For decades we have asserted that a low unemployment rate with a high ALICE rate is not a good economy. That economic success should be measured by household’s ability to pay the bills and save for emergencies, retirement and the children’s college education not just whether one has a job or not.
We need to move away from defining economic success and measuring policymakers effectiveness by the unemployment rate and/or the overall growth rate of the economy. These measures tell one little or nothing about whether or not we have an economy that as it grows benefits all. Tells one little or nothing at all about whether an economy is characterized by lots of high paid jobs or lots of low paid jobs.
Michigan should adopt as its measures of economic success the metrics recommended by the Growing Michigan Together Council. This cross-sector, cross-ideology panel recommended economic success be defined by Michigan being:
- Top ten in household median income. By raising the median household income, we will have created more higher-paying jobs and provided the right education and training for our people to fill them. Growing median income is essential to ensuring a prosperous future for all Michiganders, including those who are currently underserved.
- Top ten in postsecondary education attainment. To increase household median income, we must also increase our postsecondary education attainment, which is directly correlated with higher-paying jobs and the ability to recruit the next generation of employers.
- Top ten in net talent migration. Retaining and attracting talent, especially young talent that is increasingly mobile, is necessary for population growth. Successful talent migration includes developing the jobs and places people are seeking.
Income, college attainment and talent attraction are what matters most to Michigan’s future prosperity. Income, of course, is the ultimate measure. College attainment and talent attraction combined are what in large part determines income. On our preferred measure of income, by far, the best predictor for both state’s and region’s per capita income is the proportion of adults with a BA or more. Michigan is 34th in BA attainment and 40th in per capita income. The two go hand in hand in almost all states.
Over the last quarter century Michigan has been nowheres near the top ten on any of these measures. During those twenty five years, some have been characterized by a low unemployment rate and an expanding economy, while others have been characterized by a high unemployment rate and economic contraction. But in all those years we have been lagging the nation on all three metrics. None of those year should have been characterized as successful.
Getting the metrics right is important because they drive economic and education policy and programming. A different set of polices and programs will be deployed if the goal is a low unemployment rate and economic expansion rather than the goal being income, college attainment and talent attraction. Michigan has paid a steep price from defining economic success wrong. It’s far past time we move to a definition of economic success aligned with the Growing Michigan Together Council recommendations.
