This was mentioned by people in yesterday's Michigan Governor's race diary and it still has me wondering. Michigan's economy is possibly second only to California in terms of problems, and to hear everyone tell it Michigan is on the brink of great things do to Jennifer Granholm, but I don't know that I see it. And, living in Ann Arbor, at least part of my life is spent living in a city that is better on the whole than most of Michigan (I work in Detroit, so part of my life is spent working in an area that is worse on average than the state as a whole). Worth thinking about further below the fold...
Michigan does have a best of times and worst of times situation going on in the state economy. Automotive employment continues to decline, and what positions that come into the state are coming in at much slower rates than the automotive jobs are declining (we have companies hiring in the 10s or 100s, while GM or a large supplier lets go of 10,000 at a time). Its bad enough for educated workers that when Obama promoted education at a recent speech he made in Warren, MI I cursed a bit under my breath (the most likely unemployed person you'll meet at a Michigan job fair is not an unemployed factory worker, but rather an unemployed engineer, half the time with some kind of a graduate degree). Its the lack of jobs for even the educated workforce that have led to Michigan having the worst unemployment in the country.
Michigan is also one of the only state's that is hurt most by the current fact that small business is not the "next large business in the making" but rather the free range chickens of the economy, once they are deemed a threat Big Corporations either buy them up or put them out of business. Having said that Michigan is home to some of the better small businesses in the country, among them Energy Conversion Devices (the second largest domestic solar power producer) as well as food safety company Neogen (which has 40% of the food safety diagnostic substance market, which is small but growing), and small biotech companies Aastrom and Asterand (Asterand's technical headquarters is in the UK where the stock is traded but 2/3 of their employees work in Detroit).
Michigan is also set to be a player in the movie business with the development of the Allen Park-based Unity Studios and the Pontiac venture finance by shopping mall magnate Alfred Taubman (which was originally called Motown Studios, but has since been renamed). But I don't see these various ventures as providing more than 25-30,000 people with jobs, which is hardly a major industry in a state of 15 million plus. And Michigan's present budget crisis (which I would argue is second only to California's, as we have to fix a $2 billion hole in the current budget before we can even think of the next fiscal cycle) is likely to lead to another hefty tax hike (we're 20th overall in taxes, which isn't bad but we have to be in the upper 20% to think of attracting new industry's), which won't do the state much good.
The state's universities remain a positive, but that pretty much seems to be limited to providing phenomenal degrees to students who promptly leave the state never to return during their economic primes (the state's that are the players are those that have the highest number of residents ages 25-35 with college degrees or higher, exactly the kind that are leaving the state at the speed of sound), though the University Research Corridor might provide some bonuses (never mind that the last research that truly provided any economic benefit for the US was the internet, which was developed in what? the 1970s?).
All in all? Despite the tremendous number of companies coming into the state (most simply for the "Tax Credit for Jobs" bribe, which usually far outweighs the actual money spent on workers) none are coming into the state enmasse that aren't already here. And none of our homegrown companies are likely to provide the blockbuster that Silicon Valley has for California and Wallstreet has (in the past) provided for New York as they've had a long time to be blockbusters and none of them has (and a state's economic fortunes rise and fall with their big companies, not their small companies). So I can't help but forsee a situation in which Michigan continues to unravel at the seams (all the poorer for me, since I couldn't escape, much to my detriment).