Sure Glad That Decade is Over

By Data Driven Detroit’s Kurt Metzger for The Center for Michigan

While Michiganians, or Michiganders as our new Governor prefers, knew that the first decade of the 21st Century had been hard on the state, the first 2010 Census results, released on December 21, truly “brought it home.”  With a 2010 population count of 9,883,644, Michigan was the ONLY state to lose population over the decade, dropping 54,800 or 0.6 percent.  The last time the state experienced such loss was in the first half of the 1980s, though population gains in the second half of the decade outstripped the losses.  The past decade reversed this scenario as gains over the first five years were more than wiped out by five straight years of population loss.

Figure 1.  Michigan’s Population, 1910 – 2010

In addition to losing population, Michigan lost another Congressional seat for 2012.  This marks the 4th straight decade of representational loss, bringing us down to 14 Congressional seats – the lowest number since 1920.  Between 1920 and 1930 Michigan gained four seats, increasing from 13 to 17.  The state reached its highest count of 19 seats in both 1960 and 1970.

Population change is the result of: Natural Increase, the difference between births and deaths, and Net Migration, the combination of Immigration and Domestic Migration (movement within the 50 states).  With the exception of immigration, Michigan’s numbers went the wrong way on all fronts.  The number of births decreased by 11 percent between 2000 and 2008 (latest year available), while the number of deaths increased by 1.5 percent.  The birth rate of 12.1 live births per 1,000 population was down by 12.3 percent over the decade and placed Michigan in the bottom 10 states.  While this decrease has been driven, in part, by economic uncertainties that have caused couples to postpone parenthood, the more important factor has been the loss of residents in their childbearing years – the younger singles and couples who have both the education and the flexibility to move.  This trend must be reversed because 2011 marks the year that the first baby boomers turn 65, a fact that in an older state like Michigan signals an increasing death rate over the years to come.

While declining levels of natural increase slowed growth, and immigration levels remained fairly consistent, though decreasing in the later years of the decade, Michigan suffered most from domestic outmigration.  Over the course of the first nine years of the decade, Michigan is estimated to have lost 537,471 residents to other parts of the country.  It is these movers that helped to grow states like Georgia, South Carolina, Texas, Nevada and Arizona.

Figure 2.  Domestic Migration for Michigan, 2000 – 2009

While each person who left the state has his or her own reason for doing so, one can certainly point to the economy as the primary culprit.  Michigan’s unemployment rate led the nation through most of the decade and only recently fell to number 2 behind Nevada.  November 2010 figures have Michigan’s rate at 12.4 percent, trailing Nevada but tied with California and just above Florida’s rate of 12.0 percent.

Table 1 summarizes Michigan’s employment picture this decade.  While the labor force has remained relatively steady, dropping by 5.8 percent, the number of employed decreased by 760,000, or 15.3 percent, while the number of unemployed increased by 460,000, or 242 percent!  While all industries suffered, it was manufacturing – Michigan’s bread and butter – that took the largest hit.  Manufacturing jobs in Michigan fell by almost half – 48 percent – dropping from just under 900,000 in 2000 to about 463,000 in 2009.  While there has been some good news on the manufacturing front in recent months, the number in October 2010 is still about 470,000.

Table 1.  Michigan’s Labor Force, 2000 – 2010

The last thing to address in this brief decade overview is the economic well-being of Michigan and its households.  While this analysis will focus on per capita personal income and median household income, let us not forget the foreclosure crisis that has kept Michigan in the Top 5 states since its inception in 2005.  In addition to creating more out-migrants, we have also seen increases in the numbers of homeless and families doubling up with neighbors and relatives.

The Bureau of Economic Analysis measures per capita personal income (PCPI) for the nation, states, metropolitan areas and counties.   While Michigan’s income well surpassed the national average during the 1970s, the recession of the early 1980s pushed it below average, where it stayed until a brief rebound in 1994 and 1995.  By 2000, however, Michigan’s PCPI had fallen to just less than 97 percent of the national average.  Losses in 2001 and 2003 were followed by a brief rally in 2003.  However, the next four years brought a steady decrease to 86.8 percent in 2007, and a low of 86.6 percent in 2009.  While income losses can be directly tied to the loss of jobs, particularly manufacturing, we must remember that Michigan’s income has remained artificially high due to those highly paid auto-related manufacturing jobs – jobs that did not require high levels of education.  The restructuring of the nation’s economy has made the need for post-secondary education more critical than ever, and Michigan’s low level of college graduates (Michigan ranked 37th in 2009 with a rate of 24.6 percent) has resulted in its rapid income drop.

One last income number really drives home the story of Michigan’s decade decline.  The median household income for Michigan dropped by 21.3 percent between 2000 and 2009, while the national average fell by one-third of that -7.1 percent.  When translated to 2009 dollars, we find that every Michigan household, on average, lost over $12,000 in buying power.  Such a loss ripples through the entire economy and decreases the need for all the retail, service and construction jobs that feed off of our disposable income.

Table 2.  Per Capita Personal Income (PCPI) for Michigan, 1990 – 2009

The loss of income has also translated into increased demands on State government.  In January of 2000, 236,412 Michigan residents were receiving food assistance payments.  As of September 2010, the food stamp roles had increased to 1,884,751 – a 7-fold increase!

Well, here we are at the beginning of a new decade.  We have a new Governor and the forecast for both the nation and Michigan is a slow, but steady, recovery.  The message for Michigan, in addition to “transformation” and “innovation,” must be EDUCATION, EDUCATION, EDUCATION!  Unless we decide to focus our resources on the education of our residents – from birth to career – Michigan will continue to experience decreasing population, employment and income.  The future is ours to decide.

Sources: U.S. Census Bureau, U.S. Bureau of Economic Analysis, Michigan Dept. of Energy, Labor Economic Growth, Michigan Dept. of Human Services, This entry was posted in Fresh Thoughts.

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