Election Watch
February 2004

Focus: Michigan Jobs
2004 Term-limited House Members

Focus: Michigan Jobs

Although the most recent recession officially ended in March of 2001, the national and Michigan economies have continued to see job loss. During the 1980s and 1990s, a 1 percent drop in GDP corresponded to a dip in employment of 1.3 to 1.5 percent. In the latest recession, GDP dropped only one half of one percent, but the economy lost nearly 3 percent of jobs.

The loss of manufacturing jobs disproportionately affects the Michigan economy. Nationally, the percentage of people working in the manufacturing industry is 13 percent, but in the state of Michigan that percentage rises to 20 percent. Between the beginning of 2001 and the end of 2002, the United States lost 2 million manufacturing jobs. Over 100,000 of those jobs were in Michigan. From January 2001 through December 2003, Michigan lost over 115,000 manufacturing jobs, almost a 14 percent loss of jobs in the sector.

Manufacturing jobs are not only disappearing because of the recession; productivity gains are also edging out jobs. Over the past decade, the average increase in productivity has risen more than 3 percent, twice the average rate of the previous two decades. Coupled with an annual increase of 1 percent in the labor force, the economy would have to grow at a rate of 5 percent a year in order for payrolls to expand. This, however, has not been the case. In most industries, fewer workers simply make more products. Steel production, for example, has increased more than 35 percent in the past two decades, but the number of steelworks has dropped by almost 75 percent.

The most recent Michigan unemployment rate (December 2003) stands at 7.2 percent, the highest rate since 1993. Nationally the unemployment rate was 5.7 percent. National job creation continues to lag during the current recovery, and Michigan employment recovery tends to trail national employment recovery after the end of recessions. Additionally, the unemployment rate does not include the large number of long-term unemployed—those who are considered to have “dropped out” of the work force—or part-time workers who would prefer to be working full time, estimated to be nearly 20 percent of part-time workers.

Unemployment Rate Michigan and United States, 1985–2003*

SOURCES: Bureau of Labor Statistics and Michigan Office of Labor Market Information. *All numbers are from the month of January, except 2003, which uses December 2002 numbers.

 

2004 Term-Limited House Members

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