Unemployment and the labor force

From a peak of 13.7 percent in 2009, Michigan’s jobless rate had fallen to 4.1 percent last year, where it has roughly remained, according to the Michigan Department of Technology, Management and Budget.

“It’s still amazing to me that we have done as well as we have done,” said Don Grimes, senior research specialist at the University of Michigan’s Research Seminar in Quantitative Economics. “I don’t think people quite appreciate how deep a hole we found ourselves in, in 2009 and 2010 — a structural hole, not just a business cycle downturn.”

Dye, of Comerica Bank, said he thinks unemployment in Michigan has likely reached its low point and will begin to edge higher.

Yet the unemployment rate alone doesn’t paint a complete picture about how many people are without a job. The official rate includes only those who are unemployed, available to work and have actively looked for a job in the past four weeks. People who don’t have a job but haven’t looked for work are considered to be out of the labor force and not counted among the unemployed.

Michigan’s jobless rate would be 7.6 percent through the first quarter of this year if it were to include workers who had looked for a job in the last year and people employed fewer than 35 hours a week but can’t find a full-time job despite wanting one. That’s the same as the national rate. Among Michigan’s neighbors, only Illinois and Ohio are higher.

Bruce Weaver, a DTMB economic analyst, said the state’s labor force generally has grown more slowly than the rest of the nation. The labor force rate is at least partly based on population growth, Weaver said, which has been slower in Michigan than the U.S. rate.

More than 40 percent of Michigan households in 2017 were impoverished or struggled to afford basic needs from housing to child care, according to a study of the working poor released this year by the Michigan Association of United Ways.

Many Michiganders continue to work more than one job to make ends meet, and often part-time jobs don’t offer employer-sponsored health insurance, said Gilda Jacobs, president and CEO of the Michigan League for Public Policy, which advocates for policies that support vulnerable residents.

The shift from a goods-producing economy toward an information-based one has made it more difficult for people with low educational attainment or few of the skills required for today’s in-demand jobs to earn a higher wage, she said.

“The recovery just hasn’t worked for everybody, and a lot of people that are in some of those jobs that they’re cobbling together two or three don’t have the skill set that they need to get the higher-paid jobs,” Jacobs said. “We need to make certain that with this economic recovery, that there’s a path for everybody to be able to get out of low-paying jobs into jobs that pay more.”

Jobs

Michigan is still climbing out of the hole it fell into during the 2000s.

By the middle of 2009, after the official end of the Great Recession, the state had shed more than 859,000 jobs from its peak in 2000.

We’ve made up a lot of ground. But we’re not yet above ground: By 2021, economists at the University of Michigan predict Michigan will only have regained 80 percent of the jobs it lost since 2000, or about 688,000.

It’s possible the state might never get all of them back.

Several economists said Michigan’s demographics are working against it. The state’s population is getting older, and Michigan will need an influx of younger, working-age residents — either moving into Michigan or staying in Michigan after college — to draw more people into the workforce.

More people continue to leave Michigan than move in, due to retirees seeking warmer climates and lower-tax states, as well as displacement of manufacturing jobs during the recession.

This outbound trend is “a fundamental drag on a state economy,” Dye said.

Though two positive trends are worth noting. First, Michigan’s population losses to other states have largely abated, down from nearly 100,000 net losses a decade ago, with far fewer leaving than earlier this decade.

Second, the state’s overall population is again growing, if slowly, after a decade in which Michigan was the only state to lose population.

Michigan should focus on attracting and keeping talented young workers and college graduates in the state to boost its labor force, Dye said.

Michigan has enjoyed robust job growth since 2011, though the pace of jobs added each year has been slowing ever since, according to federal data.