Utah economy

Michigan economy still struggles to compete with other states, study shows

Michigan business leaders released their updated benchmarking report this week comparing Michigan’s performance to the top 10 states. While the state has made significant gains since the Great Recession, rising from 49th to 29th place, statistics show that Michigan is struggling to grow faster than other states.

Michigan Business Leaders President and CEO Jeff Donofrio said, “Michigan is much better off and has come a long way since 2009. However, despite 10 years of economic growth before COVID-19 , we struggle to grow faster than our competitors. . As we continue to see economic disruption from the pandemic, talent shortages, and shifts in our economy, including toward vehicle electrification and advanced mobility, it’s even more critical that we examine Michigan’s competitiveness. and that we ensure that in the decades to come, we focus on investments and equities. that stimulate growth.

The State-by-State Analysis of Michigan Business Leaders includes an expanded set of benchmark metrics, along with a growth gauge, to determine where Michigan stands nationally in these rapidly changing competitive conditions. , and where it might be headed. Business leader data includes its traditional output measures such as GDP, median household income and perception of business climate, and adds indicators of economic growth and health such as education, participation in labor market, net migration, poverty and business creation. These updated metrics provide a more holistic view of the success of all Michiganders rather than just a snapshot of the state’s economy.

Benchmarking allows business leaders and policy makers to focus on Michigan’s strengths and weaknesses to develop specific data-driven solutions that will help Michigan residents, businesses and communities compete and to gain jobs, income and growth. The states currently in the Top 10 are Utah, Washington, Colorado, Texas, Massachusetts, Virginia, California, Oregon, Florida and Arizona.


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Donofrio said: “Recent bipartisan economic development legislation is exactly the kind of continued action we need. We are at a unique moment in our history. Rarely do we have both economic uncertainty and a unique opportunity to invest in our future,”

Donofrio continued: “We need smart investments in the coming months and consistent long-term strategies focused on decades-long growth that won’t fall apart depending on who is in power. Systemic and sustained changes, including in workforce and talent development and customer service, are needed to change our trajectory from an average state to a Top 10.”

Other states surpass Michigan in a number of growth metrics. For example, while the country as a whole has seen a decline in labor force participation over the past three years, Michigan’s decline was greater than that of the top 10 states (-2.7% for Michigan vs. – 1.1% for the top 10). And, while the educational attainment rate has climbed at a slightly faster rate than the top 10 states (5.4% vs. 5.2%), more work needs to be done to close the gap. Actions taken so far include strong bipartisan action to invest in training and degree programs and setting a target of having 60% of the working-age population with a degree or credential by 2030.

Business leaders for Michigan’s eight key indicators provide insight into what it takes to be a Top 10 state and Michigan’s ranking for each (three-year growth ranking shows Michigan’s pace of change over the past three years compared to all other states):

The data shows that the top 10 states have fundamental strengths in two areas: 1) Education and talent – ​​which is correlated with higher labor force participation, lower poverty rates and median income households higher; and 2) economic growth – which is correlated with higher net migration and the creation of new businesses.

Based on the benchmarking, Business Leaders for Michigan identified the following areas of opportunity for Michigan:

Develop talent

Significantly increase degree and degree growth – Use American Rescue Plan Act (ARPA) funding to outpace other states in degree growth, attract talent to the state
Removing Barriers to Work – Stimulating additional labor force participation by removing barriers to work with investments in childcare, broadband access, and affordable housing, among others

Improving our education system

Implement systemic improvements to the K-12 system that balance results, resources and accountability. Use ARPA funding to increase efficiency, invest more money in the classroom for years to come, expand teacher training and recruitment, and invest in before/after school support programs and summer learning
Invest in growth

Implement a long-term economic development strategy focused on improving our competitiveness in four areas: site development, customer service, incentives and talent

Use one-time funds from the American Rescue Plan Act for: regional economic development, matching funds for site development, transition to electric vehicles, and support for entrepreneurship/innovation/upgrading activities. the scale

Workforce training programs that fill talent gaps preventing business growth, support new jobs/locations and provide career progression pathways

When crafting additional measures to spur growth, Michigan should look to the successes of other states. Tennessee has fallen from 34th to 16th place in the past five years, thanks to improvements to its community college system, universal free tuition programs, decades of investments in economic development and the site and its leadership’s focus on developing more emerging industries.

“States have been investing for years to attract businesses, jobs and talent – ​​and many states that are not in the Top 10 today are well ahead of Michigan when it comes to investing to future growth. We can learn valuable lessons from this,” Donofrio said. “Unless Michigan urgently addresses our economic and educational challenges, we risk falling so far behind that we can never catch up. If we invest and work today to overcome these challenges, we can build a prosperous state with a healthy economy and widely shared prosperity.

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Mary Cashion

The author Mary Cashion