Michigan’s economy is broken. And neither party is offering real solutions.

broken economy concept

There is no way back to the prosperous Michigan economy of the 20th Century. We must face this reality and get to work on ideas that will produce a broad middle class, where household income grows for all Michiganders.

Lou Glazer is president and co-founder of Michigan Future, Inc., a nonpartisan, nonprofit organization focused on helping Michigan succeed in a knowledge-driven economy. Its work is funded by Michigan foundations.

EDITOR’S NOTE:  This is the first of three columns by Glazer on the policy changes he believes the state needs to pursue to nurture a thriving economy.

Over the last decade and a half––no matter who was in control in Lansing and Washington––Michigan has moved from being a high-prosperity to a low-prosperity state. From 2000––the last time the Detroit Three was surging––through 2015 Michigan tumbled from two percent below the national average in per capita income to 11 percent below. More worrisome, the state dropped from one percent below the national average to 16 percent below in wages and benefits per capita.

The Michigan Association of United Ways found that 40 percent of Michigan households do not have sufficient income to pay for the necessities: housing, child care, food, health care and transportation. Its report makes clear that this is an all Michigan problem, in every county, among all races and all ages.

The preeminent challenge of our times is figuring out how to reverse what is being called the Great Decoupling. Where even when the economy is growing––as it has been in Michigan since the end of the Great Recession––only those at the top are benefiting from that growth.

To meet this challenge requires the transformation of state economic policy. It’s time to turn away from the failed ideas both parties have offered Michiganders for far too long about how we can turn the clock back and make the old economy work again. In its place we need new ideas from both parties on how we can position all Michiganders for economic success in an economy being constantly altered by smarter and smarter machines taking over work traditionally done by humans.

It should now be clear that having a growing economy, or a low unemployment rate, or being business friendly––all of which have been the goals of state policymakers now and in the past––does not lead to an economy that benefits all. Michigan policymakers need a new mission statement that drives their actions.

Michigan Future Inc.––the think tank I lead––through its first state policy agenda,offers our ideas on what a 21st-Century state economic strategy can and should look like.

It starts by proposing a new goal of state economic policy: a rising household income for all Michiganders. Michigan should become, once again, a place with a broad middle class, where wages and benefits allow one to pay the bills, save for retirement and the kids’ education and pass on a better opportunity to the next generation.

The key to accomplishing that is to have an economy aligned with the reality that good-paying, 40-year careers of today and tomorrow have changed forever. In the 21st Century:

Work is increasingly unstable. Smarter and smarter machines are accelerating the creative destruction of jobs, occupations and even industries.

Work is increasingly contingent. Far more of us are working for ourselves, where we are responsible for our employment, salary and benefits.

And a large proportion of jobs are not high-skill, and therefore will not be high paid. The high-paid, low-education-attainment jobs that were the backbone of Michigan’s mass 20th-Century middle class are gone forever.

What we desperately need is for both parties to acknowledge this reality. There is no way back to the prosperous Michigan economy of the 20th Century. We must get to work on ideas on how to have a prosperous economy—with a broad middle class—in the context of these new realities.

Yes this is scary. All of us would prefer the old, more stable economy. But that is not a choice we have available to us. Both trying to make the old economy work again and leaving it up to each of us to fend for ourselves in this radical transformation is almost certainly a recipe to make us worse off.

What we need are politicians from across the political spectrum advancing ideas as big and disruptive as those that, in the words of U.S. Sen. Ben Sasse (R-Neb.), “spawned progressivism in American politics that transformed both the Democratic and Republican parties under Teddy Roosevelt and Woodrow Wilson”.

That policy response, by both parties, was essential in helping Americans thrive in the transition from an agrarian to an industrial economy. We need the same kind of bold policy transformation to help us thrive in the transition from an industrial to a knowledge-based economy.

In my next post we will look at Michigan Future’s ideas for how state policy can create a path to good-paying careers for all Michiganders.

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan.

About The Author

Lou Glazer

A guest author for Bridge Magazine.

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Tue, 08/08/2017 - 8:05am

Policies at the state level have done their part to make Michigan business friendly and workers getting pushed to the sidelines and considered just "fodder" to keep things running at the lowest cost possible enriching the few at the expense of many.

DER
Tue, 08/08/2017 - 9:09am

agree

Floyd Kopietz
Tue, 08/08/2017 - 11:21am

I agree as well. Any policy that does not concentrate on keeping dollars in Michigan or better yet bringing dollars into Michigan will not bring back the middle class prosperity that the author is looking for. An example is replacing energy purchased from outside of Michigan for renewable energy produced in Michigan will make a positive investment to the economic health of its citizens.

Martin Magid
Tue, 08/08/2017 - 8:55am

I hope the subsequent articles will be very specific, and so appealing that the legislature will act in the public interest.

David Waymire
Tue, 08/08/2017 - 10:32am

You can click the link in the article to go Michigan Future's latest report with policy suggestions, or visit www.michiganfuture.org (after you read all the other great stuff Bridge is offering today!).

Allan Blackburn
Tue, 08/08/2017 - 10:40am

The current party in power has brought us the Right to Work laws, stripped unions out of power, focused on austerity measures, driven teachers away from the profession in favor of charter schools that pay less, devalued education, brought about policies in which tuition has gone up so high for college degrees that either one walks from college with crippling student loan debt or it has left college only in the hands of the wealthy. We have large think tanks to promote a far right agenda such as the Mackinac Center for Public Policy, the DeVos family who will put large sums of money against anyone who doesn't vote the way that they or the Koch Brothers like. We are now stuck in a service based economy with the haves and the have nots. Enjoy it as this is what we are stuck with until people realize that this current group certainly is not siding with anyone who is not buying their seat in Lansing.

Carl
Tue, 08/08/2017 - 11:15am

Not to agree or disagree with your diatribe, but focusing on austerity measures is a foreign concept to the progressive mind and in most cases (not all) it was progressive spending that created deficits and the need to curtail spending. When pensions are crushing budgets (public or otherwise) austerity measures are needed. Otherwise you have Detroit and Granholm's Michigan where there is never a day of reckoning on spending.

Allan Blackburn
Tue, 08/08/2017 - 3:41pm

Not to agree or disagree with your diatribe but my conclusions still stand. We have what we have as, these seats have been purchased for a long period of time through gerrymandering and we are currently in a service based economy where many serve the few, for less than a living wage. I would say, without placing blame as you have done on Granholm and Detroit, that we have had our day of reckoning on spending and wages.

Carl
Tue, 08/08/2017 - 9:15pm

You can stand all you want - a progressive has never met a tax increase it did not like, never failed to expand government, never looked ahead beyond the next election as far as what deficit spending does ... I did not place blame on Detroit or Granholm, only used both as examples of what happens when you continually ignore fiscal reality. As far as Detroit, how can one even defend how the city was managed for decades?

Anonymous
Thu, 08/10/2017 - 10:38am

Absolutely not true. This progressive wants excellent management that should result in lower cost government. However those in the top 1/10th of 1% need to start paying their fair share.

duane
Thu, 08/10/2017 - 6:57pm

What is 'fair share'? Does it have to do with studying and sacrificing to get an education, working long arduous hours, does have to investing earnings to grow wealth, does it have to sacrificing for their children so their children will learn and earn their living?
Do just tell us about 'fair' until you define 'fair' so we all have the same reference for considering your proclamations.

Chuck Fellows
Tue, 08/08/2017 - 7:56pm

Cutting spending as a road to prosperity is a false narrative. The money being disputed is the people's money and politicians (and the wealthy that fund them) behave as if it were their money. Let the people choose how to spend it since, after all, they are paying for it, especially the middle and lower economic groups in our state. Destroying infrastructure and education, not living up to promises made (pensions) is conservative policy writ large by Koch and those that came before, the Buchanan's Kilpatricks and Dardens, not to mention Byrd. This attitude is rooted in the belief that those that hold wealth are the privileged ones all other being beneath them, and any attempt to compel them to pay their fair share is "unconstitutional". Harks back to the days of slaveholders attempting to retain the wealth slavery gave them.

Rich
Tue, 08/08/2017 - 4:18pm

And the George Soros' of the world do not promote an extreme left agenda? Both sides of government have jointly led to the dismantling of America by their quest to keep themselves in office.

Allan Blackburn
Wed, 08/09/2017 - 9:16am

Someone here accused me of being a progressive. I am a retired since the age of 57 year old man, over 60 and a moderate. As far as George Soros; he is the popular whipping boy for those that think money control politics. It does but the left would never be able to compete with Americans For Prosperity, Mackinac Center for Public Policy, Freedom Foundation, The Koch, DeVos, Mercer and more too numerous to list that is funding the conservative movement. Some might call them Libertarians but I would say they are more extreme than that. They seem to be anarchists and desire the destruction of government. Rugged individualism at its finest where only the oligarchy excels at the expense of everyone else. Yes I agree that money needs to get out of politics though it is highly entrenched and the propaganda machines have stripped many of critical thought on most issues affecting our society today.

Matt
Wed, 08/09/2017 - 10:04pm

Hey Allan, who spent more Hillary or the Donald? Who did the wealthy support Hillary or the Donald? Seems most of the usual list of bogie men you list aren't all that thrilled with Trump or what they are getting from him?.... as if the left doesn't have it's list of Sugar Daddies.

Lewis Ford
Tue, 08/08/2017 - 11:20am

I've lived in five states, including New York, Colorado, and Illinois, and it's shocking to now live in a state that so clearly is regressive, both politically and economically. Just in one crucial area alone--transportation--Michigan is a basket case. Not only are the roads and highways are in horrendous shape, but the "mass transit" ranges from non-existent to crappy. Meanwhile the GOP-dominated Legislature never saw a tax cut it didn't like, which means public investment has gone down the drain in favor of private greed. Except for such progressive havens like Ann Arbor, if I were a business or corporation, why on earth would I relocate to such a backward state?

Matt
Wed, 08/09/2017 - 10:06pm

Isn't that the great thing about the US, we can move and aren't forced to stay in any one location?

senior 007
Tue, 08/08/2017 - 11:54am

WHAT TOOK you SO LONG >>>>>>>>all you/State knows i.e. to raises taxes,,Taxes taxes .cut car insurance to OHIO standard Cut ElectriCBILL by 50% DTE overcharges .......legaliz Marujana and get More Sales tax COLORADO NEVADA,,,and much less people dying every day OPINOID... Kills 60 People in one week....no people no workers not money .....
On the Job trying for Schoolkids when they reach age 14 ......
build train all over Michigan" Golden Spike" 35 year still not rolling.
masstranstortation.more tourist would come....65 and over senior..

Ren Farley
Tue, 08/08/2017 - 12:40pm

Very important ideas are presented in this essay. Major changes are needed to promote economic and population growth in Michigan. Our tax systems needs a major revision. I hope that the candidates for governor will discuss these issues carefully and often

duane
Tue, 08/08/2017 - 2:28pm

Mr. Glazer like so many others fail to recognize that the historic Michigan economies were not created by either Party, they were created by people. Those people ventured into the unknown taking risks undistorted by government control or interference, they found people with the necessary knowledge/skills/strength willing to do the necessary work.

Today going into business is taking risks venturing into the unknown, finding people with the necessary knowledge and skills and will to do the work is still true today. The difference is that both political Parties in trying to claim some glory are failing to understand what it takes to succeed for a business and individuals in this competitive world.
The old economic success for individuals was based on a strength leveraged economy. Today’s and tomorrow’s economies are based on leveraging knowledge and skills.
The flaw in both Mr. Glazer's and the politicians view of 'well' paying jobs is that the ‘well’ paying job require people that have learned how to learn, people who can learn knowledge and skills job needed for the jobs. Until Mr. Glazer and the politicians accept that the future of jobs in Michigan will be due to the learning the kids do, the learning how to learn and think [for thinking and judgement is what earns more] is what future jobs will need. The learning how to learn, how to think, how to decide can only be done by the individual, nothing Mr. Glazer or the politicians can devise can replace what the individual student must do to learn.

Until Mr. Glazer and the politicians accept that the individual student has the critical role and responsibilities for their learning there is little hope to change Michigan’s economic success, other than by recruiting people from place where the students are interested enough in learning to do the studying/homework.

Chuck Fellows
Tue, 08/08/2017 - 8:04pm

Children are born knowing how to learn, evolution provided that skill - we have survived haven't we? America's commercial enterprise flourished due to entrepreneurship, knowing how to ask the right questions (individual traits) and massive public subsidies that built the railroads and the roads, electrified the nation and supported both agricultural and industrial development. Public money and policy foresight did that. Public with leadership that saw the opportunities the entrepreneurs and the curious presented.
If you want to improve learning in schools allow children to pursue their curiosity - when you do that children gladly become responsible for their own learning. It is after all their journey, their expectations, not ours.

duane
Wed, 08/09/2017 - 1:17am

I think what you describe, at best, is how the politicians see the world.

As for the childhood curiosity, it needs to be stimulated, it needs to learned. Maybe it isn't genetic because all of those in my family, learning has been a learned skill and none not even our grand kids knew how to learn until they were shown, encouraged, and practiced.
Using myself as an example my childhood curiosity was about the things those around me did and none of it was academic. It wasn't until in my early late teens and early adulthood that I started seeing how others learned, studying and doing homework [not something my neighborhood friends did]. It was then I saw how every class has a spread of academic success and what differentiated the success was the personal interest in learning, the work and learning skills that seem to most matter in the level of academic success a student had. Even natural ability was overshadow by individual interest and effort.

Rich
Tue, 08/08/2017 - 4:14pm

Will life as we remember it ever return? Probably not. The generation that built the middle class had something that is not here anymore. They had the drive and ambition to better themselves. No government regulation or policy can enable a middle class. It is the hard work and determination of individual people that makes them successful. You can have nothing like Dr. Ben Carson, and rise to extreme heights. Or you can have everything and lower yourself to nothing through laziness and feeling that others have to give it to you.

Anonymous
Tue, 08/08/2017 - 4:51pm

Telling people to work hard and believe in themselves does not result in inevitable triumph over all obstacles. You can ask the Japanese and the Germans about that.

Like it or not, on the aggregate peoples' behavior is largely predictable, and outcomes can be influenced strongly by public policy. Everybody in this country that's currently improving their lot in life are doing so by moving to one of two places: 1) oil and gas fields, and 2) software engineering hubs (for lack of a better term). Sorry to say that there just ain't that much natural gas in Michigan, so that's out. There needs to be strong and immediate investment into getting our kids the sort of education that will be needed for the type of economy that's emerging.

duane
Wed, 08/09/2017 - 1:26am

No matter how much money is thrown at education until the reality that each kid decides whether they learn or not is accepted and we adjust how we encourage them to want to learn students will not learn.
Learning is best frame by the adage, 'you can lead a horse to water, but you can't make it drink.'
You can have the slickest presentation, the most enthusiastic teacher, parents that strongly support education, but if the student isn't interested and especially if there is something else they are interested, then they won't learn.

Bernadette
Tue, 08/08/2017 - 8:18pm

Thank you for this interesting article. It is good to see someone who is thinking about another way. The last 30 years proves business as usual is not working and the tired old political solutions are not working.

The "make the changes and see what happens by both the republicans and democrats has wreaked havoc on this state, as has the money in politics. There needs to collaboration and dialogue, along with long term thinking. What are we passing down to the next 7 generations?

Scott A
Wed, 08/09/2017 - 10:46am

So true. I used to care when I thought the state had a chance for a meaningful comeback.
Fix gerrymandering.

Matt
Thu, 08/10/2017 - 7:56am

Seems Michigan's not so distant prosperity, as you say was build on low knowledge(skill)/high wage jobs, but it must be asked how realistic or long term sustainable this concept is? Granted unions exist largely to maintain this imbalance, (from each according to his abilities, to each according to his needs). But still one must ask if we have enough operational Marxists (other than Alan above) who are really going to be content with this situation for the long term? Maybe this was doomed to fail from the start?

KP
Thu, 08/10/2017 - 9:23am

Are you inferring that Capitalism is like a Ponzi scheme and we are starting to see the chickens come home to roost?

duane
Fri, 08/11/2017 - 9:39am

I had thought of it until your comment, but it seems the government programs are a Ponzi scheme.
The politicians keep claiming they are delivering great results and if they get more with other people's money they will make the economy grow. And all they need to do is blame the capitalists when the economy turns down [as in 2008, when it really was FASB 157] and claim when it is better they did it. Look at the 10 trillion in additional debt and until 6 months ago was disappointing. Sure sounds like a Ponzi scheme.

Matt
Fri, 08/11/2017 - 3:35pm

Given the definition that a Ponzi scheme is a promise that if you put money in a "pot " you'll be able to get more out with no other inputs, so I'm not following the connection to capitalism. Clarify please.

duane
Fri, 08/11/2017 - 9:02pm

Matt,

Add in 'Bait and Switch', claim it is 'capitalism' and switch people to 'government' where they expect to get better results for their money.

John Saari
Sun, 08/13/2017 - 6:38am

Increase Tourism, Tax on Trade and CCC employment for all. Use a pay-as-you-go license and permit system. Bite the bullet and take care of our population with Housing, Food, Healthcare, Education, Minimum wage, Security.