Detroit and all of Michigan have been learning some tough lessons about how inadequate our state economic offerings remain, despite the big revival of the auto industry over the past decade.
Our blotches are showing to everyone in the corporate world, even as Michigan’s rise out of the depths of the Great Recession and the “Lost Decade” is routinely celebrated by in-state boosters.
But the state’s top CEOs are taking notice and calling for big changes in Michigan’s economic landscape.
The alarm was first sounded when the Motor City’s civic leaders made an extravagant sales pitch last year to land Amazon’s planned second campus, a sprawling $5 billion facility that will create 50,000 good-paying jobs. But Detroit failed to crack the list of 20 finalists.
The next big catch currently dangled by the corporate world is Apple’s upcoming fourth campus, part of the tech giant’s plan to hire 20,000 people and invest $350 billion across the U.S. over the next five years.
On Wednesday, an analysis by the Bloomberg News agency found that Motown’s chances for that project are probably no better than the city’s previous, unrealistic hopes for the Amazon HQ bonanza.
In fact, research by the New York Times last fall showed that Grand Rapids probably had a slightly better chance than Detroit of landing what’s known as Amazon HQ2. Bloomberg found the same with Apple Campus 4 as their analysis shows that, from the standpoint of the computer/smartphone giant, the Motor City essentially has nothing going for it while Grand Rapids at least ranks high among U.S. cities in the category of pro-business environment.
If Amazon and Apple represent the gold standard of a flourishing 21st Century tech economy, a “Rustbelt” state like Michigan is not on their radar. The state does not have an Apple corporate office, major Apple parts suppliers or data centers. It has no cities that rank among the U.S. Top 15 in an educated workforce or in quality public transportation.
Taking a step back, Detroit as the next Silicon Valley, a popular storyline in the media of late, may be mere fantasy. Michigan as the center of the burgeoning autonomous vehicle industry is much more likely, but the state’s lagging tech workforce still stands as a potential barrier.
This morning, the group known as Business Leaders for Michigan (BLM) issued a warning that Michigan’s economic renaissance has come far, but it’s still in the hole in terms of taking the next step forward. The Great Lakes State comes up short in many metrics in its goal to become a Top Ten state for jobs and wages.
The BLM, comprised of numerous CEOs across the state, said that an aggressive action plan is needed to invest billions of dollars in K-12 education, job training, college affordability and infrastructure improvements, while also maintaining budget stability at the state and local level.
John Gallagher, the top-notch business reporter for the Detroit Free Press, noted earlier this week that Michigan’s rate of growth in per-capita personal income ranked 10th among the 50 states for 2015-16. But even that recent turnaround only brought up the state to 31st place.
If Michigan could perform at a Top 10 level, the BLM found, the state would see another 34,000 employed and per-capita income would rise $9,500 higher, meaning a difference of nearly $40,000 a year for a family of four.
That is staggering.
Gallagher points out that many of the proposals are expensive, or controversial, or both – especially when facing approval from the Republican-led Legislature.
For example, the BLM report calls for:
- Shifting state money from road repairs to higher ed, and then replacing the road bucks with more increases in user fees, such as higher vehicle registration costs and toll roads, which presents a number of logistical problems.
- Reforming immigration policies by boosting the number of H-1B visas available to white-collar foreign workers coming to places like Michigan, and pressure Congress to allow foreign-born workers with advanced technical degrees from U.S. universities to qualify immediately for a green card to work in the United States.
- Shore up local governments’ long-term budget stability through a two-tier system by ending traditional defined-benefit pension plans and retiree health care coverage for new hires.
- Allow metro regions such as southeast Michigan to increase local taxes to pay for enhanced mass transit without a required pre-approval from the Legislature.
- Increase K-12 per-pupil funding and provide matching funds that would enable universities to more aggressively attract federal research dollars.
- Reform Michigan’s no-fault auto insurance law so that rates are lowered in urban areas, which would end a disincentive for workers who want to live in Detroit.
- Make Michigan a more welcoming state by adding LGBT rights to the list of discrimination prohibitions in the workplace.
Photo: Designboom.com/Apple Campus 2 construction nearly complete in Cupertino, Calif.