In a recent column, I argued that Michigan needs to switch from a business-focused economic development strategy to one centered on expanding its workforce.
The reason is pretty simple. Michigan, like other northern states, is growing older and running out of workers.
Deaths outpace births in the state in 2020 and 2021, according to the latest data from the Michigan Department of Health and Human Services. Those were the first years that deaths exceeded births in more than a century.
Michigan’s population has fallen in the past two years to just over 10 million, about the same number of people living in the state 20 years ago. Michigan was the 13th oldest state in the country in 2021 with a median age of 39.7 years.
And far too many working-age Michiganders have dropped out of the labor force for reasons ranging from the lack of childcare to workers taking early retirement during the COVID pandemic and not returning.
Michigan’s November labor force percentage rate was 59.9%, the 40th lowest in the country. That rate is the percentage of working-age adults who are employed or looking for work.
Meanwhile the state’s employers are struggling to find enough workers, from restaurant servers to automotive engineers.
There were nearly 250,000 online job advertisements posted by employers in Michigan last October, about 100,000 more than in January 2000, several months before the COVID pandemic took hold in the state.
“Michigan’s economic future faces a major hurdle in the form of a slow-growing and aging population,” University of Michigan economists Gabriel Ehrlich, Jacob Burton, Donald Grimes and Michael McWilliams wrote in their November economic forecast.
But what does a comprehensive people- and talent-centered economic development strategy look like?
It starts, not surprisingly, with improving the state’s lagging education system. A disturbing new study by the Education Trust-Midwest found that Michigan ranked seventh-worst in the nation for fourth-grade reading scores.
The group warned that critical reading scores will remain stagnant through 2030 unless “dramatic, research-backed changes are made” to the state’s public education system.
Boosting student performance in Michigan’s K-12 system is even more important than focusing on raising the number of college graduates in the state, said Charles Ballard, emeritus professor of economics at Michigan State University.
That’s because there are too many high school graduates who are not prepared for college work, especially math, he told me. Math competency is particularly important for success in an increasingly technological economy.
Ballard said the school year should be lengthened by several weeks to help students regain learning loss during COVID. And a high school diploma should mean what it says.
“If I could do only one thing, it would be to get to the point where every child gets a high-school diploma, and where a high-school diploma means that the child has a 12th-grade education,” said Ballard, an expert on Michigan’s economy.
More college-ready students could produce additional residents with post-high school skill certificates and college degrees to fill good-paying jobs. Michigan ranks 30th in the percentage of adults with a bachelor’s degree or above.
States that have a high percentage of residents with at least a bachelor’s degree tend to be more affluent than those with lower educational attainment rates.
A recent study by the Millken Institute found the most prosperous states last year, in order, were Massachusetts, Connecticut, Minnesota, New Hampshire and Utah. All have much higher educational attainment rates than Michigan, which ranked 29th.
Gov. Gretchen Whitmer is addressing the issue in a variety of ways, including boosting operational support for the state’s 15 public universities, and creating college scholarships of $2,750 a year to attend a community college and $5,500 annually to attend a public university.
Michigan doesn’t just need smarter workers; it needs more of them. Attracting new residents will take a variety of strategies, including becoming more welcoming, improving the quality of life in its communities and helping lower-income people improve their economic prospects.
Some of the most vibrant areas of the country are focusing on transit to help connect people to jobs and attract talent. That’s an area in which Michigan is lagging competitors, despite boasting that it’s “the undisputed global capital of mobility.”
Some of the most vibrant areas of the country are focusing on transit to help connect people to jobs and attract talent. That’s an area in which Michigan is lagging competitors.
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Voters in booming Austin, Texas, voted in 2020 to approve $7 billion (yep, with a “B”) to build more bus and rail lines in the city.
Metro Minneapolis, which has one of the best transit systems in the country, is aiming to become the “bus rapid transit capital of North America.” Denver, Boston and other talent magnets are offering electric bike purchase rebates.
With Democrat control of state government for the first time in nearly 40 years, Michigan has a golden opportunity to become a much stronger competitor for new residents and workers.
The Democrats appear up to the challenge. In their first day on the job, Democratic lawmakers introduced a variety of bills that could make Michigan a more vibrant, welcoming state.
Included among them are measures that would strengthen women’s reproductive rights, increase a tax credit to aid working families, and add anti-discrimination protections based on sexual orientation and gender identity in the state’s civil rights law.
There’s much more work to be done, but the Democrats’ people-based focus on boosting the economy is energizing.
Originally published by Michigan Advance. It is republished with permission.
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