously realized.
The data is collected annually by the Census Bureau from the American Community Surveys (ACS) and released in September. The inflation component of income is removed. The median is the point that divides the household income distribution into halves, one-half with income above the median and the other with income below the median. Household income includes income of the householder and all other people 15 years and older in the household, whether or not they are related to the householder.