Time is Running Out to Address Michigan’s Population, Prosperity Decline

by Rick Haglund

Beginning a column with a cliché is considered a sign of unimaginative writing. But the old tale of the boiled frog almost perfectly describes Michigan’s demographic and economic plight.

It’s said that if you drop a frog in a pan of boiling water, it will immediately jump out. But if you place it in a pot of comfortably warm water and gradually turn up the heat, the frog won’t notice the temperature change until it’s too late.

A couple of important new studies warn Michigan is in danger of becoming the boiled frog. They show that Michigan has been losing ground to other states in population, wealth and educational achievement for decades.

Worse, the warning signs have long been known, but policymakers have mostly ignored them. And when they did act, they’ve made the wrong choices.

“Many of the solutions we’ve pursued in trying to grow income and create a more diversified economy have been too narrowly focused, lacked broad consensus and tried to recreate a world that no longer exists,” (my emphasis), Business Leaders for Michigan said in a May 10 study that calls for a “holistic” approach to education reform, business and talent development, and population growth.

Another study conducted by the Citizens Research Council of Michigan and Ann Arbor-based research firm Altarum, found that Michigan incomes, relative to the nation’s, have been falling for more than 70 years.

In 1950, Michigan’s auto-driven economy ranked 11th in personal income per capita, according to the CRC-Altarum study released May 17. Today the state ranks 34th as many of those once high-paying auto factory jobs have disappeared.

And inflation-adjusted wages in the ones that remain have hardly budged since just before the start of the Great Recession in 2007. The average weekly wage of an auto production worker in 2021 was $1,260, just $24 a week more than the average worker took home 16 years ago.

Meanwhile, Michigan is being left behind in the knowledge economy, where most middle-class jobs are being created, the Business Leaders for Michigan study said.

It found that U.S. knowledge jobs in areas such as software, engineering, accounting and marketing grew by 35% over the past 20 years. But Michigan had no net growth in knowledge jobs in that period. Zero, zilch, nada.

That’s largely because Michigan has failed to create, retain and attract the young talent employers need to fill those jobs. The state’s population has become older with virtually all its growth coming in the post-retirement age group.

This trend began in the 1970s when Michigan’s population growth started lagging the nation’s growth rate, according to the CRC-Altarum study. Since then, Michigan has fallen from the seventh-most populous state in the country to 10th. It has also lost six congressional seats in that time period, diminishing the state’s clout in Washington.

Future trends are disconcerting, to say the least. Michigan’s population of newborns through 24-year-olds is expected to decline by 6% through 2050, according to University of Michigan projections. 

Meanwhile, the state’s prime working-age population of 25-to-64-year-olds is forecast to grow by just 2% during that time. But the number of those 65 years and older is expected to jump by 30%.

The state’s aging population and lack of investment in public health are making Michigan sick, according to the CRC-Altarum study. Michiganders have higher rates of chronic disease and disability, and lower life expectancy than national averages. The state ranked 39th in overall health outcomes last year.

How did Michigan, which once was one of the most prosperous states in the country, become the second slowest-growing state in the nation and in the bottom third of states in household income?

It’s largely because of the choices we’ve made. Policymakers — and many Michiganders — have been in denial about the steep decline of manufacturing. They’ve chosen to try to restore the glory days with factory-building incentives rather than adequately invest in education, communities, transit and other things that would make Michigan more attractive to knowledge workers, including engineers and others in the auto industry.

And for 40 years of Republican rule in Michigan, which ended this year, the answer to virtually every economic problem in the state was tax cuts and smaller government. That clearly hasn’t worked.

Finally, there’s a general agreement among business, nonprofit, philanthropic, research and advocacy groups about what Michigan must do to grow its population and become more prosperous. 

Among those elements are improving K-12 education, producing more college graduates, improving quality of life, attracting more immigrants and raising living standards for people of color who are projected to provide the most working-age population growth in the state over the next three decades.

Leaders from these various groups must come together to develop a bold, new vision for Michigan and press Lansing policymakers to adopt it. The water is near the boiling point.