Skip to comments.Despite Popular Thinking, Michigan Economy Is Not Determined By Automotive Industry
Posted on 01/15/2013 5:30:33 AM PST by MichCapCon
Lansing Mayor Virg Bernero says his staff is marketing the city as an automotive center.
MLive Political Columnist Rick Haglund wrote: Michigan still is a state that largely rises and falls on vagaries of the century-old auto industry, regardless of actions by Lansing policymakers.
Yet economic analysts say that thinking is outdated and, in some ways, inaccurate.
Auto and auto parts manufacturing jobs account for 3 percent of the total jobs in Michigan and Michigan's jobs recovery has been built outside the automobile industry.
"The auto industry gets more attention than it deserves in Michigan," said University of Michigan Economist Don Grimes, in an email. "Our long-run future as a state will not be determined by what happens to employment in the motor vehicle manufacturing industry."
General Motors Co. provides Lansing with 3,688 jobs, according to city of Lansing documents. The Greater Lansing Metropolitan area had 220,759 jobs.
Michigan's motor vehicle manufacturing and parts manufacturing jobs dropped 57 percent in the last 12 years, going from a combined 325,400 jobs in November 2000 to 139,800 as of November 2012. Michigan has just over 4 million jobs, meaning that auto jobs accounted for about 3 percent of all the jobs in the state.
We are still seen as an automotive state, said James Hohman, a fiscal policy analyst with the Mackinac Center for Public Policy. Its largely because the politics has little to do with the economics.
Grimes said motor vehicle and parts manufacturing increased by 22,500 from November 2009 to November 2012 while total employment increased in Michigan by 142,700.
So the vast majority of job gains were not in motor vehicle manufacturing, Grimes said.
About half the job growth in the past three years was due to the auto industry or spin offs from the auto industry, Grimes said.
The other half stems from improvement in the overall business climate unrelated to what has happened to the auto industry, Grimes said.
Grimes said the auto industry jobs recovery has reached its peak and in a few years it will begin to decline again. Grimes predicts an aging population will be spending more of their money on health care, travel and restaurants rather than consumer durable goods like cars.
So future job gains will be determined by our overall business climate, not the auto industry rebound, he said.
I’m not so sure I agree. At least on the lower half of the lower peninsula. You can’t go driving down any country road for very far before stumbling across some little factory that is cranking out something or other for the auto industry.
>>Lansing Mayor Virg Bernero says his staff is marketing the city as an automotive center.<<
Can’t blame (D)/UAW Lovin Virg for trying.
I had never heard of Virg until he ran for governor. He was on the radio and saying all the right buzzwords to apply to the general population. Even I was cheering him on and I’m solid (R). So then I scratched the surface on Virg and that’s all took. A union lovin flunky who says jobs jobs jobs but means only union jobs.
Anyway, good for Lansing for getting Camaro. It could have gone somewhere else. And now that Michigan is RTW, it’s all up to the workers. As it should be.
Even things you don’t really think of as automotive often have close ties to the big 3. When I worked in a Bindery about 98% of the books we made were automotive technical manuals or parts catalogs. We even printed union contracts.
Outside the auto industry I worked in a school, a sawmill, and for Dawn foods.
Auto industry manufacturing jobs, even today, are very well paid, and the more employment in that industry, the more money there is getting spread around to other businesses. It’s probably correct to say that most employment in Michigan (in particular, the “workers” in Michigan’s copious bureaucracy) is the direct or indirect result of the auto industry.
The number of auto industry jobs shrank starting with the OPEC embargo in 1973-1974.
That was in large part responsible for Jimmy Carter’s winning the 1976 election by a small margin over Gerald Ford.
The overall US economy continued in a death spiral which was intentionally worsened by the incompetent Demwit dullard from Georgia, who declared the OPEC-engineered disaster “the moral equivalent of war” — and then proceeded with enabling and appeasement of jihadists in Iran and Afghanistan. On the way through he shared a Nobel Peace Prize with Begin and Sadat.
The auto industry hemorrhaged jobs to the Far East — Japan, then Korea, and various other countries manufacturing auto parts, including Mexico. European auto manufacturers have moved in and out of the US labor market multiple times. Daimler-Benz left Chrysler a smoking ruin and laid off thousands in Michigan.
Continuous negative progress (ahem) was made under Jenny Grandstand. It would have been great if she had been assassinated during her first year in office. Or first month.