It’s not the time for happy talk about Michigan’s economy

I did a post after the Michigan presidential primary about how the results sent a clear message that Michigan was not back. Which is the story we have been told over and over by our political and business leaders for the past six years.

That post is obviously as relevant––if not more so––after the general election as it was after the primary. Far too many Michigan households are not doing well. Most of them are households without a four year degree.

The reality is:

No, your huge business tax cuts did not work for them.

No, your slashing the safety net did not work them.

No, your letting Michigan’s infrastructure crumble did not work for them.

No, your budget cuts to education and local government did not work for them.

No, your reductions in environmental and worker protection regulations did not work for them.

The clear message from both the primary and general elections is that no, Michigan is not back. That despite a surging domestic auto industry, a lower unemployment rate (the lowest in 15 years) and corporate Michigan and its top executives doing very well indeed, far too many Michiganders standard of living is declining not growing.

As we explored in a series of post (you can read them here, here, here and here) in 2014 this is the exact opposite narrative from what we have been told repeatedly by Michigan corporate, media and political elites. The story of the election––far too many Michiganders not doing well––is the far more accurate narrative of the Michigan economy in 2016.

Unfortunately two years after those 2014 posts almost nothing has changed. For the first time ever, Michigan is a low-prosperity state with a strong domestic auto industry. On the two metrics that matter most to whether Michigan households can pay their bills and save for their retirement and their kids education, per capita income and the employment to population ratio, Michigan is anything but back.

Structurally in the mid-thirties in per capita income and employment earnings (wages, self employment income and employer paid benefits) per capita. In the forties in the proportion of working age adults who have a job. The Michigan Association of United Ways estimates that 40 percent of Michigan households do not earn enough to pay for basic necessities.

By comparison the last time the domestic auto industry was strong in 2000 we were in the teens in per capita income and the twenties in the proportion of those working. That is what an economy looks like when we are actually back.

Lets hope that the election results sent the message loud and clear to the governing class that now is not the time for happy talk about the Michigan economy, but rather the time for a fundamental policy change: one that makes a rising standard of living for all Michiganders the goal.

The conclusion I wrote in one of the 2014 posts is as relevant today as then:

As the per capita income, employment to population ratio and the Michigan Association of United Ways data clearly portray, Michigan is a long ways from being back. Back should mean not just elites doing well, but a Michigan once again with a broad middle class. Where––as was true here for most of the 20th Century––if you are willing to work hard you can earn enough to raise a family and pass on a better opportunity to your children. What we need is not celebration of where we are, but commitment to get back to where we were.

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