Michigan job openings are accelerating

| Wednesday, February 25, 2015
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As recently as last summer, Gov. Rick Snyder said there were more than 70,000 job openings posted by employers on the Pure Michigan Talent Connect website. Many of those jobs, he said, were for technical jobs that required training beyond high school, but not a four-year degree.

Snyder has repeatedly used the 70,000 job openings as evidence that there is a mismatch between the skills of the state's work force and the skills employers need now. To address that purported skills shortage, Snyder in December signed an executive order creating the Department of Talent and Economic Development and the Michigan Talent Investment Agency "to continue Michigan’s climb as a national leader in talent development and investment in skilled trades."

Today there are more than 91,000 available jobs listed on the Talent Connect website. Does that mean Snyder's efforts to connect workers to available jobs are failing? Not exactly.

It's not clear how many of those jobs are for skilled positions that require technical training. Some postings could be for jobs that are no longer available. And employers sometimes post jobs simply to collect resumes for future openings.

University of Michigan economist Don Grimes told me the growth in job openings on the Talent Connect website is good news for the economy and not just because more jobs are being created. The increase also could mean a growth in job churn in which workers are changing jobs for higher pay.

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Michigan's training focus not aligned with fastest-growing middle-class jobs

| Monday, February 23, 2015
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Michigan's work-force development policies are concentrated on helping employers find qualified workers in the skilled trades and other occupations that require less than a college degree.

Employers say these jobs are in high demand and they can't find enough people to fill them. Gov. Rick Snyder says his top priority is re-establishing vocational and technical education programs that lagged over the past decade or so.

But nationally, most of the growing occupations that pay middle-class wages are not the kinds of jobs Michigan is touting. A series of graphics produced by the New York Times using census data found declines in the number of jobs over the past 32 years in such blue-collar occupations as precision machine operators, construction trades and welding.

Nursing, computer science, management and teaching saw the most growth in middle-class jobs--those paying between $40,000 and $80,000 a year--between 1980 and 2012. It's also interesting to note that with the exception of mathematical and computer scientists, the much ballyhooed STEM occupations were not among the fastest-growing middle-class jobs.

It appears the kind of jobs Michigan is promoting won't rebuild a middle class that's been devastated by the decline in low-skilled manufacturing jobs.

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Here's why Michigan Gov. Rick Snyder will never be president

| Thursday, February 19, 2015
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Beheadings by the brutal terrorist group ISIS are dominating the news. A new survey found that more than a quarter of Americans think ISIS is a true representation of Islamic society. And some are predicting that Muslim-bashing will be on full display in the 2016 Republican presidential primary.

So what is Republican Gov. Rick Snyder, who's occasionally mentioned as a potential presidential candidate, doing? Establishing a commission to promote the interests of people of Middle Eastern descent living in the state.

Snyder signed an executive order on Wednesday creating the Middle-Eastern American Affairs Commission. The commission replaces the Michigan Council on Arab and Chaldean American Affairs, which the governor created by executive order in 2013.

Snyder said the name change "reflects the growing diversity of new Americans who have come to Michigan from the Middle East."

The 15-member commission will "work to enhance economic opportunity, prevent discrimination and spread awareness of Middle-Eastern American culture," according to the executive order.

This is the kind of thing that confounds people about Snyder. He's delighted conservatives by signing a right-to-work law, cutting business taxes and supporting the state's ban on gay marriage. But he's angered them on other issues, including his support for expanding Medicaid under the Affordable Care Act and vetoing a bill that would have made it easier for people accused of domestic violence to get a concealed weapon permit.

Snyder, whose motto is "relentless positive action," refuses to throw out red meat to conservatives just to watch them salivate over it.

He has been particularly outspoken on the economic benefits of immigration, which many are skeptical about, particularly as it relates to those coming from the Middle East.

Stupid rumors about Dearborn, which has a large Arab American population, coming under the grip of Sharia law won't die. And recently, a widely circulated, but untrue, report said that Dearborn has become a "no-go" zone in which non-Muslims aren't allowed to enter. (That was probably news to anyone who works at Ford Motor Co. headquarters in Dearborn.)

Against this backdrop, Snyder is offering a welcome mat to the state's expanding Arab American population. Said the governor:

The Middle-Eastern American community is growing in our state and this reorganization will help ensure Michiganders from multiple backgrounds have the best opportunities to actively work together and participate in our comeback.

That won't help any presidential aspirations Snyder may harbor, but it's the right thing to do.

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Gov. Rick Snyder wants Michigan to get back to its blue-collar roots

| Wednesday, February 18, 2015
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Michigan was once known as the state where workers marched off to jobs in factories every day carrying their metal lunch boxes. We made things and felt darned proud about it.

We still make a lot of stuff, primarily cars and other durable goods. But the Great Recession, which lasted a decade in Michigan, wiped out hundreds of thousands of assembly and skilled trades jobs. Employers also ruptured the pipeline for these jobs by cutting apprenticeships and training programs.

And many public schools cut vocational education programs as the state toughened core academic requirements for graduation. Plus, there wasn't a lot of demand for jobs requiring voc ed as the economic was cratering.

But now that the automakers and other manufacturers are back on their feet, they want state government to produce the kinds of workers they need. Snyder and the Legislature are more than happy to oblige, pumping tens of millions of dollars into training programs for welders, machinists, electricians and other blue-collar jobs.

Snyder told the Associated Press that Michigan must re-establish vocational and technical educations as an "equally honorable, equally important and equally well-compensated" career track.

He's not alone. Many governors are emphasizing technical careers requiring some college as an alternative to pursuing a four-year degree.

Yes, there is a need for plumbers, welders, auto technicians and a variety of other occupations. But focusing too much on promoting these jobs carries some risk.

What will happen in the next, inevitable recession? When the economy dips, employers are often quick to dump the kinds of workers they were demanding just a few years earlier. That's why many are reluctant to train for these jobs. Is there a way that layoffs and talent drain can be minimized when business slows?

Unfortunately, there is a political aspect to favoring technical careers requiring associate degrees or certifications over university degrees.

Snyder is to be commended for proposing increases in state support for community colleges and universities in his fiscal 2016 budget. But many of his fellow Republicans are finding political gain in characterizing universities as elite bastions of liberalism.

Wisconsin Gov. Scott Walker is attacking on the University of Wisconsin system in raising his profile as a possible Republican presidential candidate. He wants to cut $300 million from the system's budget, but backtracked from rewriting portions of its mission statement, known as the Wisconsin Idea, from "seeking the truth" to meeting "the state's work-force needs."

Such attacks on universities play well at a time when many believe college tuition is too high and job prospects for new college grads are weak. Never mind that states have slashed support for higher education and that young people, who, as a group, are doing the best financially are college graduates.

It's fine to point out there are good jobs available for those who don't want to get a four-year degree. But downplaying the value of a bachelor's degree, or higher, is dumb.

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Metro Detroit job growth lagging the state

| Tuesday, February 17, 2015
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It's a bit of a mystery. The auto industry is booming, but job growth in metro Detroit--the heart of the auto industry and home to 42 percent of the state's work force--is lagging just about every other region of the state.

And a new forecast by the PNC Financial Services Group says tepid economic growth will continue this year in metro Detroit.

The region posted a seasonally adjusted jobless rate of 7.5 percent in December. That was 1.2 percentage points higher than the state jobless rate of 6.3 percent for the month.

Metro Detroit's labor force also has been shrinking, down by 29,000 workers and those seeking work in 2014. Michigan's labor force grew by 47,000 last year, according to the Bureau of Labor Statistics.

The unemployment rate in metro Detroit in December, not adjusted for seasonal variances, was higher than in every region of the state except for Northeast Michigan.

University of Michigan economist Don Grimes has long complained that the monthly jobs data, known as the current employment survey, is undercounting Michigan jobs. He thinks the same thing is happening in metro Detroit and that the numbers will eventually be revised upward. It's unlikely, he told me, that metro Detroit's labor force could be shrinking while it's increasing statewide.

Nevertheless, the PNC forecast says metro Detroit "will battle for every ounce of economic momentum it is able to achieve in 2015."

It predicts that metro Detroit will see job growth of 1.3 percent this year, lagging the national growth rate of 2.1 percent. But housing starts, home prices and median household income will exceed national rates.

PNC says metro Detroit's challenge will be in diversifying its economy and reversing outmigration trends:

Detroit’s economic future will always include auto design and manufacturing as a primary driver. However, the
market area must work to grow a broader array of industries. The next several years will feature businesses
looking for expansion opportunities, and new startups searching for cost efficient locales. Detroit’s capacity to
take advantage of its newfound cost strengths offers the means to start defining its longer-term development path.

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Detroit challenging Silicon Valley? Not so fast

| Monday, February 16, 2015
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There has been a lot of encouraging talk recently about all the tech startups and entrepreneurial growth in Detroit. A new report from Oakland County-based Automation Alley even found that metro Detroit (including Ann Arbor) has nearly as many technology jobs as California's famed Silicon Valley.

The report, compiled by the Anderson Economic Group in East Lansing, said that metro Detroit had 171,000 technology jobs, compared to 180,000 tech jobs in metro San Jose, aka Silicon Valley, in 2013. Detroit also had slightly more technology industry establishments than San Jose in 2012 and produced thousands more graduates in STEM (science, technology, engineering and math) subjects in 2013 than San Jose.

But those statistics tell only part of the story. Detroit might have nearly as many technology jobs as San Jose, but the value of goods and services being produced per worker in Silicon Valley dwarfs the value of metro Detroit's output.

Gross domestic product per capita in metro San Jose in 2013 was $100,115, more than double metro Detroit's GDP per capita of $49,653, according to the Bureau of Economic Analysis. The Automation Alley study also included Ann Arbor, which reported GDP per capita of $54,734 in 2013, significantly lagging San Jose's performance.

The story here is a richer industry mix in Silicon Valley than in Detroit. The computers, software and other goods and services produced by Silicon Valley companies are more valuable, in total, than Detroit's output, much of it auto related. Tech giant Apple, for instance, has a market cap of $740.2 billion, more than five times the market cap of General Motors, Ford and Fiat Chrysler combined.

And a new study by the Brookings Institution found that San Jose had the third-highest GDP per capita in the world last year. Detroit ranked 237th among the world's top 300 metro economies.

It's great that metro Detroit is producing more tech jobs. And it's particularly encouraging to see all the entrepreneurial activity occurring in Detroit, which just emerged from bankruptcy. But let's not think we're nipping at Silicon Valley's heels quite yet.

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Is manufacturing killing Detroit and Flint?

| Monday, February 9, 2015
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A provocative article on forbes.com asserts that Detroit and Flint are struggling in large measure because they're engaged in a fruitless effort to save manufacturing jobs.

Author John Tamny asserts that cities doing well economically--New York, Los Angeles and Seattle among them--are thriving because they've embraced new sources of wealth. Tamny writes:

One of the best examples of this is the richest city in the world, New York City. What’s perhaps been forgotten is that as recently as the 1920s more manufacturing in total dollar value took place there than any other American city. Fast forward to the present, it’s safe to say that next to nothing consumed by New Yorkers is actually manufactured within the city’s limits. This bears repeating: Less than 100 years ago New York was the U.S.’s top manufacturing hub, whereas today manufacturing there is near non-existent.

Yet despite the above truth, New York remains the world’s richest city.

Decades ago Detroit and Flint, fueled by a high concentration of auto production and jobs, were among the richest cities in the United States. Those of us in Michigan know what happened since then all too well. Tamny argues that auto industry bailouts and state incentives to maintain manufacturing jobs will keep these cities and the rest of Michigan from attaining the prosperity of locales less dependent on manufacturing.

Counterintuitive as this may seem, the sad fact that local and national politicians have propped up GM and Chrysler in order to “save jobs” explains why Michigan’s once important cities are doing so poorly, all the while driving away their best and brightest. As I write in my upcoming book, Popular Economics, to create lots of quality jobs we must constantly be destroying the work of the past.

Michigan's economy was saved by the federal auto bailouts of Chrysler and GM. But it might never truly prosper if the state's future focus remains centered on manufacturing.

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