Better than ever, even if it’s not like that
Michigan’s economy may be back. But one thing is not: paychecks.
âMichigan’s economy is bigger than it has ever been. It may not sound like it, but it is, âsaid Charles Ballard, an economist at Michigan State University.
This is because, despite all the economic growth, the jobs that come back often pay less than the jobs they replaced. Michigan household income of $ 52,492 now ranks 34th in the country, below the national average of $ 57,616. Michigan ranked 24th in 2006.
Related: Michigan’s business climate is improving, but educated workforce is shrinking
Governor’s favorites – Republican Bill Schuette and Democrat Gretchen Whitmer – agreed that stagnant wage growth is a significant concern and leaves many feeling left out of the recovery.
“Too many people have two or three jobs just to get by when they need a good job, âWhitmer wrote in an email to Bridge.
Schuette said “we have to do better”.
âMichigan has made progress since the trough of Jennifer Granholm’s lost decade, but because of our bad situation,â he wrote in a statement to Bridge.
And although everyone from economists to Michigan gubernatorial candidates says the key to a healthy economy is diversification, Michigan is still more dependent on manufacturing jobs than it was before the recession. .
Manufacturing accounts for 19 percent of Michigan’s economic output, compared to 11.8 percent nationally.
Nationally, the finance, insurance and real estate sector is the largest sector in the country, comprising more than a fifth of the economy (in Michigan it is No. 2, at nearly 18 percent).
They’re relatively similar, in terms of size, but nationally, the industry grew almost 32% from 2001 to 2016, and only 8% in Michigan.
âIn theory, you don’t need to be diverse – if you plan when you’re not getting into gangbusters,â said David Brasington, an economist at the University of Cincinnati.
But how? Diversifying an economy is not easy.
âI think diversity happens by historical accident,â Brasington said. Engineers can come for an industry, he said, and discover another process that spawns a new industry.
To think that the city council or state legislature can take steps to create a more diverse economy – build an office park, offer incentives – might be a fantasy. The state has distributed millions of tax credits to attract the film industry. But he left town when the tax breaks disappeared.
And when times are good, no one seems to worry about economic diversity.
âWhen the auto industry is doing well, people take attention off the ball,â Traub said.