Michigan economy still struggles to compete with other states, study shows

“If we can find ways to remove barriers to work, … (and) get to the US average for labor force participation, we would have another 250,000 workers in Michigan’s workforce,” did he declare. “It’s a significant leap.”

BLM’s annual benchmarking report places Michigan 29th out of 50 states in terms of economic growth, a ranking Donofrio called “middle of the pack” after comparing it to its original position of 49 in 2010. .

The goal remains to get Michigan into the top 10.

“We’ve come a long way,” he said. But challenges remain.

“Our growth rate is not as high as it should be to really overtake other states,” Donofrio said.

This year’s annual study added four measures. In addition to traditional business climate measures like GDP or gross domestic product, BLM has added labor force participation, net migration, number of people living in poverty, and business start-ups. Combined, they show how Michigan residents are faring instead of just measuring the state‘s economy.

Ranked from highest to lowest, Michigan’s scores in the 2022 Data Comparison with Other States show:

  • Perception of the business climate, 15th
  • Net talent migration, 19th
  • Net business creation, 20th
  • Poverty, 34th
  • Median household income, 35th
  • Educational level, 35th
  • GDP per capita, 36th
  • Labor force participation, 41st.

Over the past three years, Michigan has improved in perceptions of the business climate, poverty — which has largely changed due to federal pandemic stimulus payments — and educational attainment.

But the state has lost ground over the same period in terms of GDP per capita, median household income and labor force participation. Michigan’s rankings for talent migration and business formation over three years were flat.

According to this year’s BLM benchmarks, the top 10 states are Utah, Washington, Colorado, Texas, Massachusetts, Virginia, California, Oregon, Florida and Arizona.

“It’s the states that give us a window into what Michigan needs to do,” Donofrio said.

Michigan is making progress in the perception of its business climate, Donofrio said, largely thanks to the $1 billion SOAR fund approved by the Legislative Assembly in December.

That money will fund incentives for businesses considering expanding in the state, as well as site preparation efforts when landlords — public or private — invest in infrastructure ahead of a construction contract by a company.