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?!
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