Economics In Brief
LEADERS SAY FRAMEWORK SECURED FOR PROSPERITY
Michigan has the framework in place to climb back to prosperity, according to a consensus of economic development leaders in the state.
Mike Finney, president and CEO of the Michigan Economic Development Corporation, said his organization is working on multiple fronts to transform Michigan’s economy. “We’re lowering our business taxes and removing barriers to growth to fuel creativity, innovation and business expansions,” Finney said.
The state is beginning to move in the right direction, according to Paul Krutko, president and CEO of business accelerator Ann Arbor SPARK. “Changes in the corporate tax structure are a powerful driver to attract and retain business,” he said. “What’s more important is consistency in the state’s taxes and policies. Businesses need to be able to plan for the future.”
Ken Rogers, executive director of technology business association Automation Alley in Oakland County, has an optimistic outlook on the direction the state is headed: “Recovery is already under way,” he said. “Unemployment is down; people’s attitudes are up; the buzz is that things are improving and Michigan is getting its act together.”
Still, prosperity won’t return to the state overnight, according to Doug Rothwell, president and CEO of Business Leaders for Michigan. “It will take a good five years for Michigan to truly be back in the game,” according to Rothwell.
MICHIGAN TO ADD 60,000 JOBS ANNUALLY THROUGH 2013
Michigan can look forward to adding 60,000 jobs annually for the next three years, according to University of Michigan economist George Fulton, saying that job growth will be “steady but not spectacular.”
Fulton spoke at the semi-annual revenue estimating conference in Lansing, where state officials learned that revenue is up by nearly $429 million from January estimates.
Fulton said the state can thank a resurgent auto industry for the boost in tax revenues, adding that General Motors, Ford and Chrysler are making more profit today even though they are selling fewer vehicles than they did during the 1990s.
“Our view is that the Michigan economy is in the early stages of a sustained recovery,” Fulton said. He forecast that Michigan would add 68,200 new jobs this year, 53,000 next year and 61,400 in 2013.
TOURISM INCREASED IN 2010
Michigan’s tourism industry saw dramatic gains in 2010, generating an estimated 10,000 new jobs as out-of-state visitor spending increased 21 percent. For the first time, nonresident visitors outspent in-state travelers.
According to a national survey of U.S. travel volumes and spending, visitor spending in Michigan jumped from $15.1 billion in 2009 to $17.2 billion in 2010 — the biggest one-year increase in Michigan history.
The growth in visitor spending generated an estimated 13.4 percent increase in state tax revenue — $964 million in 2010, up from $849 million in 2009.
According to George Zimmerman, vice president for Travel Michigan, part of the Michigan Economic Development Corporation, the majority of Pure Michigan advertising is targeted to other states, such as Illinois, Indiana, Ohio and Wisconsin.
EMPLOYERS CAN’T FILL JOBS DESPITE HIGH UNEMPLOYMENT
According to the latest Talent Shortage Survey by recruitment agency Manpower Group, 52 percent of U.S. employers are experiencing difficulty filling mission-critical positions within their organizations, up from 14 percent in 2010 — an all-time high.
The three most common reasons employers say they are having trouble filling jobs are candidates looking for more pay than is offered, lack of technical skills and lack of experience. According to Jonas Prising, Manpower Group president of the Americas, there is an increasing imbalance between employers’ willingness to pay higher salaries and salary expectations of prospective employees.
In the U.S., the most difficult jobs to fill include: skilled trades, sales reps, engineers, drivers, accounting and IT staff.
STATE DEMS INTRODUCE BILL TO RESTORE 26 WEEKS OF UNEMPLOYMENT BENEFITS
House Democrats in Lansing introduced legislation to restore the six weeks of unemployment insurance cut recently by the Republican-controlled Legislature.
The cut in benefits is scheduled to begin next year. It came in tandem with a technical fix needed to ensure long-term unemployed people in the state could continue to receive extended federal jobless benefits.
The reduction in benefits was lauded by many in the business community who say it was a necessary change since Michigan owes the federal government $4 billion it borrowed to pay jobless benefits. The state must begin paying interest on that debt this year and businesses face rising unemployment taxes because of it.
Democrats argue that now is not the time to reduce benefits in the state, which was one of the hardest hit in the recession. Michigan’s unemployment rate continues to hover around 10 percent.