Business Leaders for Michigan released a report comparing Michigan’s performance against the Top 10 states that ranked it 29 in the nation but found many other states are outpacing the Wolverine state.
However, Michigan had made significant gains since the Great Recession when it advanced from 49 to its current 29.
“Michigan is much better off and has come a long way since 2009. However, despite 10 years of economic growth prior to COVID-19, we’re struggling to grow faster than our competitors,” Business Leaders for Michigan President and CEO Jeff Donofrio said in a statement. “As we continue to see economic disruptions from the pandemic, talent shortages and shifts in our economy, including to vehicle electrification and advanced mobility, it’s even more critical that we examine Michigan’s competitiveness and make sure that in the decades ahead we focus on investments and actions that drive growth,”
The national analysis ranks states via metrics including Gross Domestic Product (GDP), median household income, business climate perception, and growth and economic health indicators.
These updated metrics provide a more holistic view of Michigan than a one-dimensional snapshot of the state’s economy. Donofrio said Michigan is seeing a “once-in-a-generation” opportunity to spend billions of dollars on workforce and talent development to achieve long-term growth.
The Top 10 states are Utah, Washington, Colorado, Texas, Massachusetts, Virginia, California, Oregon, Florida, and Arizona.
For example, the report found that more than double the percent of Michiganders dropped out of the labor force (-2.7%) over the past three years than in the above top 10 states (-1.1%).
Other metrics weren’t as bad. Michigan’s educational attainment rate slightly outpaced the Top 10 states (5.4% compared to 5.2%). Gov. Gretchen Whitmer aims for 60% of working-age Michiganders to earn a degree or credential by 2030.
The report names eight critical metrics of what it takes to be a Top 10 state, compared to Michigan’s three-year growth rank relative to all other states.
Business Leaders for Michigan targeted areas for improvement:
- Greatly increase growth in degrees and credentials using American Rescue Plan Act (ARPA) funding to boost credential growth and attract talent.
- Drive additional labor force participation by removing barriers to work and invest in childcare, broadband access, and affordable housing.
- Improve our K-12 education system and use ARPA funding to fund classrooms, expand teacher training and recruitment, and invest in summer learning programs
- Implement a long-term economic development strategy to improve competitiveness in four areas: site development, customer service, incentives, and talent
- Use one-time ARPA funds for:
- Regional economic development, site development matching funds, transition to electric vehicles and support for entrepreneurship/innovation/scale up activities
- Workforce training programs that fill talent gaps preventing business growth, support new job/sites and provide pathways for career progression
“Unless Michigan urgently addresses our economic and educational challenges, we may fall so far behind that we will never catch up,” Donofrio said. “If we invest and work today to overcome these challenges, we can build a prosperous state with a healthy economy and widely shared prosperity.”
John Mozena, president of the Center for Economic Accountability, a nonprofit organization for transparent economic development policy, told The Center Square that Michigan should focus on lowering taxes and barriers to work if it wants to attract talent.
Every business pays the corporate tax, but only some get subsidies, Mozena said.
“In reality, economic growth comes not from big businesses,” Mozena said in a phone interview. “Big Businesses are already big– they’ve done their growth – that’s why they’re big. Economic growth really comes from small businesses growing into big businesses and bringing the community along with them.”
Mozena said the city of Detroit has some of the highest commercial and industrial property taxes in the nation.
“We need to look at ways to get cities to make it easier to do business there, because cities are drivers of economic growth, or should be if they’re managed correctly,” Mozena said.
This article was originally posted on Michigan ranked 29th for economic environment