Jobs flooding to West Michigan, though wages still lag
The announcement a month ago was merely the latest proof that West Michigan continues to spearhead the state's jobs comeback.
The defense contractor Plasan North America declared plans to move its headquarters from Vermont to suburban Grand Rapids – and bring 120 white-collar jobs and $12.3 million in investment with it. That's on top of 400 high-tech automotive manufacturing jobs recently added at a subsidiary of Plasan nearby.
A local economic development leader said such announcements have become all but routine lately, as the Grand Rapids region continues to add jobs in manufacturing, real estate and telecommunications.
“The resurgence has not stopped,” said Birgit Klohs, president and CEO of The Right Place Inc., a West Michigan economic development organization.
A look at U.S. Bureau of Labor Statistics jobs data from 2005 through 2014 confirms her assessment of the region, revealing a strong bounce back from the Great Recession. But it also shows that despite the gains, the state as a whole still lags the United States in job recovery.
Among Michigan's top 10 counties for jobs growth during that period, two West Michigan counties – Ottawa and Kent – added more jobs than the next eight combined. Kent added 23,728 jobs and Ottawa added 6,235 since 2005 – about 30,000 in total. The next eight in line added fewer than 28,000.
Two other West Michigan counties made the top 10 for jobs added in 2014. Allegan County was sixth, adding 4,043 jobs, and Ionia County was seventh, adding 3,863 jobs. At the other end of the spectrum, sparsely populated areas were hardest hit by percentage job losses from 2005 to 2013 – the “bottom 10” list is entirely comprised of rural counties.
To be sure, West Michigan's jobs growth is not matched to high wages. Kent County averaged $837 in weekly wages in September 2014, according to the Bureau of Labor Statistics; while Ottawa County averaged $801 – both below the state average of $888. Washtenaw and Oakland counties were tied at the top with an average weekly wage of $1,019, with Wayne County at $1,018. By comparison, U.S. wages average $941.
George Erickcek, economic analyst for the Kalamazoo-based Upjohn Institute for Employment Research, said West Michigan’s lower wages are linked to the fact that it was never as heavily unionized as Southeast Michigan and its historically higher-paying automotive jobs. As a result, wages in West Michigan have been slower to increase.
But Klohs says the area’s jobs record clearly points to a regional economy headed in the right direction.
“What those jobs numbers say to me is that we have a very diverse, technologically advanced economy and manufacturing base, anything from automotive supply to medical devices to aerospace. Furniture is back as well,” Klohs said.
Statewide, Michigan lost 155,986 jobs from 2005 through 2013, when it employed just over 4 million workers. U.S. employment increased during that time by about 25 million jobs, to 134 million. Michigan's unemployment in March stood at 5.6 percent, slightly above the U.S. unemployment rate of 5.5 percent.
The bulk of Michigan's job losses were in auto-dependent Southeast Michigan, slammed by the near-collapse of the automobile industry. Wayne County lost 93,151 jobs since since 2005. Oakland County lost 22,389 and Macomb County lost 19,354 – nearly 90 percent of the state's total job loss in that period.
Southeast Michigan did chip away at those cumulative job losses in 2014, as Oakland County added 15,242 jobs in the first nine months of 2014, Wayne County added 9,574 and Macomb County added 6,865. But the portion of added jobs was modest compared to West Michigan, with job increases never rising above 2.3 percent in metro Detroit’s Wayne, Oakland and Macomb counties. By contrast, Kent County's added 4.6 percent more jobs the first three quarters of 2014 and Ottawa County 7.6 percent.
But for all its struggles, Southeast Michigan is still the big dog among regional economic players in Michigan.
According to the U.S. Bureau of Economic Analysis, economic output in the Grand Rapids region grew from 10 percent of Michigan GDP in 2001 to 11 percent in 2013. And while it fell in the Detroit region – from 54.7 percent in 2001 to 52 percent in 2013 – it still stood nearly five times that of the Grand Rapids region.
Brian Parthum, economic analyst for the Southeast Michigan Council of Governments, said he expects the region to continue a moderate growth pattern for at least the near term.
“I think perhaps it has slowed in manufacturing but it is starting to pick up in other sectors, such as leisure and hospitality and some of your service-oriented sectors. I think over the next several years we are still expecting national automotive sales to be right around 17 million, which should still mean there is going to be demand out there for cars.”
Michigan State University economist Charles Ballard said it's “way too soon to count out” Southeast Michigan.
Ballard noted that recent data from the U.S. Bureau of Economic Analysis put Oakland County in first place for per capita personal income in 2013, at $57,035. Kent County ranked 11th at $39,806.
“When we add to that the fact that the population of Oakland County is still almost exactly twice as large as the population of Kent County, it turns out that the economy in Oakland County is nearly three times as large as the economy in Kent County,” Ballard said.
West of Detroit, Livingston and Washtenaw counties also made the top 10 in jobs growth from 2005 to 2013, with Livingston adding nearly 5,000 jobs and Washtenaw adding more than 4,000. Eaton County southwest of Lansing was third in jobs growth in the state during that period, adding 5,564 jobs.
At the west end of the Upper Peninsula, Ontonagon County had 1,407 jobs in 2013 – a 40.5 percent drop from 2005, the worst in the state. Oscoda County, east of Grayling, lost 21 percent of its jobs during the same period. Montcalm County, north of Grand Rapids, was just behind, with a job loss of nearly 20 percent. The remaining seven counties in the bottom 10, all rural, are scattered throughout the Lower Peninsula.
The narrative is much brighter in West Michigan, where just about every jobs sector in the Grand Rapids region grew in 2013. The region includes Kent, Ottawa, Barry and Montcalm counties.
According to the Bureau of Economic Analysis, arts and entertainment, real estate, publishing and telecommunications and construction grew by roughly 7 percent or so. Manufacturing, the region’s largest sector, gained 6.2 percent and comprised 25 percent of the region’s economy. By comparison, manufacturing was just under 18 percent of GDP in the Detroit region.
Right Place CEO Klohs cited firms like Medbio Inc., a Kent County medical device manufacturer, which broke ground in June 2014 on a $3.4 million expansion of its manufacturing and warehouse space, and is expected to add nearly 50 jobs over three years. In Ottawa County, Zeeland-based auto parts manufacturer Gentex embarked in 2011 on a hiring spree expected to add more than 1,000 workers as it strained to keep pace with demand for its rear- and side-view mirrors.
“There isn't a car company in the world that doesn't have Gentex mirrors,” Klohs said.
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