Poverty, Labor Force Participation Moderately Correlated in Southeastern Michigan

As discussed throughout our most recent series, data about labor force participation highlights decreasing percentage of individuals who are not active participants in the work force. To further explore the recent labor force and poverty rate discussions, this post delves into the correlation between the 2015 labor force participation rate and the 2015 poverty levels across the Southeastern Michigan area.

A correlation is statistical technique that can be used to describe the relationship between two variables. The correlation coefficient, often expressed as ‘r’, is a numerical value that is always between +1 and -1. When r is closer to +1, it implies a positive correlation; as one variable increases, the other does as well. When r is closer to -1, it implies an inverse correlation; as one variable increases the other decreases. When the value of r is closer to 0 the implication is that there is no relationship between the two sets of data.

Looking across the region we find that labor force participation with poverty at a level of -0.46, a moderate correlation. (Note that we are using municipalities as the unit of analysis here.) This correlation tends to indicate that as labor force participation declines, poverty increases, all other factors being equal. This helps to explain why we are seeing increasing poverty in areas, including many suburban areas, where labor force participation was hit hard by the Great Recession.


We also examined the variation in this correlation across the counties in the region.


Correlation Coefficients for Southeastern Michigan Counties: Labor Force Participation and Poverty

  • Livingston County: -.4
  • Macomb County: -.24
  • Monroe County: -.18
  • Oakland County: -.28
  • St. Clair County: -.18
  • Washtenaw County: .08
  • Wayne County: -.84

These results present correlations calculated across municipalities within counties. We found that, aside from Washtenaw County, every other county in Southeastern Michigan had a negative correlation, meaning that as labor force participation declined, poverty increased. Of those six counties, Wayne County was the only one to have a strong negative correlation—(-0.84). This implies that municipalities in Wayne County with lower labor participation are very likely to have higher levels of poverty.


The correlations for five other counties–Macomb, Livingston, St. Clair, Monroe and Oakland–were negative but weak or moderate, meaning that there was still a tendency for poverty to increase with a lower labor participation rate, but it was weaker.


Washtenaw County was the only county in the region to have a correlation coefficient above 0, the value being +0.08, indicating a very low positive association between poverty and labor force participation.


Overall, these analyses show that six of the seven counties had weak to moderate correlation between their labor participation rates and their adult poverty rates. Wayne County was the exception to this, with a strong correlation coefficient of -0.84. Previous posts have shown that Wayne County communities also experienced some of the largest decreases in its labor force participation rates since 2010 and had some of the highest overall adult poverty rates. For example, in 2015 Highland Park had the lowest adult labor force participation at 54 percent, while the poverty rate is 49.3 percent.


In the suburbs, particularly those located nearer to Detroit (with some notable exceptions), there have been overall declines in labor force participation rates. At the same time data clearly shows that the percentage of adults in poverty has been increasing for many of the suburbs in Southeastern Michigan in recent years.

Labor Force Participation Declines Throughout Much of Southeastern Michigan

Of the 212 communities in Southeastern Michigan for which labor force data was available from the American Community Survey, 119 experienced a decrease in the percentage of 16-64 year olds in the labor force between 2010 and 2015. Alternately examining the 16 years of age and up population, 135 of the 212 communities experienced a decrease. Port Huron Township in St. Clair County experienced the largest decline in its labor force for both the 16-64 year old population and the 16 and up population. For the 16-64 year old population the decline was 17.1 percent. In 2015, 74.7 percent of the 16-64 year old population in Port Huron Township was part of the labor force, and by 2015 that had declined to 61.9 percent. For the 16 and up population, Port Huron Township had a 19 percent decline in its labor force participation rate between 2010 and 2015, making that the largest decrease in the region. In 2010, 64.6 percent of Port Huron Township’s 16 and up population was in the labor force and by 2015 that declined to 52.4 percent.

While majority of the region experienced declines in the labor force participation rate, some communities experienced substantial increases. For the 16 and up population there were five communities with a percent change increase above 20 percent between 2010 and 2015. The city of Memphis had the largest percent change between 2010 and 2015 at 25.9 percent. In 2010, 61 percent of the population was participating in the labor force, and by 2015 that number increased to 76.8 percent. For the 16-64 year old population there were only three communities where the percent increase in labor force participation rates was above 10 percent. Summerfield Township in Monroe County had the largest percent increase for the 16-64 year old population at 14 percent. In 2010, 71 percent of the 16-64 year olds participated in the work force in Summerfield Township, and by 2015 that increased to 81.2 percent.

Overall, this post shows that majority of Southeastern Michigan has experienced a decline the percentage of individuals participating in the labor force since 2010. For labor force participation, there is a clear tendency for inner ring suburbs of Detroit to show moderate or substantial declines. Exurban townships evidenced some of the highest increases in labor force participation.