by Scott McClallen
The lifeblood of Michigan’s economy – workers – fell to a record low as COVID-19 continued to disrupt the workforce.
Michigan’s labor force participation rate – the proportion of working-age people working or actively looking for work – fell to a record low rate in 2020 and has slightly rebounded, according to St. Louis Federal Reserve data.
Fewer workers place the public and private sectors into a hiring crunch.
A $2 million grant from the Detroit Regional Chamber, Michigan Department of Labor and Economic Opportunity, and Michigan Office of Future Mobility and Electrification for the Detroit Regional Chamber Foundation and MICHauto aims to support high-tech talent.
“Michigan remains committed to investing in our state’s talent and implementing the MI Future Mobility Plan to lead future of global mobility,” Gov. Gretchen Whitmer said in a statement.
OFME and MICHauto will launch a pilot project with Kettering University and Michigan Technological University to retain students in high school FIRST Robotics, Square One Network, and VEX programs.
The infusion of cash aims to train Michigan’s labor force, a major barrier to companies’ considering relocating or expanding in Michigan. Many workers lack a degree or credentials, and other workers have stopped working or looking for work completely.
The Michigan Chamber of Commerce represents more than 5,000 members statewide.
Wendy Block, vice president of business advocacy at the Michigan Chamber of Commerce, said that statewide, employers are struggling to find skilled workers to fill critical jobs and grow their businesses.
“We must find new ways to ensure our students emerge from high school prepared to enter the workplace or go on to college,” Block told The Center Square in an email. “We must remain laser-focused on breaking down the barriers to employability, the barriers that are keeping too many Michiganders on the sidelines and one step away from success. We must improve connections between learning and careers to ensure individuals have quality jobs and employers have access to talent. We must increase the number of workers with high-demand credentials, degrees and skills to improve income and quality of life of Michiganders.”
The University of Michigan’s Economic Outlook for 2023-24 says Michigan’s payroll jobs count remained 2.1% below its prepandemic level as of September.
Michigan’s labor force participation rate peaked at 68.8% in the first quarter of 2000 before dropping for a decade and hitting a record low of 59.2% in 2021.
“We expect Michigan’s aging populace and early retirements to continue to suppress labor force growth in the future,” the UM outlook says. “The state’s labor force participation rate is likely to be one of the key metrics that will display the scarring effects of the COVID-19 pandemic for the longest period of time.”
James Hohman, director of fiscal policy at the free-market Mackinac Center for Public Policy, said if trends persist, the state of Michigan will lose residents by death and outbound migration.
“If present trends persist, by the middle of this century Michigan will be an older state, where deaths outnumber births, and which loses more residents to other states than it takes in from them,” Hohman told The Center Square in an email. “We hope that as Michigan settles into more normal economic conditions over the next two years, state leaders do not lose sight of the long-term challenges ahead.”
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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.
