Michigan's steadier job growth reason for optimism

Michigan has regained more than 151,000 jobs since the number of working residents fell to a recessionary low in mid-2009, a steady climb that began under Democratic Gov. Jennifer Granholm and has continued under Republican Gov. Rick Snyder.

Still, even as the state has seen its unemployment rate drop from a peak of 14.2 percent in August 2009 to 9 percent in January, economists say Michigan still has a long way to go to recover the 857,000 jobs lost between the April 2000 employment peak — when the jobless rate was just 3.4 percent — and the trough the state hit two years ago. As of January, over 700,000 remained unrecovered.

Yet the sense is growing that Michigan — finally — may be over the decade-long slump that Snyder says left residents divided and far too discouraged about the state's advantages and ability to recover. Michigan residents are giving both the Republican governor and Democratic President Barack Obama higher job approval ratings as the economic climate improves. But a sense of caution remains.

"We have been busy reinventing Michigan, breaking some bad habits of the past and embracing new opportunities for our future," Snyder told German company officials during a weeklong trade trip that resulted in a German orchid grower announcing it would open a 30,000-square-foot facility in Kalamazoo. "To those of you looking to expand your global presence or enter the North American market, Michigan is the place to be."

Rick Waclawek, director of the state's Bureau of Labor Market Information and Strategic Initiatives, has followed the long slump and slow recovery.

"We've been able to increase our employment after nine or 10 years where we were losing employment in Michigan," he said. "As far as job growth, we are one of the leaders in the nation, on a percentage basis."

He still sees areas of concern. Although the February unemployment rate, due out Wednesday, could continue the steady improvement the state has seen over the past four months, the percentage of discouraged workers or those working only part-time when they want to work full-time averaged 18.3 percent in Michigan in 2011, according to the federal Bureau of Labor Statistics.

"There's still that nagging unemployment level, particularly the long-term unemployed," Waclawek said. "That's probably the thing we need to be focused on, to make sure that we develop some (training) opportunities, jobs for the long-term unemployed."

To help students and workers find out information about careers, educational and training opportunities and job openings, Snyder launched the Pure Michigan Talent Connect website in early December. The site is intended to give employers and jobseekers a place to find each other and allow workers to assess their skills and connect with mentors and internships.

The governor wants lawmakers to approve self-employment assistance that would give benefits to unemployed workers who are setting up their own businesses rather than requiring them to pursue job opportunities in order to qualify.

Snyder also has proposed spending $15 million starting Oct. 1 to provide job training for 15- to 29-year-olds and ex-offenders in cities with the most crime to get the chronically unemployed back to work.

"Obviously, you can't fill every job, because there will always be openings," Snyder said when he unveiled his plan for "growing talent" late last year. "But if you start saying, 'Can we cut that number in half?' that would drop the unemployment rate by a whole percentage point. And that's a lot of jobs and major improvement."

The biggest driver of Michigan's resurgence has been the auto industry. Ever since General Motors Co. and Chrysler Group emerged from managed bankruptcies in 2009, they've been on an upward swing, allowing the state in 2010 to add more manufacturing jobs than it lost for the first time since 1999. GM even won back the title of the world's No. 1 automaker from competitor Toyota Motor Co., after Toyota had to slow production last year after an earthquake and tsunami struck northern Japan.

The improvement has spread into other sectors, giving Michigan its lowest unemployment rate in more than three years.

"When manufacturing goes up ... it puts more money back into the economy," Waclawek said.

Not every sector has grown. Local governments and school districts have shed thousands of jobs as tight tax revenues have led to layoffs. Michigan has been among states with the largest government job losses since June 2009.

And its jobless rate has dropped in part because jobless workers have become discouraged and either moved away, headed back to school or otherwise quit looking for work. Waclawek says it's almost impossible to track where those former workers have gone.

Still, the trend is hopeful. Michigan's January jobless rate was lower than 10 other states and the District of Columbia, coming in nearly 4 percentage points below nation-leading Nevada's rate of 12.7 percent and well below rates in California and North Carolina. It's slowly growing closer to the national rate of 8.3 percent, and has seen a decline of 5 percentage points since the end of the national recession in mid-2009.

University of Michigan economist George Fulton forecasts Michigan will add about 26,000 net jobs this year and 28,500 in 2013 before seeing greater growth of 46,800 jobs in 2014. That's slower than the net 63,500 jobs the state added in 2011, but Fulton said it's still reason for optimism.

"Now that the darkest days are in the books, much of today's news is positive," Fulton told state officials in January.