Our Editorial: Michigan growing, but not fast enough
Michigan has regained 400,000 jobs over the past five years, roughly half what was lost during the Lost Decade at the start of this century. Its economy is growing along with employment, and its business climate ranking has strengthened.
It has come a long way. There is still a long way to go. The state must not become complacent with the progress it has made, and more critically, it must not backslide on the reforms and discipline that made growth possible.
That’s the message of the Business Leaders for Michigan’s 2015 Economic Competitiveness Benchmarking report, released Thursday.
There is plenty of good news in the report, and it is certainly a solid indication that Michigan is heading in the right direction. But there are also some sobering reminders that the job of recovery is not anywhere near finished.
First the good news. Michigan ranks 10th in corporate business climate, and 13th in overall business climate. That’s a positive indicator of future growth.
The state’s population is growing, if slowly. That reverses a decade-long trend of decline. More jobs are being created in high-skill, high-wage industries, such as advanced manufacturing. Its rate of growth is outpacing nearly every other state.
It needs to, because of the depth to which Michigan had fallen.
The bad news is that in real terms, Michigan remains a bottom tier state, ranking 36th overall in per capita income, 34th in per capita gross domestic product (GDP), 31st in entrepreneurial activity, 28th in economic development expenditures and 29th in electrical costs.
Moving into the Top Ten in every category will require a sustained and focused commitment.
One major obstacle blocking Michigan’s progress is the poor performance of its education system. The state ranks 31st in educational attainment. Its residents are not getting the education and skills they need to compete in a high-tech economy.
Reforming education has been a priority for 20 years or more, but the efforts have not produced results, largely because there has not been unity in how to attack the problem. Agreeing on a strategy for making schools better is the first big step in competing with the most economically successful states.
An urgent effort is necessary to upgrade skills of those workers who aren’t prepared for available jobs. Greater support of community colleges is essential to toppling this obstacle.
Infrastructure also lags. Urban road conditions are 39th worst in the nation — actually it’s a surprise that they aren’t 50th. The road funding package passed this month will help a little, but its slow roll out assures it won’t have a meaningful impact for years to come. Roads are just one need; water and sewer systems are also in serious need of upgrading. The state can not compete with a broken infrastructure.
The explosive growth Michigan requires depends on cohesion. All areas of the state must cooperate in attracting jobs and development, and industries must exploit ways to work together.
Finally, Michigan must resist the temptation to undo the reforms that got it growing again. Currently, some labor unions are circulating petitions for a ballot initiative that would sharply raise the corporate income tax, a move that would destroy the state’s business climate rankings.
Michigan is growing again. It needs to grow faster. That should be the single-minded focus of the entire state.