We don’t need to be 49th for another decade 4


Ron French writes in his terrific Bridge article on projected Michigan job growth from 2013-2023: “Bridge Magazine economic projections paint a Scrooge-like portrait of the state economy over the coming decade. But that’s just one possible future. In the Charles Dickens story, Scrooge is scared enough to change his ways. Is Michigan prepared to change?”

Exactly the right conclusion–– Michigan doesn’t have to be one of the worse states for job growth the next decade––and the right question. Because we won’t do better unless we dramatically change the course we are on.

French continues with what the needed change looks like to him: “It won’t be easy. For Snyder and other state leaders, it means facing some uncomfortable truths about Michigan’s future, and taking steps that might not always be popular in the short run. More money for education, starting with toddlers’ first steps and continuing until they walk across a stage with a college diploma. More money to repair and replace our crumbling roads and bridges over which new business and new residents must travel. More of a willingness to invest in the present, to stave off a Dickensian future.”

French interviewed Michigan State University economics professor Charles Ballard on the changes we need. The answer:

To Ballard, it includes investment in roads and schools. And by investment, he means taxes. “Tax cuts have overwhelmed all other policies for the past 20 years,” Ballard said. “You certainly don’t want to raise taxes and throw the money away. Nobody loves to pay taxes. But I’d be willing to pay more taxes for better roads. The expansion of early childhood (education), that’s one success. Education and fixing roads and bridges are very important in positioning ourselves for economic growth. But we have continued to have massive disinvestment in higher education.”

More public investments, which require higher taxes, is at the core of Michigan Future’s policy framework. (With being welcoming to all.) Three years ago in a post on what was likely to happen in 2011 I wrote:

… If 2011 is to be a start of a long term Michigan economic recovery it will be because Governor-elect Snyder gets us on the path to the Michigan 3.0 he promised in his campaign. The challenge is that most of the legislature that got elected with him campaigned on restoring Michigan 2.0. The decision we make on which direction to go is what matters most in 2011. It will go a long ways towards defining our economic future.

Move towards Michigan 3.0 and we can once again be one of the most prosperous places on the planet. Stay as Michigan 2.0 and we will continue to lag the nation. What appears to be the preeminent vision of a successful future Michigan is an economy still anchored by factories, farms and tourism. And a policy agenda to get us back to our past success largely through smaller government and weaker unions. If I had to predict where we will go in 2011 it is towards that vision and agenda.

But if we go in that direction I also predict it won’t work.

There are some hard truths that Michiganders needs to confront: Michigan’s prosperity in the last century was built primarily on good-paying, lower-education attainment jobs. Those jobs are gone forever. …  If the Michigan economy of the future is built on a base of factories, farms and tourism we will be a low-prosperity state. The world has changed fundamentally. We either adjust to the changes or we will continue to get poorer compared to the nation.

The alternative – Michigan 3.0 – is a Michigan concentrated in the knowledge-based sectors of the economy: health care, education, finance and insurance, professional and technical service and information. These are the fast growing and high wage sectors of the American economy today and tomorrow.

To get there requires first and foremost that Michiganders get better educated. Nearly all the states and regions with the highest incomes will be those with the highest proportion of adults with a four-year degree or more. The policy agenda to create Michigan 3.0 is focused on public investments in education and quality of place. With a particular emphasis on higher education and central cities. The first to prepare Michiganders for the economy of the future, the second to retain and attract mobile talent which increasing is choosing big metros anchored by vibrant central cities.

The Michigan turnaround, compared to the nation, will start only when we focus on improving our ranking of thirty fourth in college attainment. That is our fundamental challenge. Low education attainment regions and states will be low prosperity regions and states. We can do better! But it will require us letting go of what made us prosperous in the past and getting on a new path: one that is aligned with new realities.

Unfortunately the prediction that policy makers (Administration and legislature) would choose 2.0 and a policy agenda “to get us back to our past success largely through smaller government and weaker unions” turned out to be true. And by choosing that vision and agenda they have chosen to take us in the direction of slow job and personal income growth. Staying on that path is what leads to being 49th for another decade. Its time to get on a new path.

 

 

 


About Lou Glazer

Lou Glazer is President and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future’s mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. Its work is funded by Michigan foundations.


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4 thoughts on “We don’t need to be 49th for another decade

  • Dean Smith

    HI Lou, Your current topic and the contributions made by others hit the nail on the head. Our gate keepers, and a few others seem to have a hard time with this new vision.. you wonder what their educational background is that limits their looking more into the future. Then too there are powerful multiple sources that influencing legislative decisions for growth.

    • Lou Glazer Post author

      I agree that there are folks who interests are in protecting the old economy. And certainly there are those that prosper more if we have lower paid, rather than higher paid, jobs. But to me the biggest impediment continues to be a vision of economic success based on what made us prosperous in the past, that cannot work going forward no matter what our politics. And that vision is held pretty deeply here not just by political–of both parties– and business leadership but by the media and public as well. Unless that changes we are going to have a hard time doing what is needed not to be a national laggard over the long run.

  • Don

    Lou,
    Do you believe that some manufacturing jobs will evolve into “knowledge-based” jobs as manufacturing becomes more complex and automated? Is it possible that some automobile manufacturing and other manufacturing jobs will evolve into the types of jobs that are desirable for highly educated millennial people? Perhaps if we do develop the talent here in Michigan, those types of manufacturing jobs will tend to remain in Michigan, while many of the lower skilled (and lower payed) jobs will migrate elsewhere.

    • Lou Glazer Post author

      The trends are that lower skill/lower paid factory jobs will continue to be replaced by machines. but what jobs do remain my guess is Michigan will continue to have more of than the US as a whole. But they are going to be a small part of the economy. Think farming. In terms of knowledge-based manufacturing jobs they are going to be an even smaller part of the economy (not many jobs) but will pay well and might even employ more over time. I’m referring here to folks on the plant floor who maintain and program machines. Not engineers, designers, etc. who don’t work on the plant floor but who do work for companies that make things around the globe. Those are the jobs that are likely to grow. My guess is the skilled plant floor technicians will also be overconcentrated here compared to the country. But still a very small percentage of the Michigan workforce.