charles l. ballard department of economics michigan state university east lansing, mi
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Michigan’s Economy: Past, Present, and Future Presented to Michigan Community College Association July 25, 2014. Charles L. Ballard Department of Economics Michigan State University East Lansing, MI [email protected]. - PowerPoint PPT PresentationTRANSCRIPT
Michigan’s Economy: Past, Present, and Future
Presented toMichigan Community College Association
July 25, 2014
Charles L. BallardDepartment of EconomicsMichigan State University
East Lansing, [email protected]
Education makes a huge difference to labor-market outcomes.
(And those differences have increased in recent decades.)
Unemployment Rates in the United States by Educational
Attainment, For Workers Aged 25 and Over, June 2014
Bachelor’s Degree or Higher 3.3%
Some College, or Associate Degree 5.0%
High-School Graduate, No College 5.8%
Less Than High School 9.1%
Source: U.S. Bureau of Labor Statistics
Average Earnings in 2012, for Those Aged
45-54 Who Worked Full-Time Year-Round
(For the Entire U.S.) Men Women
Professional Degree $179,967 $119,231
Master’s Degree $115,702 $ 81,156
Bachelor’s Degree $ 96,591 $ 62,222
Associate’s Degree $ 64,159 $ 44,899
High-School Graduate $ 50,178 $ 35,926
Some H.S. (No Diploma) $ 37,547 $ 23,648
Less Than 9th Grade $ 29,367 $ 21,532
Source: U.S. Census
Michigan does have poor people. But overall, Michigan is not a poor place.
19291933
19371941
19451949
19531957
19611965
19691973
19771981
19851989
19931997
20012005
20090
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Inflation-Adjusted Per-Capita Personal Income, In Michigan and the United States, 1929-2012
Michigan
United States
Year
Per-
Capi
ta P
erso
nal I
ncom
e, in
201
2 D
olla
rs
However, although Michigan is not a poor place, our economy has not grown as fast as the national average.
19501954
19581962
19661970
19741978
19821986
19901994
19982002
20062010
85
90
95
100
105
110
115
120
125
130
Per-Capita Personal Income: Michigan as a Percent of the U.S. Average, 1950-2012
Year
Perc
ent
The states that have achieved the biggest income gains in the last generation are the states with the most highly educated work forces.
How are we in Michigan doing, in terms of educational attainment and achievement?
The brightest spot of recent years is the expansion of access to early-childhood education in Michigan.
Early-childhood education is the most productive investment a society can make.
Michigan ranks 20th in the country for the percentage of the adult population who have a high-school diploma or equivalent.
Percentage of Population Aged 25 and Over Who Are High-School Completers, 2008-2010, Selected States
Rank State Percent RankState Percent
1. Wyoming 92.2 25. Ohio 87.7
2. Montana 91.7 30. Indiana 86.6
3. Alaska 91.5 31. Illinois 86.5
4. Minnesota 91.4 United States 85.3
5. New Hampshire 91.3 36. New York 84.5
6. Vermont 91.1 38. N. Carolina 84.1
14. Wisconsin 89.9 43. New Mexico 83.1
18. Massachusetts 89.0 49. California 80.7
20. Michigan 88.6 50. Mississippi 80.7
23. Pennsylvania 88.0 51. Texas80.3
In terms of comparisons among the states on the NAEP, Michigan doesn’t do so well. Our rankings among the states in 2013:
4th grade reading: 38th
4th grade math: 42nd
8th grade reading: 32nd
8th grade math: 37th
Michigan lags behind the national average in college attainment.
19401950
19601970
19801990
20002010
0
5
10
15
20
25
30
35
40
45
Percent of the Population Aged 25 and Older With A Bachelor's Degree or Higher, 1940-2010
United StatesMassachusettsMichiganArkansas
Year
Perc
ent
The challenges we face
1. I don’t need an education; I’m going to get one of those high-paying factory jobs.
Manufacturing’s Share of the Economy Has Shrunk Dramatically
0
5
10
15
20
25
30
35
40
45
50
Manufacturing as a Percent of Gross Domestic Product, In Michigan and the United States, 1963-2012
Michigan
United States
Year
Perc
ent
The challenges we face
2. “What about all those children who can’t learn algebra?”
The Detroit metropolitan area is more racially segregated than any other major area in the United States.
Many of the problems of the city and the metropolitan area stem from the lack of a regional focus.
The challenges we face
3. If we just cut taxes far enough– if we just lay off enough teachers– if we just let our roads crumble– then businesses will flood into Michigan!!!!!!!!
Tax Effort Has Reduced Substantially
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
7
9
11
13
15
17
19
State and Local Taxes as Percent of Personal Income, 1972-2011
New York
Michigan
United States
Texas
Year
Per
cen
t
I have emphasized formal education, but that is not the only game in town.
Career and technical education has an extremely important role to play for many of our young people.
To attract and retain talented young people for Michigan, we need more than jobs and educated workers. We need quality of life.
The MIplace Partnership Initiative
(Miplace.org) :
• Housing choices • Historic preservation• Mixed-use development • Public transportation• Pedestrian orientation • Entertainment and
recreation• Quality public
infrastructure
Charley’s Wish List:
• Continue to expand early-childhood educ.• Extend the K-12 school year.
• Support higher education, including community colleges and
universities.• Extend the sales tax to services.
• Establish a graduated income tax, or raise the flat rate. • Use an independent, non-partisan
commission to draw legislative
district boundaries.
Michigan, My Michigan
A song to thee, fair State of mine,Michigan, my Michigan.
But greater song than this is thine,Michigan, my Michigan.
The whisper of the forest tree,The thunder of the inland sea,Unite in one grand symphony
Of Michigan, my Michigan.