Editorial: Michigan jobless rate shows economic growth
At 5 percent, Michigan’s unemployment rate has fallen below the national average, currently 5.1 percent, for the first time in a decade and a half. The news is a welcome part of Michigan’s effort to recover from the Lost Decade. And although it signals some growth, there’s more to do.
Michigan was the only state to suffer its own local recession beginning around 2000, with the decline of the Detroit auto industry. The local economic distress was compounded with a nationwide Great Recession immediately following.
The fierce economic downturn of the early 2000s forced many people, particularly young people, out of the state, commonly called the Michigan brain drain.
From 2003 to 2014, about 628,000 people left the state, according to the American Legislative Exchange Council’s Rich States, Poor States.
Over that same period, the state came in dead last in the economic performance ranking of the 50 states.
Similarly, Michigan ranked 50th for growth in charitable giving from 1997 to 2012, again likely due to the downturn in economic activity, even as charitable giving rose 47 percent throughout the rest of the country over that same period.
For those who remained in the state — or were otherwise dependent on its success — those dark years were insufferable.
But the jobless rate has consistently decreased for some time now.
In September 2014, the unemployment rate was 6.7 percent. For the most part, the rate has steadily decreased every month this year, starting with 6.3 percent in January and decreasing to the current 5 percent, with a slight .01 percent increase in May and June.
While it’s worth noting the state lost 9,800 jobs this September, along with 26 other states that also reported job losses, according to the U.S. Labor Department, there has been real job growth in the state over the past year.
About 90,000 private sector jobs have been added in Michigan since this time last year, due to several factors.
The state changed how it treats businesses, certainly removing some of the barriers to growth erected during the Granholm era. Repealing the onerous Michigan Business Tax in 2011 returned more than $1.5 billion to job creators in the state, replacing it with a flat 6 percent corporate income tax.
Repealing the personal property tax — which virtually every business in the state loathed — has opened up businesses to invest more in their growth rather than being penalized for it.
The steady revitalization of Detroit and reinvestment in the city’s core industries of manufacturing and automotive production have also helped. Detroit’s Big Three are more profitable than they’ve been in quite some time.
Detroit itself is bustling with new small- and mid-sized businesses, which city government has, to its credit, encouraged.
Still, average household incomes are stagnant statewide, and there are still almost a half million fewer people working in the state today than in 2000.
The state must continue to embrace new job opportunities to make its economic growth tangible.