A respected University of Michigan economic think tank has bumped up its projections for wages and salaries in Michigan this year.
Wage growth was slightly higher than expected in the first part of the year, and the Research Seminar in Quantitative Economics (RSQE) expects that trend continued since its September forecast. Therefore, its experts revised upward their prediction for the balance of the year.
“When we were looking at the data previously, we were saying there’s very little growth happening in people’s living standards since the pandemic,” said RSQE Director Gabriel Ehrlich. “Now we are seeing some growth and I think that’s an important point to make.”
The RSQE November forecast rolled out this week anticipates per capita income in Michigan will be $64,000 this year. That’s a $2,500 improvement over its September forecast.
“In most cases, it’s not enough to transform somebody’s life,” said Michigan State University economics professor emeritus Charles Ballard, who was not involved in coming up with the projection. “It’s not going to mean that you’re going to be able to buy a Cadillac, so, it’s an incremental, it’s a small movement in the right direction.”
But that income growth may be at the expense of job growth, said Ballard.
“It’s a mixed bag,” he said. “Good news – the income numbers have been revised upward, so we’re a little bit more affluent than we thought we were. Not-so-good news – employment growth has slowed to essentially nothing.”
Ehrlich said RSQE’s projections – which are based on federal jobs data -- are that wage growth will continue into 2025 but at a slower pace.
Ehrlich said a wild card is how new policies that might be adopted after President-elect Donald Trump takes office in January will affect jobs and income.
