Detroit, Michigan - Economic Plight

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The Detroit-Warren-Livonia region in the state of Michigan had an unemployment rate of 6.7% as of April 2007, slightly lower than the 6.9% posted in March 2007. (The last time the region had a 6.7% unemployment rate was in April 2006.) The region, which makes up the biggest labor market area in Michigan, posted a 0.4% decrease in employment from April 2006 to April 2007.

For the state itself, payroll employment shrunk by 4,600 jobs as of April 2007. This contributed to the increase in the unemployment rate of Michigan to the 7.1% mark.

Detroit saw its consumer price index increase by 1.6% from April 2006 to April 2007, rising in tandem with the 2.6% rise in the country’s consumer price index over the same period. Detroit is expected to have a consumer price index of 2.0% by 2008.

More people moved out of state from Michigan as of 2006 than from any other area. Among the states, Michigan was the 49th as far as retaining young adults is concerned. It also lagged behind other states (was 51st) based on the growth of home values in 2006. The state did not fare much better as far as its per capita Gross State Product growth was concerned – it only made the 50th slot and produced a 1.1% change in Gross State Product. Tourism was not very good either as Michigan ranked just 50th in the country based on hotel occupancy. The state’s per capita income growth from 1994 to 2004 placed the country at the 48th slot among the states.

CEOs surveyed throughout the United States do not have much confidence in Michigan as a business center, since they listed it as the 49th best state to operate in. The state has the nation’s 5th highest business tax burden and is the 10th most expensive state to conduct business in. This may explain why Michigan is ranked 49th based on competitiveness of business tax climates. The national hiring rate would have been at 13% for 2006 (rather than the approximately 5% nationwide level) had Michigan not dragged down the numbers.

Of the 10 worst-performing cities in the United States, five can be found in Michigan. Just 4% of the small businesses operating within the state perceive it as ‘supportive’.

But lately, Michigan has seen a burst of economic activity, particularly in the emerging technology fields within Metro Detroit – these include life sciences, information technology, and advanced manufacturing. As far as high tech employment is concerned, Michigan has 568,000 workers which boosted the state’s ranking to 4th nationwide. (This is inclusive of 70,000 who man the automotive industry.) Total Research & Expenditures for the country places Michigan in the 2nd or 3rd slot. Engineering job openings proliferate in Metro Detroit - the domestic auto industry (which directly and indirectly contributes to 1 out of 10 jobs in the country) keeps its headquarters within the city.

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Article Custom Written/compiled for Job Service Help by Mabelle Sese of The Filipino Worker Company. Updated June, 18, 2007