Michigan's job market is stabilizing, University of Michigan economists say
Michigan is no longer hemorrhaging jobs.
In fact, Michigan's economy is stabilizing, and the state is expected to add jobs in 2011 for the first time in more than a decade, University of Michigan economists projected in a forecast released this morning.
U-M economists estimated the state will add 24,500 jobs in 2011 and 63,000 in 2012. That follows losses of 17,000 in 2010, 230,000 in 2009 and some 850,000 since 2000.
The forecasters project that the state's unemployment rate will average 12.4 percent in 2011 and 11.5 percent in 2012. The average rate in 2010 is expected to be recorded as 13.4 percent. In 2009, Michigan's largest single year of job losses in 70 years, the unemployment rate was 14.4 percent.
The unemployment rate is expected to decline each of the next eight quarters, dropping from 12.68 percent in the fourth quarter of 2010 to 11.17 in the fourth quarter of 2012.
"The heartbeat of the Michigan economy seems to be getting a little stronger," U-M economist George Fulton said. "We haven't yet turned the corner to sustained growth, but the prognosis is encouraging."
Fulton cautioned that he's not projecting a vibrant recovery.
"It does not mean that the economy is back to normal," he said. "For many residents, the economic struggles will continue."
Fueling the gradual turnaround, in part, is a return to viability for the major automakers, symbolized by General Motors' initial public offering Thursday.
The transportation equipment manufacturing sector is expected to add 3,000 jobs in 2010, 1,000 jobs in 2011 and 4,000 in 2012, U-M projects. Michigan's manufacturing sector lost 100,000 jobs in 2009 alone, a figure that illustrates the market's rapid stabilization.
University of Michigan economist George Fulton
Melanie Maxwell | AnnArbor.com
That stability is driven in part by a recovery in the auto sales market. Total U.S. vehicle sales are projected at 11.5 million in 2010, 12.7 million in 2011 and 14.8 million in 2012.
The auto industry and general manufacturing remain critical to a healthy job market in Michigan, but are no longer big enough to lead a wholesale turnaround. In 2010, manufacturing of all types accounts for about 463,000 jobs in a total labor force of 4.84 million, U-M estimated.
Most of Michigan's job growth over the next two years will occur in the professional and business services sector, private education and health care. The education and health services industry will gain 22,800 jobs from 2010 to 2012, and the professional and business services sector will add 14,300, the economists projected.
The government -- a wide-ranging sector that includes jobs at public universities, for example -- is expected to lose 10,000 jobs over the next two years, according to projections.
For a "more robust economy," Michigan must pursue an "entrepreneurial economy," Fulton said.
"It comes down to anticipating what will make Michigan more attractive to industries that will expect to thrive in the 21st century," he said. "Intuition and conventional wisdom suggest that a cluster of active and successful research and development activities will help draw in the industries of the future.
"An increased agglomeration of such activities in the region will promote the cultivation and sharing of scientific ideas, putting Michigan on the road to becoming the kind of state that it aspires to be."
Those research-intensive industries would boost Michigan's per-capita income, which has fallen over the last decade as the employment market plummeted.
Michigan’s per-capita income is now 81.4 percent of the U.S. rate, compared to 95.3 percent in 1990 and 96.2 percent in 2000.
The average Michigan manufacturing worker earns 34.4 percent more than the average Michigan worker.
Personal income for Michigan workers will increase 1.8 percent in 2010, 2 percent in 2011 and 3.8 percent in 2012, according to projections. Income fell 3.1 percent in 2009.
Michiganders' real disposable income growth -- a calculation that factors inflation and tax changes -- will rise 1.1 percent in 2010, 0.6 percent in 2011 and 1.9 percent in 2012.
The U-M forecast reflects a much more positive outlook than the economists projected in late 2009. Last year, they predicted that Michigan's unemployment rate would top 15 percent in 2010 and 2011.
Fulton attributed the improved outlook mostly to a quick turnaround for the auto industry.
Elements that could affect the forecast's accuracy include the stability of the national economy, the continuation of the auto industry's recovery and additional troubles in the housing market, Fulton said.
Fulton also suggested that some of the new jobs in Michigan won't be great positions. He suggested that, for example, employers might start to rely more on so-called temporary employees.
"I’m wondering - and this is just wondering - if, in fact, our environment is shifting and that more of those temporaries won’t be temporary temporaries, they’ll be permanent temporaries," Fulton said.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
CynicA2
Sat, Nov 20, 2010 : 11:35 p.m.
"Im wondering - and this is just wondering - if, in fact, our environment is shifting and that more of those temporaries wont be temporary temporaries, theyll be permanent temporaries," Fulton said. Everything is "temporary" in this economic environment. Some are just more temporary than others. Even the Titanic eventually hit bottom, and like the Titanic, Michigan's economy will likely remain underwater for quite some time. Blub... blub... blub.
sh1
Sat, Nov 20, 2010 : 12:42 p.m.
Unions created the middle class. Get rid of them and you'll see what happens.
Do not taunt Happy Fun Ball
Sat, Nov 20, 2010 : 9:47 a.m.
What is amazing is how many major manufacturing plants have opened in the US over the past 20 years, but Not in Michigan. Now why is that?? All those lost jobs. All that lost investment. All that lost tax revenue. All those supporting jobs and supporting companies. All lost to Kentucky, Alabama, South Carolina, Mississippi, etc etc. Of the last 25 massive auto plants to open in the USA, perhaps 1 has opened in a Union state. Unions are the anti-jobs, anti-opportunity, anti-business, anti-development State program. Which State would you invest your 10 billion dollars and 20 years time?. Money is mobile. Think about it?
Marshall Applewhite
Fri, Nov 19, 2010 : 10:49 p.m.
sh1, Because the inability of unions to be flexible is what caused many of these problems in the first place.
sh1
Fri, Nov 19, 2010 : 8:58 p.m.
Why do working people hate unions so much? It's What's the Matter with Kansas? all over again.
katie
Fri, Nov 19, 2010 : 8:47 p.m.
We are undergoing a structural change in the economy, not only in Michigan but in the global economy. Look at all the countries that are in trouble. The good old days will never come back.
f4phantomII
Fri, Nov 19, 2010 : 4:48 p.m.
Recession over? Say it often enough and eventually you'll be right.
Cash
Fri, Nov 19, 2010 : 4:48 p.m.
jondhall, Janet......um....who the heck is Janet? I am glad however that Jennifer Granholm took the lead and now we see the improvement. Too bad it wasn't "noted" before the election and the job killer takes over. Don't suppose this information was withheld for some sinister reason do you?
RBW5
Fri, Nov 19, 2010 : 3:59 p.m.
We have to start somewhere. The high paying manufacturing jobs with massive benefits packages are a thing of the past, unfortunately for many. At least we aren't in Nevada.
Marshall Applewhite
Fri, Nov 19, 2010 : 2:19 p.m.
scooter dog, Because the "paper" isn't the best place to look for a job anymore, perhaps?
scooter dog
Fri, Nov 19, 2010 : 12:31 p.m.
Dream on,try living on sub $10.00 per hr with zero benefits. If the job market is subsideing why are there almost zero jobs in the paper. Sounds like some misguided info put out too look good on paper. Truth is nobody is hireing for anything unless your into minimum wage. With gas pushing $3.00 a gal everything you make goes in the gas tank.
watchingypsi
Fri, Nov 19, 2010 : 12:15 p.m.
I wasn't talking about the salaries of union or manufacturing positions. I was talking about the white collar, "knowledge" positions that 81wolverine spoke about in the comment written above. I have been underemployed/unemployed on and off in the office management field for 5 years, and I have witnessed the trend of lower wages first hand. I have seen the hourly salary of $15-20 for an office management position (in 2005) drop to $8-$12 per hour for the exact same position in 2010. That is only one example, there are many more. (Skilled trades are equally hurt by wage reduction. Ask any skilled carpenter or construction worker.)
goingfast3579
Fri, Nov 19, 2010 : 12:07 p.m.
OK, Can someone tell me where to get an app. I have to make $10.00 an hr. and need Insurance.
81wolverine
Fri, Nov 19, 2010 : 11:53 a.m.
At least this is a glimmer of good economic news for the state. But you wonder how many of those 850,000 people who lost jobs left the state. Many were probably very bright people who will not come back. Also, the Michigan per-capita income statistic that we're 81.4% of the overall U.S. rate is very sobering. That tells me we have a lot of workers in the service industry and doing manufacturing work, and not as many white collar "knowledge" type of jobs. That's something Snyder and his economic team have to find a solution for. Creating more manufacturing jobs to employ Michigan unemployed workers is a short term solution. But, long term, the state needs to encourage and help create more higher income, "knowledge" based jobs. Just my opinion.
jondhall
Fri, Nov 19, 2010 : 11:28 a.m.
Janet is / was the problem not a solution she should move back to Canada, but I'll bet Obama finds a place for her! Two to one odds on it! I think this turnaround is because we have two worthless US Senators, that to will change soon.
Peter
Fri, Nov 19, 2010 : 10:51 a.m.
It must have been granholm that has rejuvenated the michigan economy! When you cave into the union demands, that tends to help a failing industry, right?
LBH
Fri, Nov 19, 2010 : 10:09 a.m.
@watchingypsi union protected jobs with bloated salaries, over time, job protection, and Cadillac insurance plans are gone and weren't sustainable or they wouldn't be gone. Even if you take away the incredibly wretched business planning of GM and Chrysler, they were smothering under the weight of these plans. Those days are over and we need to realize it and figure out how to move on.
LBH
Fri, Nov 19, 2010 : 10:04 a.m.
So, in spite of having to do battle with the party of 'NO', the Michigan economy is turning around. We will soon be hearing from the newly elected about how this was all their doing, even those who weren't there at the time. Wait for it... it's coming.
watchingypsi
Fri, Nov 19, 2010 : 10:02 a.m.
Hate to be a Debbie Downer but these "jobs" pay about 65% of what the same jobs would have paid five years ago in Michigan. We must also consider that many jobs don't offer any health benefits. Just take a minute to look at the few job postings on craigslist and you will find business management positions for $10.00 an hour, no benefits.