Trove Technologies Inc. says it analyzed occupation-specific salaries, tax data and costs of living across cities and states. Michigan came out as top discretionary income dog with an average $8,163, after paying expenses and taxes — meaning that's potentially extra money that people can spend on such things as dinners out, vacations, hot tubs, boats, RVs, or anything else their heart desires.
California residents only average $56 in discretionary income per year, and Maine folks are in the hole an average $1,241 each year.
Lynn Darr, sales manager at North Shore Marina, said discretionary income drives many businesses.
“Obviously, discretionary income is important to anyone in the recreation industry, whether it's boats, RVs or whatever — that's always a plus,” he said. “It's good for business if there's discretionary income for everyone — the economy is good and people are willing to spend money.”
Darr estimates new and used boat sales have increased 10-15 percent over last year.
“It's been a very good year,” he said. “It's been a constant uptick.”
Regionally, discretionary income appears strong, too. Although Trove Tech didn't have data available for Ottawa County or Grand Haven, Muskegon fared particularly well, ranking seventh in the nation among small cities, with $6,273 in discretionary income. The top jobs in Muskegon are sailors/marine oilers, food prep and service workers, personal care aides, receptionists, and medical assistants.
Harold Hall, owner of Hall's Sport Centers in Grand Haven and Muskegon, said he's surprised, but pleased, with Michigan's ranking.
“Discretionary income is very, very important to our business,” he said. “The problem is what I sell definitely has to be extra money because you don't have to have a boat.”
Hall said low interest rates, favorable weather and stabilized fuel prices have skyrocketed boat sales the past three years. And last weekend's heat helped, too. Hall's Sport Center delivered 8-10 boats and put them in the water, he said.
Hall said he sees “help wanted” signs everywhere he travels, and when he delivered a boat to Traverse City last week, he saw a sign at a Burger King advertising starting pay at $12.25 per hour.
“That's good,” Hall said. “People have to make money to buy boats from me.”
The study found that the Michigan cost of living averaged 15-20 percent below the national average.
Michael Pao, co-founder of Trove Technologies, said the data shows regional differences in take-home pay after factoring in salaries, cost of living and taxes. It tracked 778 occupations.
“Michigan ranks in the top echelon of states when it comes to enabling workers to keep more of what they earn,” Pao said. “Our research finds that Michigan blows away the rest of the country in terms of affordability, with housing expenses coming in at 32 percent lower than the national average and non-housing expenses 8 percent lower.”
Pao said many of his customers are trying to figure out the best place to live, and this study helps paint the picture in black and white in terms of finances.
“Cost of living calculators don't adjust for salary,” Pao said. “We take salaries, taxes, cost of living and put it into one big, happy product. How much money you make and how much you take home is one of the factors people consider when they're deciding where to live. We just want to make the information easily accessible to people.”
Pao said he was shocked at how Californian cities ranked, and yet, how many people choose to live there.
“It was an eye-opener to see the spread between Michigan and California,” he said. “If people had more information, they might think twice about where they choose to live. I think Michigan is a great place to live. Sometimes it isn't the first place that people think of, but if people want to have a good living and raise their families, it's a great place.”