Thursday, March 09, 2006

Appears to be Good News -- Til You Look Closer

On the surface this is very good news. Michigan's unemployment rate is at 6.2% which is the lowest it has been in 42 months. That sounds like good news but there is a little problem with this.

While there are some news jobs, a good share of this appears to be something else entirely.

The article itself comes out and tells us:

But East Lansing economist Bob Kleine said that, until Michigan starts adding jobs, a lower unemployment rate won't mean that much.
"It's important, but total employment is more important," Kleine said.
"People are leaving the state, withdrawing from the labor force," he said. He added that economic forecasts predict Michigan will continue losing jobs this year before beginning to see a slight recovery in 2007.
"Even though I know the job loss has been getting smaller each year," Kleine said, "we need to see some employment gains before you can get very excited."

People are leaving the state looking for work and that will have a ripple effect as service jobs are no longer needed, costing us more jobs. The fact that we are losing fewer jobs every year is nice, but it would be better if we were gaining them.


Blogger ABFreedom said...

That's how they used to fudge the unemployment rate here as well. Then we caught on to them, and private groups are watching to make sure they report it correctly.

If the people leave the work force, or give up and go on welfare, they would always make the rate better then it actually was.

Leaving the state will be a big problem for you guys if it continues. Instead of waiting for business, your development groups should be going out and looking for it. See my latest post on what New brunswick did.

10:24 PM  
Blogger Lone Pony said...

So, the unemployment rate in Michigan is lower, but it's because there are less jobs available. I never thought about looking at it this way. U.S. unemployment rate is around 4%, right? Is this the same situation SR?

6:36 AM  
Blogger Crazy Politico said...

I'm quite sure the governor will mention the dropping rate, but not the dropping workforce as she takes credit for the change.

LP, it was lower because there are less people there to look for jobs. It kind of works that way for the US rate. The BLS uses two number, Employer survey of jobs and Household Survey of workers. If the household says it's not looking for work, they don't count them as unemployed. So they can bring the rate down.

The workforce participation rate (16-65 year olds) is about 66%, and has been right in that ballpark for a bunch of years.

12:18 PM  
Blogger Tim said...

Yes, I fear that the Sun is setting on our great state. I'm sure you will blame Jennifer for all of it, but we have a Republican Legistlature that keeps her from doing anything that they don't like. I actually think that Detroit is the real problem. It just has so many problems that I don't know if the Messiah himself could straighten it out. Did you see the Free Press story about the artists painting the blighted houses there Orange? Soon the whole city will look like it's going deer hunting.

6:36 PM  
Blogger Lone Pony said...

Thanks Bob! I understand it perfectly now.

8:38 PM  
Blogger shoprat said...

tim, I do not entirely blame Jennifer Granholm or the GOP because the real problems with our economy are NOT ENTIRELY POLITICAL. They are cultural and begin with the mindsets of the people of Michigan. It is combination of taxes and regulations (which are political), corporate greed and union greed. No politician can fix our problems until the average citizen in this state starts looking at himself and life differently.

You are right about Detroit. I don't know what can be done for that city. It is the heart of the moral and cultural problems that are destroying our state.

10:38 PM  
Blogger shoprat said...

LP CP answered the question correctly. We need to count total people actually working for a living, and Michigan's is declining though the country as a whole is drastically improving.

10:40 PM  
Blogger Crazy Politico said...

SR, one of the big problems in Detroit is that the folks leaving aren't the one's who need to. The productive folks who can get good paying work pretty much anywhere are deserting Detroit, and Michigan. The one's who can't, or who don't want to work are who are staying.

It will be interesting to see how they try and pull it out of the death spiral.

11:32 AM  
Blogger Tom said...

Detroit has some real problems. I think too much is being hyped up about the benefits of the Superbowl aftereffects, but the problems are too deep seated to be corrected. Everything the mayor is doing appears to be cosmetic, and not fixing the root of the problem.

Jobs leaving the state are a result of the automotive companys downsizing, moving, or squeezing the suppliers for everything they can. As more companies cannot compete and the jobs disappear, the displaced employees are going to leave for places that they can find jobs.

Michigan cannot depend on the automotive industry anymore. Too much competition is driving them out of the state, and tax incentives will not keep them here.

12:36 PM  

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