John Austin is the director of the Michigan Economic Center, a nonresident senior fellow with the Chicago Council on Global Affairs and the Brookings Institution, and a research fellow with the W.E. Upjohn Institute.
COVID-19 is recasting life and work rhythms everywhere. In the coastal hothouse economies of the Bay Area, New York, Boston and Washington this means unwelcomed layoffs for so many in the hospitality, entertainment, and food service industries. But for the many tech and knowledge workers with good paying jobs, it means a somewhat disorienting new life of work from home — but the work (and good pay) remains.
Things are different in my home state of Michigan and across the Midwest. Here the virus is revealing the always tenuous hold on a decent income for many, in communities still in transition from success in the old industrial era, to finding footing in today’s tech-driven, wired, and globalized economy. My colleagues at Brookings Institution recently documented the likely differential regional impacts of the ‘Coronaeconomy,” including hard hits to manufacturing heavy states like ours.
Here the lucky well-compensated few (like the idled autoworkers in today’s highly automated manufacturing facility) may still get a paycheck; but the coronavirus shutters many businesses that depend on those auto-related incomes. Here the rug is getting pulled out from under the child care provider, the barkeep, the hotel housekeeper, even the just-making-it salon owner and enterprising fitness instructor at the now closed gym — suddenly have no income. These are the kind of jobs most Michiganders have and rely on. When these relatively modest handholds on the “American Dream” are vaporized, the abyss opens; but the daily anxiety most workers here feel about how to make ends meet is nothing new — it’s now just taking an urgent turn.
As pointed out by colleagues at Upjohn Institute and Brookings, right now federal leaders should bake into any stimulus program essential supports for state and local governments, incentives for employers to hire workers back quickly, along with job training for those that need it. Should our life and politics ever return to “normal”, it must be a newly urgent undertaking for our leaders to focus squarely on tangible plans to create more better- paying, new jobs in communities in Michigan, Wisconsin, Ohio and Pennsylvania. The 2020 swing state voters deserve to have their real needs met by our leaders. Far and away the biggest need is for more good-paying jobs.
A tighter labor market in recent years in Michigan and other Midwest states and oft-reported worker shortages has created a bit of an illusion about a robust economy, here. The sad reality is that behind that veneer are lots of people working for relatively little money. Michigan Future Inc. recently reported (prior to COVID-19) that 43 percent of Michigan households could not afford basic necessities. And as Michigan Future Inc’s. map of the data from the Michigan Association of United Way on county shar of "needy" households shows, this figure is over 50 percent (and in Lake County reaching 61 percent!) in a number of Michigan’s rural counties and still-struggling former factory towns.
The challenges facing many families whose breadwinners are working are now on vivid display, as the coronavirus stops the cash flow, it reveals the thin membrane between just doing barely ok, and now not knowing what to do. A federal handout of $1,000 or $2,400 may help—but it won’t help to relieve the ongoing anxiety so many workers face, even when they are getting a regular paycheck.
We trust that when corona peaks, and we can begin to peek out from our homes and take up a semblance of normal life; we will have new energy and urgency to address the most fundamental need for Americans in the Midwest (and so many other parts of our country): how to deliver the dignity of work and a good paying job that allows one to provide for one’s family, and just as importantly, not live with daily fear.
When, inevitably, the focus on the 2020 Presidential election returns and all eyes are again on the region, it is a very good time to debate and discuss what would be most powerful to both accelerate the Midwest’s economic transformation from the Rust Belt of yore, and spread the emerging new economy to more people and places. A blueprint for just this agenda is provided in our recent report released by the Chicago Council on Global Affairs, A Vital Midwest: The Path to New Prosperity. It shows how—despite many challenges, the Midwest can build on an impressive innovation infrastructure in the form of top universities, companies, new technology and talent generation to create lots of new good-paying jobs and businesses in a host of emerging sectors.
The growing, prosperous tech economy, an economy that provides some buffering against even the most insidious virus, doesn’t have to remain a coastal phenomenon. But it will require leadership and focus to reverse the patterns of today’s “winner-take-all” that leaves so many in what we once called Middle America left out. Folks here work hard, and are proud. Too many live with anxiety every day; anxiety that can understandably turn to anger, bitterness and resentment if it looks like others are still cashing in –whether urban elites, or wealthy senators.
There is a better way. Let’s hope Joe Biden and Donald Trump take a moment while practicing social distancing—to make some real plans for better jobs for Midwest voters.