49th for another decade?

Important set of articles from Bridge on projected job growth in Michigan over the next decade. Definitely worth reading! (The lead article can be found here and a Q&A with me here.)

Using the 2013-2023 job projections from the US Department of Labor, Bridge found that Michigan is projected to have the second slowest job growth rate in the country for the coming decade. With job growth here a little more than one half the nation’s, 5.8%  compared to 11.4%.  And to make matter worse that a preponderance of the Michigan job growth would be in low wage occupations.

Ron French, who wrote the lead article, writes:

Michigan ranks 49th in projected job growth, beating out only Maine. (That’s actually an improvement for Michigan, which ranked 50th in job growth over the past decade.) 

Just being average in job growth would make a major difference. If Michigan added jobs at just the national average over the next 10 years, residents would have 245,000 more jobs to pick from than projected. … Michigan has a bigger hole to climb out of than most states. It lost a higher percentage of jobs in the past decade than any other state. Even with jobs now growing in the state, Michigan likely will still have fewer in 2023 (4,591,000) than it did in 2003 (4,614,000). … One more Scrooge-like number: There will be fewer new jobs created in Michigan in the next 10 years (266,000) than Michigan residents who are now unemployed (423,000). (Emphasis added.)

And many of those new jobs are projected to come with smaller paychecks. Five of the seven projected fastest-growing occupations offer salaries that might qualify workers for food stamps. The average salary of occupations projected to shrink is $22.16 per hour; growing occupations pay an average of $19.56 an hour.

The projections include a continued decline in manufacturing jobs, particularly in the auto industry. As French writes:  “An unchanged trajectory would mean that good-paying factory jobs, the bread and butter of Michigan’s economy for generations, will continue to dwindle. Manufacturing as a whole is projected to lose 30,000 jobs in the state – the equivalent of a busload of workers leaving a plant every week for 10 years. Automobile and light-duty manufacturing is expected to take the biggest hit – losing 12,000 jobs, or about a third of the Michigan workforce.”

Egads! Another decade of job growth near the bottom and fewer jobs in Michigan than twenty years earlier. This is the structural reality that Michigan needs to deal with, rather than all the happy talk that the cyclical–largely auto industry restart––bounce we are enjoying since the end of the Great Recession has turned Michigan into one of the nation’s economic leaders.

One might ask, “How can that be in a state that has done so much to lower business costs?” These projections should make clear that efforts to make Michigan more “business friendly”––two huge business tax cuts, right to work, etc––that have been the core of Michigan’s economic development strategy aren’t what matters most to generating more and better jobs.

Across the country the places which are creating more and better jobs have two characteristics in common: a high proportion of adults with a four-year degree and a high proportion of their jobs and wages are concentrated in the knowledge-based sectors of the economy. Michigan ranks in the mid thirties in each. (The only exception are the few states with oil and natural gas driven economies.)

These projections are predominantly based on Michigan’s current demographics (slow growth and aging faster than the country) and our current industrial structure (concentrated in slow growth and low pay industries). If the state doesn’t change this we, almost certainly, will continue to grow slower than the country in both jobs and personal income.

Don Grimes, in the Bridge article, sums up Michigan’s structural reality well when he says: “I’m afraid that’s the direction Michigan is heading, toward a poor, old state.”


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