Economics In Brief
Economic improvement should continue for both the U.S. and Michigan, although the state will recover at a slower pace than the nation, according to a survey from Business Leaders for Michigan, the state’s business roundtable.
“The economy, both in the U.S. and Michigan, continues to get better,” said Doug Rothwell, president and CEO of Business Leaders for Michigan. “Previous surveys of Michigan’s CEOs predicted the recovery wouldn’t kick into full gear until the second half of this year and that forecast seems to be coming true. This quarter’s forecasts are buoyed in part by the fact that the Legislature and governor appear serious about making significant policy changes.”
Of the executives surveyed, 35 percent believe Michigan’s economy will improve over the next six months, one-third less optimistic than the national forecast; 67 percent think Michigan’s economy will be better 18 months from now — an improvement of 11 percent from the fourth quarter survey; and 35 percent forecast increased hiring in Michigan in the next six months.
The federal budget passed for the remainder of this fiscal year, and Michigan’s workforce development agency, Michigan Works (along with other state agencies), will feel the sting.
The budget requires a rescission — or cut — from this year’s allotted spending, according to Liza Estlund, director of the Bureau of Workforce Transformation, a division of Michigan’s Department of Energy, Labor & Economic Growth.
Estlund said that the cut will be significant, approximately 12 percent, and will come in the last quarter of the current fiscal year and the first quarter of the program year, which will impact people currently in Michigan Works programs and those trying to access them.
“Michigan Works Association offices will remain open but may have to reduce access to, or eliminate, certain programs if there is no funding left in those areas,” Estlund said.
A new forecast by the Center for Automotive Research in Ann Arbor predicts more than a third of all new Michigan jobs through 2012 — 43,150 — will be in the auto industry.
CAR chief economist Sean McAlinden says that GM, Ford and Chrysler are “increasingly concentrating their domestic operations at home.”
Currently, about 60 percent of the Detroit Three’s U.S. employment is in Michigan, according to McAlinden, who forecasts that by 2015, 67 percent of their employment will be in the state. McAlinden’s forecast also predicts that automotive employment will flatten after 2012.
Michigan Gov. Rick Snyder signed legislation expanding the scope of the 21st Century Jobs Fund to more industries involved in research and advanced technology. The governor called for the legislation in his State of the State address, saying it will help create jobs.
“If you look at history, Michigan’s most rapid periods of job growth came when we were a leader of technology and innovation,” Snyder said. “By eliminating restrictions and opening up the 21st Century Jobs Fund to a larger base of companies that can compete for resources, we are taking a step toward creating an environment where small businesses can grow and create jobs.”
Previously, only companies in specific sectors could compete for funding through the jobs program, including the advanced automotive manufacturing and materials technology, homeland security and defense technology, life sciences technology and alternative energy industries.
Thanks to the new legislation, companies engaged in information technology and agricultural processing can also compete for funds to build and sustain their businesses and help create jobs.
$14 PER HOUR IS MINIMUM NEEDED TO MEET BASIC EXPENSES
A new study, commissioned by nonprofit Wider Opportunities for Women, calculates how much income it takes to meet basic needs, such as housing, utilities, food, health care, transportation and (in the case of working parents) child care without relying on public subsidies.
In order to meet basic expenses, save for retirement and emergencies, a single worker needs an income of $30,012 a year, or just above $14 per hour, nearly twice the minimum wage.
A single worker with two young children needs an annual income of $57,756, or just over $27 an hour, to attain economic stability, and a family with two working parents and two young children needs to earn $67,920 a year, or about $16 an hour per worker.
Last year, for the first time since the Great Depression, the federal government is paying out more to U.S. households than it’s receiving in tax revenues.
According to U.S. Census data, 59 percent of Americans get at least one federal benefit: an estimated 46.5 million get Social Security; 42.6 million get Medicare; 42.4 million get Medicaid; 36.1 million get food stamps; 12.4 million get housing subsidies; 3.2 million get veterans benefits; and 3.5 million are receiving extended unemployment benefits. All in all, it adds up to $2.3 trillion, more than the $2.2 trillion U.S. households paid in taxes in 2010. Government cash handouts account for 79 percent of household growth since 2007.