Michigan needs more college grads to attract good jobs

Bridge: Michigan lost a higher percentage of jobs in the recession than other states, and Michigan is projected to gain fewer jobs than 48 states in the next decade. What’s going on here?

The state’s goal may be more and better jobs, but these projections say that Michigan is highly likely to experience another decade of fewer jobs and the new jobs that are generated will be predominantly lower-wage jobs.

One might ask, “How can that be in a state that has done so much to lower business costs?” The evidence across the country is, rather than the (places with the) lowest business costs, the places which are creating more and better jobs have two characteristics in common: a high proportion of adults with a four-year degree and a high proportion of their jobs and wages are concentrated in the knowledge-based sectors of the economy. Michigan ranks in the mid-thirties in each. (The only exceptions are the few states with oil- and natural gas-driven economies.)

These projections are predominantly based on Michigan’s current demographics (slow growth and aging faster than the country) and our current industrial structure (concentrated in slow growth and low-pay industries). If the state doesn’t change this we, almost certainly, will continue to grow slower than the country in both jobs and personal income.

In the projections, many of the fastest-growing jobs are in fields that pay very little. That seems like a recipe for disaster.

It certainly is a recipe for being one of the poorer states in the country. For most of the 20th century, Michigan was one of the most prosperous states. As late as 2000 we were still in the top twenty in per-capita income – ranking 18th. No more! We have fallen to 35th and are now 13% below the national average.

Our 20th century success was built on being the place that invented the American mass middle class – largely high-wage factory jobs. Those jobs are gone and not coming back. Largely because of globalization and technology.

The data are clear: the 21st century mass middle class are professionals and managers – largely working in knowledge-based services. And the asset that matters most to those employers is human capital/talent. Michigan is in the mid-thirties in college attainment. If that doesn’t change we are going to continue to struggle in generating new high-wage jobs.

Bridge: If these projections hold, Michigan will continue to have a majority of jobs that do not require a college education. Is that normal for states, or is Michigan falling behind?

Without having the data for the other states it’s hard to provide a good answer to the question. But it is likely that the difference between Michigan and the type of new jobs being generating across the country is not in the number of low education attainment jobs. The demand for more low-skill/low-wage workers seems to be a national. What distinguishes Michigan from the rest of the country is the slow growth in high education attainment/higher wage jobs.

In our last report, (research consultant) Don Grimes and I found that in knowledge-based services between 1990 and 2011 employment grew by 55 percent nationally but only 30 percent in Michigan. And employment earnings (wages and benefits) in those sectors grew 52 percent nationally compared to 32 percent in Michigan. This is almost certainly the reason  Michigan is projected to have slower job growth for the next decade in high education attainment jobs.

Bridge: Looking at these numbers, do you have any advice for young people who will be entering the workforce in the next decade?

Figure out what you enjoy doing/are passionate about. And build a career around that. Occupational projections for more than a few years are hard to get right, particularly when globalization and technology are constantly destroying occupations, as machines do more and more of the work that humans used to, and changing which jobs are done in America.

Get as much education as you can. The data are clear: the more education attainment – particularly a four-year degree or more – the more likely you are to have a job and the more you will earn. The payoff for higher education attainment is large and growing. It is almost certain that trend will continue to grow.

Prepare for a career, not a job. In a world of constant and largely unpredictable change the individuals who do best economically will be those with broad skills which allow them to constantly adjust to a changing labor market; to recognize and take advantage of the opportunities of the day. Having narrow skills for the hot job of today increasingly has shorter and shorter value.

Bridge: Do you see any silver lining in this forecast?

In the short term, no. There is nothing good about being near the bottom in employment growth and having a predominance of what new jobs are being generating being low wage. Over the longer term, maybe yes.

But only if this is a wake-up call that we need to change. These projections are based on an assumption that current reality will hold constant for the next decade. We can change current reality. And if we do we can get better results.

In each of our annual reports on Michigan’s economy we have written: “Michigan has lagged in its support of the assets necessary to develop the knowledge-based economy at the needed scale.

Building that economy is going to take a long time, and it will require fundamental change. But we believe it is the only reliable path to regain high prosperity. The choice we face is, do we do what is required to build the assets needed to compete in the knowledge-based economy or do we accept being a low prosperity state?” That is the path to making these projections wrong.

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Comments

Jeff Salisbury
Mon, 12/16/2013 - 5:38pm
Information and communication technologies accounted for 4.2% of the roughly $14 trillion GDP in 2009. Does this fellow suggest if MI can just turn out enough college grad and keep them in a can after graduation, employers will move their headquarters here or start-ups will "start up" here? Does he really believe MI can get a bigger share of the 4.2%?
Katie
Mon, 12/16/2013 - 10:33pm
I've been a Michigan resident all my life. Received a B.S. and M.A. from Central Michigan University with the hopes of working in a field I am passionate about. I cannot land a job in my desired profession because employers are just now beginning to hire back the seasoned employees let go during the recession and the competition is simply too stiff for a newcomer like me. I can't even secure a job as a secretary or bank teller because I am grossly over-educated. Just count me among the "lost generation" of Michigan college graduates.
Neil
Tue, 12/17/2013 - 12:50pm
It seems Michigan and the country is still in recession, despite having a positive growth rate meaning the economy is growing. The student in the 9th grade must be presented the alternatives. Does the student want to be an all A student? An all A student high school graduate gets to call the shots, to be whatever the student wants to be and become. The student also must be asked how much money he/she wants to earn in his lifetime. The average student is just as smart as Bill Gates. African-Americans look at the president in the White House. The average African-American can get a Doctor of Law just like President Obama. One can then choose between socialism or capitalism like African American Herman Cain, the pizza millionaire,.
Duane
Tue, 12/17/2013 - 8:56pm
What we need to have are questions asked that provide useful information to readers. The question should be why did we lose more jobs then any other state in the recession, not what going on here. That will tell us more about what needs to be addressed rather then as Mr Glazer says, "...Michigan is highly likely to experience another decade of fewer jobs..." We need to be learning about what needs to change not what will continue to happen without change. The question isn't, ...is Michigan falling behind, but what does Michgian have to do to improve. It isn't hear about about how information jobs are growing faster somewhere else, it is about hearing how we can change so we are growing faster. It maybe about teaching computer languages earlier and to all the studentas rather then teach foreign languages (American English is the international language of technology and business). The question isn't, ...have any advice for young people, it is what do young people have to do to prepare to make future employers competitive. Then they can hear rather then the over worked, figure out what you enjoy and make a career of it, instead of you have to sacrifice to gain the knowledge and skills that will make and employer compatitive. Rather than enjoying computer games, learn computer languages, learn to read and write so you can communicate your ideas so others can use them. The question isn't, do you see a silver lining, it is what are the changes you see need to be made. We already know the answer to the silver lining is No, what we need to hear is how do we change the infastructure so Michigan is making technology more available to businesses and employees so they can be more competitive. The change we need to see is a more knowledgeable reporters so they will be able to ask the questions that can provide more valuable information to the readers.
David Waymire
Tue, 12/08/2015 - 2:51pm
I work with Lou and have helped him with a number of reports over the years... Let me try to answer some of these. 1. Why did we lose more jobs: Because we were over-reliant on factory work. America has lost huge numbers of factory jobs to automation and pressure to move them overseas, or to states willing to "buy" those jobs even though the version of them they are buying are very low paying. Michigan was the most manufacturing-oriented state in the nation. That works when the auto industry factories paid well and had lots of job. Those days are over. Factory work is low paying and increasingly automated...not a source of middle class jobs. 2. What do we have to do to improve? The data shows more and better jobs are in the knowledge economy. Where do you locate a coal mine? Where the coal is. Where do you locate a knowledge economy operation (corporate headquarters, etc.)...where the college grads are. If we want to improve, we need to better attract, retain and prepare college grads. Yes, if we have the grads, the jobs will follow. If we don't have the grads, folks won't locate their knowledge industry operations here in substantial numbers. Dow has relocated many marketing jobs to Chicago. Many auto engineering jobs are going to Silcon Valley. Those are not low tax places...they are where the college grads are. 3. If you want to learn more, instead of berating reporters you might visit www.michiganfuture.org, where the solutions are clear. We need to invest in higher ed and make our cities more attractive to college grads. You do that by making them safe, having mass transit, making them fun places for young college grads to live and play. You do that by doing surveys of college grads and asking them what the want. Increasingly, a significant number are saying "we want a cool place to live...then we will find a job there." Not many places in Michigan are meeting that requirement.