A modest proposal: Michigan’s economic policies should focus on increasing incomes for all

income

State should invest in education skills that acknowledge workers will switch jobs throughout their 40-year careers.

Lou Glazer is president and co-founder of Michigan Future, Inc., a nonpartisan, non-profit organization focused on creating new ideas regarding how Michigan can succeed as a world-class community in a knowledge-driven economy. Its work is funded by Michigan foundations. You can read his latest report and other material at www.michiganfuture.org.

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

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

Places with low unemployment rates, but also low personal income, aren’t successful to us. The same is true for other commonly cited measures of economic success such as gross state product and doing well on business friendly rankings. States and regions to us are not successful unless they are a place with a broad middle class.

Our new report, “A Path to Good Paying Careers for all Michiganders: A 21st century state policy agenda,” offers our ideas how to raise household incomes for all in our state. It’s available at michiganfuture.org.

We agree with President Reagan when he said a job is the best social program. To us, a good-paying job is the best social program. Except for those retired or unable to work at a good-paying job due to physical or mental disability, the best path to a middle class 40-year career is a good-paying jobs. The prime focus of state economic policy must be helping people have a career of good-paying work.

 

But it’s vital to understand that good-paying work today and, even more so, tomorrow looks much different than good-paying work in the past. Trying to turn the clock back to recreate the economy of the past has not worked. Both parties in Michigan have been promising they can do that for decades without success.

At the core of our agenda for raising Michiganders’ household income is the conviction that human capital is the asset that matters most to individual and state economic well-being. There are three states in the top 15 in per capita income that are energy-driven. Of the other 12 all are in the top 15 in the proportion of adults with a four year degree or more.

We agree with Governor Snyder when he wrote in his Special Message on Developing and Connecting Michigan Talent: “In the 20th century, the most valuable assets to job creators were financial and material capital. In a changing global economy, that is no longer the case. Today, talent has surpassed other resources as the driver of economic growth.”

Our research has led us to conclude that the recipe for a prosperous 21st century Michigan is adopting policies that:

(1)   Transform education and invest in it from birth through retirement to build foundational skills so that all Michiganders have the agility and ability to constantly switch occupations and have the skills necessary to have good-paying, 40-year careers.

(2)   Create and invest in regions across the state with high-quality infrastructure, basic services and amenities where talent from across the planet wants to live and work so the state can retain and attract high-wage employers and entrepreneurs that start high-wage businesses.

(3)   Establish and invest in policies that help those not in high-wage jobs work more and earn more.

We understand that some will not agree with this recipe. We hope those who don’t agree will propose alternatives on how to increase household incomes of all Michiganders that are aligned with today’s economic realities. That is the debate Michigan needs, rather than pretending that there is some magic elixir that can recreate Michigan’s high-prosperity 20th century economy.

In my next post we will explore how to pay for these essential public investments.  

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.

Comment Form

Add new comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

Comments

Matt
Tue, 08/22/2017 - 8:12am

Is it realistic that every job in our economy is going to be a high paying job? Aren't there a big percentage of jobs that just aren't going to lend themselves to what you are proposing. Are we really considering the unintended consequences we'll set lose, The road to hell....? We already are dealing with a significant labor shortage in W Michigan. Why do you think that everyone working in a job you believe to be substandard really wants the higher pressure, higher demands and expectations that necessarily come with a higher wage? Offering publicly funded educational opportunities giving the ability and skills to build a high paying career is well understood but beyond that .. not so sure this can (or should be) be consigned to three steps.

Moogie
Tue, 08/22/2017 - 12:49pm

It doesn't have to be " high paying" but people should not be working 40-60 hours a week & have an income that qualifies them for food stamps. Tax payors are subsidizing low wages. And saying people are lazy or need to work harder & sacrifice more is a poorly thought out reflexive statement

Matt
Wed, 08/23/2017 - 7:35am

Moogie: There is nothing in my comment that stated people are lazy or need to work harder or whatever. But to you, should every job pay the same regardless of the effort, skill set or strenuousness of that job? Should every job pay $40k a year because someone thinks that is what is needed for a family of 4?

Matt
Tue, 08/22/2017 - 8:27am

Suggestion, spend some time wandering around northern Michigan and the UP talking to people working (or not working at all) about how they'd fit with your vision. Or read Hillbilly Elegy, it could have been written about Northern Michigan. Let us know.

Moogie
Tue, 08/22/2017 - 12:54pm

I share some of your impression as well, though I definitely think its not the defining characteristic of northern michigan & the UP.

My extended family are yoopers. What I observe are politicians & a political climate that fosters a sense of resentment instead of flexibility & resiliency. The mining jobs are gone. Getting educated or skills training shouldn'the seen as snooty. Either people have to move for work, or they need to be open to be new ways of thinking-- like tech jobs of various levels that can be done remotely, entrepreneurship.

Anonymous
Fri, 11/03/2017 - 3:38pm

Agreed Matt. Hillbilly Elegy could have been written about my hometown, Saginaw, too.

***
Tue, 08/22/2017 - 8:43am

The worthless, self serving so called "Business leaders of Michigan" are only interested in paying people as little as possible, don't expect anything to change.

Paul Russo
Tue, 08/22/2017 - 9:32am

I agree jobs cure a lot of our problems, but our education systems must produce the candidates for these jobs.
Welfare can't be allowed to grow as a way of life. Too many perfer this way and hurt the growth of our economy.
Good paying jobs are available now, but our systems of education have failed and we refuse to face why.

Reynolds Farley
Tue, 08/22/2017 - 9:40am

These are very reasonable suggestions. It is extremely important to adjust our system of taxation and governance to adapt to the basic demographic and economic trends that are influencing the state of Michigan.

duane
Tue, 08/22/2017 - 11:25am

Farley,
The fatal flaw in Mr. Glazer proposals it that he does not include the individual, their role and responsibilities, in his thinking or any of the proposals.

The reality is that the economies today and in the future are based on leveraging knowledge and skills and the only way to develop the necessary knowledge and skills to day is for the individual to study and learn [it is something they must personally do and not something government can open up their minds and pour in]. For the future they must learn how to learn because the future will change the necessary knowledge and skills and only people can keep them self viable by learning what is new.
All of what Mr. Glazer and Governor Snyder tout falls flat and wastes other people's money by not including and addressing the individual and what they must do.

David Waymire
Wed, 08/23/2017 - 12:34pm

Duane, the problem goes deeper than the individual. Our education system is not set up for average kids to get the same training for the jobs of the future that rich kids do. Look at the Cranbrook curriculum vs. your local school, and you will see major differences. In addition, it would be foolish to ignore the reality that our state's continuous tax cutting has reduced our rank vs. other states in education spending. That means more kids in the classroom, fewer extracurricular opportunities (especially for low income children), fewer counselors, and an education system that makes it harder for even the most dedicated individual to obtain the skills needed for the jobs of today...and tomorrow.

Matt
Wed, 08/23/2017 - 4:21pm

David, the US on average spends at the top of the range of all OEDC countries and yet we get bottom tier results. The European schools provide a great model to move toward, but in spite of the Democratic party's infatuation with everything European we hear nothing but spend more money and more of the same education by Zip Code. Why is that? It's not about educating the kids, it's about their constituency groups and power!

David Waymire
Fri, 08/25/2017 - 2:30pm

Matt, I -- and Lou Glazer in this piece -- agree that we need to change our education system to get better results. Michigan has clearly proven that our current policies, which are simply to allow anyone to open a charter schools and have a free market system, while systematically reducing compensation for educators, isn't working. We need not to go to Europe to see what works. Massachusetts (ranked as the best state in the for education by both ALEC and education groups) gives us a taste...but we can do better. http://learninglab.legacy.wbur.org/2016/01/07/massachusetts-education-ag...

Matt
Sat, 08/26/2017 - 1:35pm

David the point still remains that the US spends more per student while getting substandard results as compared other OEDC nations, by your reference to Mass I assume that your only solution is to spend even more? Interestingly, the European schools emphasis even more choices, options and individual pacing as opposed to the ridged K-12/age matrix, school assignment by Zip code and government command and control that your side seems so insistent on doubling down on.

duane
Fri, 08/25/2017 - 12:36pm

David,
This sounds more about what you want to be happening to justify your political agenda than it does with reality.
Time and again for generations we see individuals in our public school system apply themselves and raise their academic and financial success no matter their parents’ financial status, the school they attend, the curriculum they take.
I would encourage you read a bit about the KIPP schools that have been in place in the poorest parts of New York City, their success demonstrates how your view has been flawed for decades, where schools in poor urban areas that have greater expectations for 'poor' students, the students succeed because they learn it is up to them to learn and work at learning.

I even question the issue of curriculum, the admissions of both Hispanic and Blacks are increasing in colleges across America which is just another real example of how your view falls apart when it faces reality, for I doubt all of those new college students are from schools with the type of curriculum that Cranbrook has.

If the student is interested in learning they will invest themselves in learning and they will continue to invest in learning as they grow, beyond high school. In Michigan students that aren’t admitted to the school of their choice have the alternative to enter a community college and progress into an ‘elite’ university if they want it enough to work for it.

When someone gravitates to spending more of other people’s money without even suggesting how the current spending can be made more effective it leaves me with the view that either it is inconvenient to think past money or they are lazy thinkers. You mention classroom size and number of staff, reality is that if a student goes to a large university they will have freshman classes of hundreds of students. If that is the case then students should be progressing to that size, k-5 progress from 20 to 30, 6-8 up to 35, 9-12 progress to the 80 with an assistant to help with breakout sessions. Staffing without specific roles and responsibilities and program performance metrics will simply do what has been done in the past and fail to progress with the changing needs of the students. As for extracurricular activities why don’t you consider volunteers that have working world experiences that can help the students grow skills in those activities rather than simply have them be socializing time?

The other flaw of your view on students and curriculum is that after high school the emphasis is on individual role and responsibilities not curriculum. Their desire to learn and work at learning becomes more important. In college and in the working world the individual and their interest in learning and working at learning is even more important than what curriculum they took because they will independently have to continue to learn to stay valuable to an employer.

Where you want to spend more of other people’s money and change curriculum, I want more creative thinking on how to interest students in learning and the means to learn, I want the student to learn how they control their academic success based on the work they do and how smart they do it. As for the spending, my whole career was focused on doing things better for less, and we were successful by thinking differently, by trying to obsolete how we were working today, by helping the individual take more control with more authority for what they were doing. All I hear from you is the same thinking and the same want for more of other people’s money as we have heard for generations.

David Waymire
Fri, 08/25/2017 - 2:37pm

Lots of response here (thank you for taking the time!)...but your start with KIPP provides an opening for a suggestion that you look at the per student cost at KIPP...it's substantially higher than traditional public schools around the nation or Michigan. Perhaps a reason why it can attract the educators who can make the differences we all want, keep schools open year around, and make the progress we want. Worth noting that when Gov. Snyder proposed the EAA, KIPP stayed out. Perhaps looking at how our state has reduced it support for education.
And I'll just note that universities offer classes of all sizes. When I attended Northwestern (too long ago), I had large classes for some of the more popular subjects (a class on the literature of the Bible was regularly filled quickly with 300 or so people), and, as a freshman, also had a class on the history of Japan with a full professor and 12 students. But overall, and I believe the article above, suggests that we need to rethink curriculum is a way much like you are suggesting...with a goal of having students attain the 6Cs, not just learn content that can be measured by standardized tests.

duane
Fri, 08/25/2017 - 11:42pm

David,
I don't know the KIPP cost per pupil. I notice you gravitate to money and ignore KIPP emphasis on the student and their role and responsibilities for their learning. You talk about system and curriculum as if learning has nothing to do with the student and their efforts.

As for your 12 or 300 classes. in either class who was responsible for your learning, your studying, the instructor, the school, the curriculum, or was it you? If a Senior must have only a class of 20, how can a college Freshman magically succeed in a class of 300? If that magic doesn't happen then why do Seniors have 20 or 30 student classes?

An added benefit is that the time each student spends on studying will add no cost to school.

Your Name
Tue, 08/22/2017 - 10:56am

Anyone else amused that the picture shown uses non-American coins?

Kevin Grand
Tue, 08/22/2017 - 12:05pm

If I had to venture a guess, I'd say that The Bridge is using stock images from a source like Shutterstock for their articles.

Much like the image they used for the Gilbert Brownsfield article yesterday that didn't feature the Old Husdon's site (or anything looking even remotely like it) in Detroit.

But you'd be surprised at how often I still get Canadian change when I go to the store.

As for Mr. Glazer's piece, I've already read their proposal on the Michigan Future Inc. website after his last piece was printed several days ago.

It doesn't offer anything even remotely new in solutions, only repackaging old ideas that not only never got any traction in the past, but failed to acknowledge why what we're doing right now in those areas isn't succeeding.

Spending more money on {fill in the blank} is apparently the default argument for everything that is wrong with the world today.

And guess whose money it is they would like to spend more of?

David Waymire
Wed, 08/23/2017 - 12:39pm

Kevin, you are wrong. The Michigan Future proposals start with two ideas that are not what we hear from our political leaders: That factory work is no longer the way to prosperity, and that the focus of our economic policy should not be on "a better business climate" or "lower unemployment," but higher incomes for all workers. In 2000, the last peak of the auto industry sales, Michigan ranked 19th in per capita income, just $66 below the national average. Now we rank 32nd, thousands below the national average. It's time for Michigan to wake up, and recognize attracting and retaining college graduates is the only way we will be needing those skilled trades workers in the future. No college grad...no new buildings in Detroit...no need for construction workers. Certainly $15 an hour factory workers won't be buying new homes or renovating their old ones, and that's the goal of our economic policy today...attracting factories that pay less and less to fewer and fewer.

Kevin Grand
Thu, 08/24/2017 - 5:21am

David,

You are aware that there are people in skilled trades who haven't gone to college?

It's even printed on the front page of the report:

"Clearly not all good-paying jobs require a four-year degree. There are many good-paying jobs that can be obtained with an associate’s degree or occupational credential. But the preponderance of good-paying jobs are going to those with four-year degrees or more."

And just like I have mentioned repeatedly in the past, I would strongly disagree with that last sentence due to the fact that colleges have literally priced themselves out of the market and disconnected themselves from reality.

Any earnings obtained by a four-year degree are negated by the debt that student will have to take on in order to graduate.

Whereas, someone with a skilled trade doesn't necessarily have to contend with that financial treadmill.

One more thing about skilled trades, how is it America was able to grow as much as it did in its early history before people began to think of colleges as "the way" ?

That troubling fact alone should cast significant doubt right there.

David Waymire
Fri, 08/25/2017 - 2:48pm

Kevin, the point is we need college grads first, then skilled trades workers can work for them. 50 years ago, skilled trades workers (plumbers, carpenters, etc) built homes and factories for factory workers in Michigan, who were among the highest paid workers in the nation. Today, factory workers make far less, and are not buying new homes or renovating current facilities. College grads are...in some places. How many plumbers can make a living in a place (Genesee County) where factories predominate, vs. a place (Washtenaw County) where there are many college grads? The answer is obvious.

The college debt issue is driven primarily by cuts in state support for higher education. In 2000, we spent about $1.9 billion on higher ed in Michigan. Then we started cutting taxes...and support for universities. Today we spend about $1.5 billion. The difference (plus all inflation, and increases in enrollment) has to come from someplace (unless you want lower quality). That has been tuition. But even so, you might be surprised to learn that at the U of M, only a third of freshmen take out a loan. and the average loan is less than $7,000. If that pattern continues, they would have a loan payment of $28,000 when they leave -- about the cost of nice new car. That's easily repayable. The real problem is for profit schools that promise much, encourage loans and then provide substandard education. Unfortunately, the Trump team seems hell bent on encouraging more of that.
Regarding history...well, that was then. This is now. Most folks cannot make a good living when you are 60 years old doing manual labor. Welders today make less than the did in 2006, and there are fewer of them in Michigan. And let's not forget, the University of Michigan was started 200 years ago...so higher education has been "the way" for a long time. It' s must more essential today than before, with the automation of jobs and death of unions that are part and parcel of modern society.

duane
Sun, 08/27/2017 - 8:54am

David,
It seems you are still using the old model/stereotypes of thinking. Manufacturing has changed [this has been for generations], it is high tech/high skills, and with that change the nature of the individual [worker], their role and responsibilities/authority and compensation. It doesn't take a college degree to become a programmer, a technician the operation computer controlled equipment or process line, to maintain the high tech equipment, etc. it takes the ability and willingness to take the high tech courses in specialize programs [consider special coding 'camps' as an example], and the capacity to take on the responsibilities for their jobs. You need to breakaway from the historic models and look at today and tomorrow to see how and what and who will step up to make what we need. I hope you are thinking a farmer is someone who mucks out the barns [the technology of farming is so different than a generation ago, it is high tech requiring someone who can analyze and use what the new technology offers].
As for the wages, there is a stratification but is because of the old strength leverage jobs being replaced by the knowledge and skills leveraged jobs. The old work hard jobs are both few and of diminishing value, the new knowledge and skills jobs are many and of increasing value. The compensation follows the value.
As for the cost of an education, it is related to the nature of the degree or knowledge learned. A brand new degreed engineer can start any where from $60,000-100,000 based on their degree and where they are willing to work. That $28,000 loan is not so overwhelming with a high five figure income. Similarly, there are many less than degreed programs that don't take the four years of the larger debts that can help get that first high tech job and opens up the opportunities to a successful career [that requires continual learning].

With regard to the death of unions, they have failed to change with the increased competiveness and the need for knowledge based jobs and people wanting more control of their jobs. What does an employee want, a sustainable employer in a competitive environment. How does a union help an employer be more competitive? What does an employee who has the high tech knowledge and skills want, great control of their work [responsibility with authority]. How does a union help an employee get more authority when it is designed to challenge authority? When an employee schedules their vacations, their work schedules, the working conditions [even to the point of shutting down the work for safety concerns] without ever having to ask permission of company management, who does the union bargain with and what do they bargain for? What you are missing is that the 'supervisory' jobs [foreman jobs, line manager jobs have disappeared]. This change has been happening for generations, put down you rear-view mirror and look around you and look at the future. These changes have been happening in 100 year old companies here in Michigan for decades.

The only unfortunate thing about these changes is how many are in denial and can't see how if kids learn how to learn they will be part of if not leading future changes that will improve the quality of live for all.

Moogie
Tue, 08/22/2017 - 1:02pm

I see a political climate that is fostering counter productive attitudes. There is no getting around the fact that people have to adapt to a changing work force.

Companies are paying many as little as possible, so the percentage of working poor or nearly working poor is going up. Taxpayors subsidize the Walmarts who pay crap wages with crap working environments.

Education is key-- but people let politicians like Patrick Colbeck pimp out public education to corporationd & scapegoat teachers.

As for post secondary ed:

It doesn't have to be a 4 year degree. It can be trade schools, community college.

But the "anti- intellectual, anti-science, universities are full of libtards lattitudes are serving no one well.

And the drug addiction problems in rural, suburban & urban areas needs to be addressed.

Matt
Wed, 08/23/2017 - 8:07am

Moogie, Walmart has a far lower profit margin than most companies on the SP 500 and have been a major force in helping lower income families stretch their income more than any other entity. As with all successful businesses they have be a disruptive force. There is no silver bullet to solve our national issues, not minimum wage increases, single payer healthcare or tax cuts will bring us to Nirvana as so many politicians seem to claim to know the way. Your reference to drug abuse for instance, 90% of addicts going through these very expensive (and yes profitable!!) programs end up going back to their addictions. We don't have the money to throw at this as is is currently done. The European educational systems deliver better results at far less cost, yet the teacher unions and yes, parents, , would fight it tooth and nail over the disruption to the current model and popping the Lake Wobegon delusion concerning our kids we make for our selves.

CARL VER BEEK
Tue, 08/22/2017 - 1:29pm

Although this seems like a nice idea, it is not so clear what the role of government is in accomplishing it.

Proposing 40 years for a career is also questionable. Someone coming out of high school at 18 must plan on working at least 45 years to accumulate enough to live on with current life expectancy, not to mention the compounding income effect of 5 more years on retirement funds after 40 years.