Leave the lights on; Michigan economy not as bad as it might seem
UNITED WAY IN THE NEWS
Wednesday, April 26, 2006
Rick Haglund
Booth Newspapers
A seemingly endless string of manufacturing job cuts, auto supplier bankruptcies and market share losses by domestic automakers makes it appear that Michigan is falling into the abyss.
But don't haul out those "Will the Last One Leaving Michigan Please Turn Out the Lights?" bumper stickers from the 1980s just yet.
Yes, Michigan is facing one of its most economically challenging periods ever.
But some say the state isn't doing as badly as the steady drumbeat of headlines blaring the latest bad news about General Motors Corp., Ford Motor Corp. and Delphi Corp. suggest.
They point to an overall improving employment picture, new industries that are creating jobs and rising incomes as offering hope that Michigan will once again transcend bad times.
"Michigan is not in a tailspin. Its economy is flat, but it is not in a tailspin," Comerica Bank chief economist Dana Johnson said at a recent economic conference sponsored by the United Way of Southeast Michigan.
The state's current unemployment rate, at 6.8 percent, is one of the highest in the country. But the jobless rate is down from 7 percent a year ago. And Michigan gained 9,000 payroll jobs in March, the first such increase since December.
"Our unemployment rate has been fairly constant at a time when GM and Ford have lost 20 percent of their market share," said former state economic development chief Doug Rothwell at a recent economic conference at the University of Michigan.
"We've created jobs in new industries such as biotech and alternative energy, things that weren't even on our radar screen five or 10 years ago," said Rothwell, who now heads Detroit Renaissance, an economic revitalization organization.
And personal income in the state is rising, albeit slowly, even while some 300,000 workers have lost their jobs over the past five years.
Personal income in the state rose 3.28 percent between the fourth quarter of 2004 and the fourth quarter of 2005. Incomes nationally rose 4.72 percent, according to a report by the National Governors Association and the National Conference of State Legislatures. Who would have thought that personal income in Michigan would have risen at all during this turmoil?
Michigan's economy was in far worse shape in the early 1980s when a severe national recession and plunging auto sales sent the state into a near economic depression. Michigan's annual unemployment rate in 1982 was a whopping 15.6 percent.
One of the more popular newspapers in Michigan at the time was the Houston Post, which unemployed Michigan workers were scouring for the help wanted ads. The energy and real estate industries were booming in Texas then.
Some say many of us feel worse about the economy now than we did in the early 1980s because rapid technological change and the global economy have made the future more uncertain. Plus, Michigan's current economic downturn has lasted six years, the longest stretch in half a century.
"It's not that it's so severe, it just never ends," said University of Michigan economist George Fulton, speaking at the U-M economic conference.
Fulton has predicted that Michigan will return to annual job growth next year. But job seekers can no longer look to the Houston Post for opportunities. The paper folded a decade ago.
Michigan, meanwhile, perseveres
Wednesday, April 26, 2006
Rick Haglund
Booth Newspapers
A seemingly endless string of manufacturing job cuts, auto supplier bankruptcies and market share losses by domestic automakers makes it appear that Michigan is falling into the abyss.
But don't haul out those "Will the Last One Leaving Michigan Please Turn Out the Lights?" bumper stickers from the 1980s just yet.
Yes, Michigan is facing one of its most economically challenging periods ever.
But some say the state isn't doing as badly as the steady drumbeat of headlines blaring the latest bad news about General Motors Corp., Ford Motor Corp. and Delphi Corp. suggest.
They point to an overall improving employment picture, new industries that are creating jobs and rising incomes as offering hope that Michigan will once again transcend bad times.
"Michigan is not in a tailspin. Its economy is flat, but it is not in a tailspin," Comerica Bank chief economist Dana Johnson said at a recent economic conference sponsored by the United Way of Southeast Michigan.
The state's current unemployment rate, at 6.8 percent, is one of the highest in the country. But the jobless rate is down from 7 percent a year ago. And Michigan gained 9,000 payroll jobs in March, the first such increase since December.
"Our unemployment rate has been fairly constant at a time when GM and Ford have lost 20 percent of their market share," said former state economic development chief Doug Rothwell at a recent economic conference at the University of Michigan.
"We've created jobs in new industries such as biotech and alternative energy, things that weren't even on our radar screen five or 10 years ago," said Rothwell, who now heads Detroit Renaissance, an economic revitalization organization.
And personal income in the state is rising, albeit slowly, even while some 300,000 workers have lost their jobs over the past five years.
Personal income in the state rose 3.28 percent between the fourth quarter of 2004 and the fourth quarter of 2005. Incomes nationally rose 4.72 percent, according to a report by the National Governors Association and the National Conference of State Legislatures. Who would have thought that personal income in Michigan would have risen at all during this turmoil?
Michigan's economy was in far worse shape in the early 1980s when a severe national recession and plunging auto sales sent the state into a near economic depression. Michigan's annual unemployment rate in 1982 was a whopping 15.6 percent.
One of the more popular newspapers in Michigan at the time was the Houston Post, which unemployed Michigan workers were scouring for the help wanted ads. The energy and real estate industries were booming in Texas then.
Some say many of us feel worse about the economy now than we did in the early 1980s because rapid technological change and the global economy have made the future more uncertain. Plus, Michigan's current economic downturn has lasted six years, the longest stretch in half a century.
"It's not that it's so severe, it just never ends," said University of Michigan economist George Fulton, speaking at the U-M economic conference.
Fulton has predicted that Michigan will return to annual job growth next year. But job seekers can no longer look to the Houston Post for opportunities. The paper folded a decade ago.
Michigan, meanwhile, perseveres
Labels: Financial Stability
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