1. Department of Economics Michigan State University
The Economy of the Big Ten States: Past, Present, and Future Presented to: Big Ten & University Credit Union Conference May 14, 2015
Charles L. Ballard
Department of Economics
Michigan State University
East Lansing, MI

2. BY FAR the worst since the Great Depression.
The recession of is
BY FAR the worst since the Great Depression.
The scars will remain visible for a long time.

5. Despite the recession, the United States economy is MUCH bigger than it was a few decades ago.

7. Per-Capita Income in 2013, Selected States
1. Connecticut $60, Wisconsin $43,244
3. New Jersey $54, Florida $41,497
4. Maryland $53, Ohio $41,049
13. Minnesota $47, Michigan $39,055
14. Nebraska $47, No. Carolina $38,683
16. Illinois $46, Indiana $38,622
18. Pennsylvania $46, Georgia $37,845
23. Iowa $44, Mississippi $33,913

8. High-Income States Tend to Have a Higher Cost of Living
High-Income States Tend to Have a Higher Cost of Living. But if We Adjust for Price Differences, the Rankings Don’t Change Much.

9. Rankings Among the 50 States, 2012
Nominal Real Nominal Real Income Income Income Income State Ranking Ranking State Ranking Ranking Connecticut 1 2 Wisconsin New Jersey 4 9 Florida Maryland 6 8 Ohio Minnesota Michigan Illinois No. Carolina Nebraska 17 6 Indiana Pennsylvania Georgia Iowa 23 7 Mississippi 50 43

10. Manufacturing’s share of the economy has shrunk dramatically.

12. Some Midwestern states have recently adopted Right-to-Work laws
Some Midwestern states have recently adopted Right-to-Work laws. These are unlikely to do much. For better or worse, unions had already lost a great deal of strength long before these laws were considered.

15. Many of the states with the highest incomes have high levels of educational attainment.

19. This slide is brought to you by the letter “M”:
College-
Attainment Income State Rank Rank 2013
Massachusetts
Maryland Minnesota Michigan Mississippi

20. The earnings gaps between people with different levels of educational attainment are very large.

21. Average Earnings in 2012, for Those Aged 45-54 Who Worked Full-Time Year-Round (For the Entire U.S.)
Men Women
Professional Degree $179,967 $119,231
Master’s Degree $115,702 $ 81,156
Bachelor’s Degree $ 96,591 $ 62,222
Associate’s Degree $ 64,159 $ 44,899
Some College (No Degree) $ 64,964 $ 42,952
High-School Graduate $ 50,178 $ 35,926
Some H.S. (No Diploma) $ 37,547 $ 23,648
Less Than 9th Grade $ 29,367 $ 21,532
Source: U.S. Census

22. In the first half of the 20th century, the distribution of income in the United States became dramatically more equal.

24. This did not happen by accident:
1. Huge increases in educational opportunity.
2. Tighter regulation of financial services.
3. Stronger labor unions.
4. More progressive taxation.

25. The trend toward a more equal distribution of income reversed in the late 1970s.

27. This did not happen by accident:
1. The supply of highly skilled workers increased less than the demand.
2. Deregulation of financial services.
3. Weaker labor unions.
4. Less progressive taxation.

29. State and Local Tax Effort Has Reduced Substantially29

30. In most parts of the country, the increase in income inequality was NOT spread evenly through the income distribution: The top pulled away from the middle, but the middle did not pull away from the bottom.

32. The disequalization was most pronounced in the Northeast.

34. The bottom half of the income distribution did manage to do pretty well in some regions.

36. For the U.S. as a whole, the income gap between black and white households has decreased slightly in the last 35 years.

38. The black-white income gaps, like everything else, show a lot of regional variation.

42. 1. Kentucky 0.91% / yr. 11. Maryland 0.52% / yr.
Estimated Annual Percentage Rate of Growth of the Ratio of
Median Income for Black Households to Median Income of
White Households, , for Selected States
1. Kentucky % / yr Maryland % / yr.
2. Alabama Illinois
3. Tennessee Florida
4. Arkansas US Average
5. Mississippi Pennsylvania
6. Texas Michigan
7. Louisiana New Jersey
8. Georgia Ohio
9. So. Carolina Wisconsin
10. No. Carolina Indiana

43. THANK YOU!