DETROIT — So — what do things look like for Michigan as we end the second decade of what some still call this “new” century?
The short answer: Better than a decade ago, but still a far cry from where the state once was, and a long way from where everyone who lives there would have liked it to be.
First, the good news: Unemployment as of October was 4.1 percent – far, far better than in October 2009, when it was 15.1 percent, an aftereffect of the near-collapse of the Detroit Three at the start of the Great Recession.
Detroit’s classic automakers, General Motors, Ford, and what is now Fiat Chrysler, were on life support then, surviving on government bailout billions. They are all richly profitable now.
In fact, all three just successfully concluded negotiations with the United Auto Workers union, the outcome of which was mostly positive for everyone. The companies lost little freedom to operate as they see fit – and the UAW came away with contracts that provided bonuses of $9,000 to $11,000 per person — and, finally, a path to equal pay for the lower paid “Tier II” workers.
Even better, General Motors announced that it is giving its famous Detroit-Hamtramck Assembly Plant, the one widely known as “Poletown,” a new lease on life.
Last year, GM announced that it planned to end all operations at the plant. Now, they are instead investing a whopping $3 billion in retooling it to produce electric trucks. “This is huge,” almost twice the cost of an entire new Toyota-Mazda plant in Alabama,” noted Kristin Dziczek, the vice president of industry, labor and economics for the Center for Automotive Research in Ann Arbor.
But while all this is positive, the state has far fewer manufacturing jobs than it once did. Back in 1970, according to the U.S. Census, one-third of all Michigan workers had manufacturing jobs—1,168,540 of them. But by 2016, while the number of workers had increased by more than a million, manufacturing jobs fell.
Now, only about 18 percent of Michigan workers have manufacturing jobs – less than one in five. And experts say the situation isn’t likely to get better soon.
Earlier this month, Michigan State University released its annual economic outlook for the state. “Expect Michigan economic growth … to trail the nation at 2.3 percent growth in 2020,” it said.
Why? Due to the state’s still strong dependence on manufacturing. “Both durable and non-durable goods manufacturing is expected to exhibit weakness in 2020, with an expected loss of 22,000 jobs,” most of them tied to transportation.
That means selling slightly fewer autos. While other jobs may we created, they are unlikely to pay as well, according to the forecast, and “Michigan wage and salary growth is not expected to keep pace with the nation,” and unemployment will rise slightly.
This isn’t as devastating as a recession should be – but it isn’t welcome news in a state that has been fighting to get back to the days when it was one of the national leaders in prosperity.
Twenty years ago, Michigan was 21st in terms of per capita income. That fell to 41st during the Great Recession, and has since inched up to 36th. That still means that financially, more than two-thirds of all the other states are better off than Michigan.
Nor does the future look especially brighter. Forty years ago, Michigan had 19 members of the U.S. House of Representatives, some of whom, including the legendary John Dingell, John Conyers and Bill Ford had tremendous seniority and great power.
Power they sometimes used for the benefit of their state. Today, all those men are gone, and the state is down to 14 congressmen. The one with the most seniority, U.S. Rep. Fred Upton (R-Kalamazoo) is in the minority, and barely won reelection last year.
According to demographers, Michigan is likely to lose let another congressional seat after the 2020 census. “The good news is we are no longer losing population, and we will be over 10 million people for the first time,” said Kurt Metzger, the state’s best-known demographer. “The bad news is that other places are growing faster.”
So why isn’t Michigan making more of a comeback? While there are indeed fewer auto jobs, that’s not the main answer.
Michigan is failing because of an education gap.
For years, the state has cut spending on both public elementary, high school and higher education – and it shows.
Reading proficiency scores are horrible beyond belief in Detroit, as I discussed in this column on November 30. But they aren’t so hot in most places in the state. In fact, this year’s statewide test showed that 54.9 percent of all Michigan third graders couldn’t read adequately.
When Michigan attempted to get Amazon to build its second world headquarters in the state in 2017, the giant retailer dismissed its application, saying there was an insufficient “talent pool.”
The facts back this up. The state lags most other large states miserably in the number of residents with college degrees, especially with advanced degrees in science and math. Sandy Baruah, the normally upbeat CEO of the Detroit Regional Chamber of Commerce, calls the state’s education failures a “flashing red light.”
He added, in a recent radio interview, that “our current access to public transit … is completely inadequate.”
So, of course, are the state’s poor roads. Michigan’s economy may not be on the point of collapse. But if the state is to ever really prosper, someone is going to need to make hard choices, and soon.
(Editor’s Note: A version of this column also appeared in the Toledo Blade.)
