Michigan’s economy in the Top 10? Depends on the metric you are using


Those happy with Michigan’s recovery from the Great Recession like to proclaim that we are in the Top 10 again. Governor Rick Snyder said so a few days ago during a speech at the State of the State event in the Detroit Regional Chamber.

“We’re back,” an upbeat Snyder told his audience at the chamber event. “We are no longer 50 out of 50. We have an opportunity to reach No. 1.”

But this “Top 10” thing is tricky. By some metrics, Snyder and other optimists are right: Michigan, 10th among 50 states for population, ranks first for engineers per capita, seventh for manufacturing output, third for durable goods manufacturing. and sixth for patents granted to state residents.

It’s better this way. But by other measures, Michigan remains an intermediate performer or even a “bottom 10” state.

Forbes magazine recently listed its “Best States for Business” and ranked Michigan 28th on the list. Among the individual components on the Forbes list, Michigan’s best performance was 11th for “economic climate”; his worst was the 47th for “labor supply” – a reflection of Michigan’s “talent” problem that Amazon also cited when it left Detroit off its shortlist for its second headquarters .

For most of the 20th century, Michigan ranked as a national leader. He put the world on wheels, proudly served as the Arsenal of Democracy in WWII, and brought the joyous sounds of Motown music to America.

But when Michigan slipped in the early 2000s and saw its best economic players start to implode, the disgrace was painful.

Thus, the idea of ​​regaining glory, of regaining the status of leading state or the Top 10, has become an aspiration that business and civic leaders have embraced and nurtured as a goal.

“The Top 10 goal was adopted by a group of business leaders really at the heart of the ‘lost decade’,” the period when Michigan lost jobs for 10 consecutive years from 2001 to 2010, said the economic consultant Patrick Anderson of East Lansing. based at Anderson Economic Group.

“I remember we were talking about it and saying, ‘We need a goal that says we don’t just want to catch up with the average. We want to be a great state, ”he said.

Even as the Great Recession raged, the group of CEOs Business Leaders for Michigan, led by director Doug Rothwell and then-president David Brandon, along with consultant Anderson and others, officially adopted the statute. of Top 10 as a target.

The idea was to create both a goal and metrics to measure progress.

“We needed something that was conceptually sound, ambitious for the state, but reasonable, that we could accomplish if we think about it,” Anderson said.

“The business community and civic leaders have now accepted that we should aim to be a Top 10 state… Embracing this aspiration was important in itself. It was meaningful, it was achievable, and it was measurable.”

So how is Michigan doing? Today, ranking in the Top 10 remains as much a goal as an accomplishment.

Economic production

Ranked by total economic output, or gross domestic product, Michigan’s economy has fallen from ninth place among the 50 states in 2005 to 12th place today. Georgia, Massachusetts, and North Carolina all surpassed Michigan on a faster growth path in those years.

Two other states – Virginia and Washington – are now just behind Michigan and may soon drop the state to 14th place for the size of the state’s economy.

Per capita income

Charles Ballard, professor of economics at Michigan State University, suggests that the most important measure is per capita income. In 2016, the most recent year for which the government released data, Michigan ranked 30th out of 50 states, or 31st with the District of Columbia included.

“Let’s try not to think about our ranking in terms of road quality,” Ballard joked.

Economic growth

Michigan’s economic growth rate since the end of the recession has been excellent – the eighth overall among the 50 states. But Michigan’s economic growth rate in mid-2017 appears to have slowed, as it ranked 37th out of 50 states for quarter-to-quarter change in mid-year.

Unemployment rate

Michigan’s unemployment rate fell from over 14% during the recession to 4.8% in February of this year, a dramatic improvement indeed. But the state still lags behind the nation. That’s the 4.8% unemployment rate in February ranked 42nd among states.

Educational level

Michigan’s education level remains below average. With about 27% of the state’s residents with a bachelor’s degree or above, Michigan ranks 34th among the 50 states.

Perhaps most disturbing, test results show that just over half of the state’s third-graders failed the reading test on the statewide assessment test l ‘last year.

This deplorable performance will return to Michigan in the years to come, as ill-prepared young people enter the workforce.

“A continuing disappointment, and in some places outright tragedy, is the performance of our K-12 education system,” Anderson said. “There’s no sugar coating in there, and it’s not due to fluctuations in money or the political leaders we elected. We’re falling behind on that and that’s a problem. serious.”

No single measure can capture everything we have to say about Michigan. The image is more of a mosaic, with a thousand pieces coming together to create an overall image.

There is no doubt that Michigan has recovered impressively from the depths of the recession. But everyone admits, or should do, that we have a long way to go.

Snyder himself acknowledged the challenges ahead, especially in the talent arena, in his remarks to the House audience.

“You cannot be complacent,” he said. “You cannot be satisfied. You can’t take anything for granted.

That’s right. Or as Anderson says, “If you don’t have a goal, you’re not going anywhere.”

Contact John Gallagher: 313-222-5173 or [email protected] Follow him on Twitter @jgallagherfreep.