Thirty Years of Flat Wages Stalls Michigan’s Economic Recovery

“The bottom line is that household incomes have been stagnant for the past three decades. The short-term gains we experienced in the 1980s and 1990s have been decimated by declining wages since 1999,” said Townsend, who serves on the committee.

Based on the U.S. Census Bureau’s historical data, when adjusted for inflation, the median household income in 1984 was $49,041, compared to $48,801 today.

“While the unemployment rate has slowly declined since the recession, wages have not recovered. Median household income is still 13 percent below pre-recession levels,” said Townsend. “As we look to address the issue of labor shortages, we must be conscious of these facts.”

Townsend also highlighted the issue of steadily declining median household income since 1999.

“When adjusted for inflation, median household income has declined by over 24 percent since 1999, which amounts to $15,633 annually,” said Townsend. “This represents a huge loss in earnings for working families.”

Speaking to current household income stagnation, Townsend cited that nominal median household income in Michigan has declined slightly since 2011, when Gov. Rick Snyder took office: $48,879 to $48,801.

“When adjusted for inflation, median household income in Michigan has declined by 4 percent since 2011: $50,625 to $48,801,” said Townsend. “In the interest of working families and our local economies, it is critical that we reverse this trend.”

Townsend also noted that the percentage of dual-income households has increased significantly during this period.

“According to the Department of Labor Statistics, from 1970 to 1993, the percentage of dual-income households rose from 39 percent to 61 percent, meaning many more households are relying on an additional to offset declining wages,” said Townsend.

Townsend sees a relationship between household income stagnation and Gov. Snyder’s priority to increase career technical education for skilled trades, particularly in construction, manufacturing and agriculture.

“Gov. Snyder accurately recognizes the need to improve training and apprenticeship programs to help Michiganders qualify for high demand jobs, but the evidence and basic economic theory suggests this won’t be enough,” said Townsend. “Too many of these occupations have experienced stagnant and declining wages, which have failed to attract well-trained applicants. Increasing the supply of qualified applicants will not result in increased wages and benefits for these workers. The opposite is actually likely to occur.”

While working to improve training and apprenticeship programs, Townsend asked his colleagues to also make an effort to identify ways to empower Michigan workers by enhancing their ability to bargain for better wages and benefits.