Right now the state of Michigan has what is probably the the worst economy in the nation. The unemployment is the highest at over 12%. That’s right 12% in other words 12 out of every 100 people you know is unemployed if you live in Michigan. This is very bad news especially for people like me who live in Michigan.
The largest of concerns in the state right now is that of the auto industry going under. This Titanic of
General Motors Head Quarters
industries is sailing towards disaster but the auto industry is just the tip of the iceberg. The President last week said that bankruptcy is the most likely and probably the best option for General Motors and Chrysler. But these options are considered to be catastrophic to these two troubled companies. Both fear that the consumer will baulk at the idea of buying a car or truck from them if they are in bankruptcy proceedings.
One major problem with Michigan’s economy is that it fails in diversification. Michigan has largely depended on the auto industry for decades, probably closer to 100 years would be a more accurate statement. This has been the flagship of the economy and tens of thousands of jobs hang on the auto industry. Not just those employed by The Big Three but by their suppliers as well, if The Big Three go under so do their suppliers. Not to mention the dealerships that stand to go out of business.
As pointed out by Greta VanSusteren of Foxnews textiles industries in other parts of the country make the textiles that go in the interiors of cars. The arm of the auto industry is far reaching. Think about it; I’m sure you will think of some other industries that feel the pinch of the auto industry.
But the problem runs deeper than the auto makers in Detroit, Michigan 10 or 12 years ago was a state known as a job creator according to Steve Moore of The Wall street Journal who spoke with Greta on the subject.
What’s happened in that state - and, by the way, this is an amazing statistic. About 10 to 12 years ago when John Engler was governor, Michigan was one of the leading job creators. And now it is, of course, losing jobs. I think they lose about one job every six minutes in Michigan.
It is just a tragic story, and I think it is a result of too much regulation, overspending, high taxes, and also, Michigan is not a right to work state. And so a lot of factories have moved out of Michigan to states like Tennessee and Texas and Florida.
Governor Jennifer Granholm is of course a big player in the many other reasons why the state is hurting so badly.
Michigan Governor Jennifer Granholm
Many other businesses have left the state to establish their operations in states with lower tax rates and therefore higher profits. You are right about the problems in this state.
“And it is interesting because the governor there, Jennifer Granholm, has been governor for almost eight years now, she has been very much like a Barack Obama in her economic strategy - more spending, higher taxes, we’re going to invest in all these programs.
And it has been a complete catastrophe. And my worry is that Barack Obama wants to make America look like Michigan, not make America look like Texas,” said Moore.
To further expound upon the argument I have found statistics showing that the young talent which Michigan needs to succeed are leaving the state in ever larger numbers. The lack of jobs in the state and higher income and property taxes have chased many graduates out of Michigan.
Here is the article from The Detroit News:
In a nutshell it states in one telling clip, “There are more recent MSU grads in Chicago than in any other metro area — including any community in Michigan. While the Windy City has always been a destination for Spartan grads, the number going there — and other vibrant urban centers such as Minneapolis and New York — is growing.
The number leaving the state has doubled since 2001, from 24 percent to 49 percent, according to a school survey.
Michigan-native grads of the University of Michigan are even more likely to leave — 53 percent left in 2008, according to U-M.
By contrast, a similar survey at North Carolina State, found only 30 percent of graduates left North Carolina.
On average nationally, those earning bachelor’s degrees today can expect to earn $900,000 more over their lifetimes than those with only a high school diploma, according to the Census Bureau.
Multiply that by Michigan’s net loss of 18,000 people with college degrees in 2007 alone, and Michigan faces a devastating future loss in tax revenue.
There are many problems with Michigan’s economy, as I said earlier one of them is diversification. Michigan has all its eggs in one basket (The auto industry), if it is to survive and prosper it needs to spread around its potential.
Granholm has made the effort to do so. But this should have been done decades earlier, she is guilty of what every other governor before her is guilty of; running the state with their heads in the sand. I have seen more and more ads as of late to promote the clean energy industry in Michigan and this is a good idea but its a day late and a dollar short.
Michigan’s economy is suffocating under the the blanket of a heavy tax burden placed on the chest of its citizens and its businesses. As more people leave the state in hopes that the grass is greener on the other side of the state line Michigan’s tax revenues plummet.
To continue on this course is madness. It’s a Cracked…. State?!
[...] 04/04/2009 Steve Jobs - Apple Store 5th Ave. (urban views · by Markus Hartel) Auto Industry Isn’t the Only Problem in Michigan - crackedworld.com 04/04/2009 Right now the state of Michigan has what is probably the the worst [...]
There is a reason why Honda, BMW, Mercedes, and now VW have all invested money in the US to build autos in the South. Imagine how much better Michigan would be were those factories built there? There are already tons of skilled automotive workers ready to put cars together. It is all because of Democratic politics.
Tell me about it.
You couldn’t be more correct. They are willing to have parts shipped hundreds of miles further to avoid Michigan’s higher Income taxes and regulations and basic gubernatorial stupidity.
As always thanks Harrison
I know I’m late to the game, but since Michigan’s woes ARE spreading countrywide, I figured now was as good a time as any.
Wow, some half truths and a bunch of misguided thinking.
Yes Michigan is in the dumps.
Our “unemployment” rate is closer to 25% if you count those working part-time, that need full time and the tens of thousands that have completely given up (and are not counted). It has only barely come down from last April, and truthfully I don’t see ANY hiring outside of two or three companies.
It is not JUST high taxes and more regulations, fines, punishments, jailings, protections than every where else. It is the pervasive union attitude.
I’ve managed employees in many different states over the years, Michigan’s union entitlement has infected most of the state.
“Not my job” is the phrase most uttered by a Michigan employee. A close second is “we are being screwed.” We can kid ourselves all we want, but when a business comes to town (or state) to see if they want to open there, one of the first things they do is talk to other business owners. I can tell you that many don’t have great things to say about the average Michigander’s work ethic. Add that to the taxes and any sane person would take their money elsewhere.
While we did have tons of auto, our pain over the past 8 years wasn’t just due to that. During the past eight years we lost manufacturing facilities from all of the following companies/products: La-Z-Boy, Pfizer, Whirlpool, Emerson (tvs), Steelcase, Caterpillar and that is just off the top of my head. NONE of those were “automotive.” And not all were/are manufacturing either. But they are still closed down.
Our overall population is only down slightly. But the demographics have drastically changed from 2000. Michigan received, and kept, many Katrina refugees, we also have a hotbed of illegal foreigners from countries both close and far. Michigan has been running 4th in the country for people signing up for disability (as we are 15th or less in population, that is a death knell).
The one thing we seem to do very well, and Jenn does it better than most, is provide welfare benefits and state employee paychecks and benefits. Third best paid correction officers in the country, sixth best paid teachers, third best paid governor, first spouse with the second largest budget in the country (and NO citizen can name him, nor what he does for us to deserve his paycheck or staff), and, of course, a legislature that grows fat and paid for life for less than 12 years work (we have term limits - lots of farkin good that has done).
To wrap it up, if you live here, it is worse than you think and if you live elsewhere, you better look to what we have done and then work hard to make sure it doesn’t happen in your state. For many, I fear it is too late.
You make many good points; another company that could be added to your list is Brunswick, they moved to Mexico and I believe to China now.
I also agree with you about the Union attitude in this state I sited the autoworkers because nothing exemplifies that problem better. They are the poster-child for abusive unions and they are the biggest problem of the big three.
It has been my understanding for some time now that other states have a part-time legislative branch which has got to oblige a smaller payroll than Michigans. I wonder how many of Michiganders would be willing to take on the positions for free or on a part-time, pension free basis.
I most certainly would be interested to see some info on that, every other state in the country has a better economic state than we. If there is any truth to the part-time governance of them than we need to follow suite after all we are 50th of 50 there is incentive to try what other states are doing.
Thanks for your thoughts MBO