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Drop in Median Income

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In 2005:

  • 19% of children in Michigan lived in poverty, up from six years ago.
  • Almost a third of the state's African Americans lived below the poverty level.
  • Detroit remained one of the poorest big cities in the country with almost a third of its residents living below the poverty line.
  • Cities and townships posted drops in median household incomes ranging from 24% to 6% and poverty rates increased in all but three cities.

The hard numbers bear out what metro Detroit and Michigan residents have experienced as many teeter between financial survival and financial ruin. As the auto and manufacturing industries putter along, people are not only losing their high-paying jobs, but they are also losing their homes to foreclosures and being forced to take lower-paying work.

The income numbers were coupled with poverty data showing that in metro Detroit communities such as Troy and Clinton Township, the number of people living below the poverty level -- making less than about $20,000 for a family of four -- has about doubled in the last six years.

The number of children under 18 living in poverty in those same cities also jumped during that time. For example, 459 children lived in poverty in Troy six years ago. By 2005, that number leaped to 2,000, according to the new census estimates.

Detroit, with 31% of its residents living below the poverty line, remains one of the poorest big cities in the country, neck and neck with Cleveland at 32% of its residents living in poverty.

You can bet that a good chunk of this income drop in Michigan is due to the continued auto industry woes.

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DETROIT (Reuters) - U.S. auto sales weakened in August in an unexpected drop that industry analysts attributed to growing economic pressures on consumer spending.

Recent sales declines had been blamed on problems specific to the U.S. Big Three, who rely on trucks for almost 60 percent of their sales, but this time analysts also cited economic factors like rising interest rates, higher gas prices and a slowing housing market -- raising the specter of a deeper, industry-wide slump in the months ahead.

Sales of cars and light trucks dropped almost 5 percent in August from a year earlier after adjusting for the number of selling days in the month, industry tracking firm Autodata Corp said. Sales for the year to date are down more than 4 percent.

Ford Motor Co. (NYSE:F - news) was the biggest loser in percentage terms for the second consecutive month, posting a sales decline of nearly 12 percent.

General Motors Corp. (NYSE:GM - news) reported flat sales and cut fourth-quarter production by 12 percent, a move it said was needed to avoid resorting to low-margin sales to car rental companies in order to keep its assembly lines running.

DaimlerChrysler AG (DCXGn.DE)(NYSE:DCX - news), which has also been hit by the shift away from SUVs and trucks, reported a 3 percent drop in sales, its fifth straight decline.


Graphic of the Drop in the Median Household Income Throughout the Country

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Copyright 2008, by the Contributing Authors. Cite/attribute Resource . factcouraud. (2007, May 22). Drop in Median Income. Retrieved January 08, 2011, from Free Online Course Materials — USU OpenCourseWare Web site: This work is licensed under a Creative Commons License Creative Commons License