Newspapers tended to start by reporting the economists’ prediction that the state would suffer two more years of job losses. But then they quickly followed by saying that the good news was, to quote the Detroit Free Press, “the worst is over.”
That’s based on the economists’ projections that the pace of job losses is expected to slow - not stop, but slow. They think Michigan will lose only 85,000 jobs next year and a mere 36,000 in 2011. How does someone count that as good news?
By comparing those numbers to those of this absolutely terrible year, when job losses are expected to be almost 300,000.
That’s what passes for good news these days. What was remarkable was that hardly anybody looked back on what the U of M economists said last year. Last year’s predictions turned out to be ridiculously optimistic. They then forecast we would lose only about a third as many jobs this year as we actually did.
The University of Michigan economists also predicted last year that unemployment wouldn’t get much higher than 11 percent, and that Michigan would be adding jobs again by 2011.
I was baffled by those numbers at the time. That was at a point when it wasn’t clear if any of the auto companies would survive.
This year’s forecast looks much more soberly realistic. Though any predictions today about the economy in 2011 are apt to be about as reliable as predictions about that year’s Kentucky Derby.
If you want the broader truth about Michigan’s economy, however, a lot of it did come out in this forecast, mainly stuff the papers didn’t report. Basically, the seminar demonstrated that the way of life we’ve enjoyed for decades is over, and isn’t coming back.
Here’s an example: Thirty years ago, General Motors had 249,000 blue-collar line workers making a good living at auto plants across this state.
When the current round of downsizing ends, the total number of GM workers in Michigan will be 21,300. More than ninety percent of all those jobs have been eliminated, most likely forever.
Last year, for the first time in history, Ford, Chrysler and GM accounted for less than half of all cars sold in the nation. Two years from now, their share is expected to be less than forty percent.
The economists don’t think unemployment will rise much higher, but they do agree state revenues will continue to shrink, meaning at least two more years of huge budget deficits.
Finally, George Fulton, the director of the research seminar which produces the forecast, was asked when Michigan’s employment picture would be more like the rest of the nation’s. “One of the rating agencies said it would take thirty years,“ he said.
He then added that he thought that was optimistic. But there is something positive we can take away from all this. The muscle and manufacturing based economy we were born into is essentially over. Nobody is going to give us something to replace it. We have to invent a new Michigan future, on our own. So let‘s get busy, and decide where to start.
Comments