Michigan out 28,000 jobs
Aug. 7.4% jobless rate is 14-year high; auto, construction work shrinks
Louis Aguilar / The Detroit News
Michigan's unemployment rate in August hit a level not seen in nearly 14 years, as the stagnating job market spurred tens of thousands of working-age men and women to quit the state.
Massive auto buyouts and a sharp decline in residential construction were cited as factors for the state's jobless rate reaching 7.4 percent last month. That's the highest unemployment rate since September 1993, according to data released Wednesday by the Michigan Department of Labor & Economic Growth.
Last month, 28,000 jobs were lost in Michigan, bringing the total number of livelihoods lost since this time last year to 96,000. Since August 2006, employment in Michigan has dropped by 2 percent, even while the national rate of employment increased by 0.8 percent.
Economists say the increasing number of lost jobs and vanished residents is just the latest indication that the state of Michigan has come to a troubled crossroads.
Detroit automakers have cut tens of thousands of jobs in the past two years. Now, national contract talks between the United Auto Workers and General Motors Corp. have stretched into their sixth day of overtime. The two sides are grappling over how to relieve the automaker of $50 billion in retiree health care costs while balancing the union's concerns to save U.S. manufacturing jobs.
The state Legislature still has not found a way to craft a budget that deals with a $1.75 billion deficit, while declining property values, increasing foreclosures and a mounting list of unsold homes keep the regional housing market in a nosedive.
"We are at the bottom right now and people need to understand for the rest of America, it's not that way," said Gary Wolfram, an economist at Hillsdale College.
"The unemployment rate, the tax rate, the state of the auto industry -- these are big signs that we need to ask ourselves some very fundamental questions of how we are going to compete, and it's still not clear if we will make the necessary corrections."
The state jobless data show that people are dealing with these troubles by leaving the state. Michigan's pool of workers -- adults both employed and unemployed -- dropped by 16,000 in August and by 81,000 (1.6 percent), since a year ago, according to the state labor department.
"Michigan's labor force in 2007 has declined in six out of eight months," said Rick Waclawek, director of the department's bureau of labor market information and strategic initiatives.
GM, Ford Motor Co. and the now-independent Chrysler LLC have cut tens of thousands of jobs in recent years through buyouts and plant closings in a bid to better compete with foreign carmakers. Those cuts -- plus thousands more by auto parts maker Delphi Corp. -- continue to roil Michigan's economy, which depends far more on the manufacturing sector than other states.
Typical of the Michigan labor market this year, most job sectors saw little to no gains in August and a few losses, especially in the key auto manufacturing sector, which dropped 1,000 jobs last month and 20,000 in the past 12 months, according to the department.
Detroiter DeAnisha Beigh, 27, lost her job last year as a Detroit Public School cafeteria worker and hasn't found one since. This fall, she enrolled at Wayne County Community College.
"It's about as worse I've ever seen," Beigh said. "A lot of people are losing their homes and all kinds of people are talking about going back to family down south."
Like many in the region, Beigh's family first came to Detroit decades ago to seek manufacturing work. And now, like many, they've found those opportunities gone.
"Once my uncle retires from Ford, we don't have anyone in the plants anymore," Beigh said.
Caught in the carmakers' troubles has been the state's housing industry, which has lost 18,000 jobs in the past year. It's easy to see why. Permits for new housing construction in Metro Detroit are down more than 50 percent from a year ago, according to data released Wednesday by Housing Consultants Inc.
That's been the trend since January, reflecting the housing slowdown that started in 2005.
Metro area permits were down 53.8 percent from January through August, compared with the same period in 2006. Total permits declined from 5,526 for houses and condos to 2,551. Specifically:
Wayne County: 679 permits January through August, vs. 1,694 during that period last year; down 59.9 percent
Oakland County: 716 permits vs. 1,548; down 53.7 percent
Macomb County: 906 permits vs. 1,785; down 49.2 percent
Livingston County: 250 permits vs. 499; down 49.9 percent
Aug. 7.4% jobless rate is 14-year high; auto, construction work shrinks
Louis Aguilar / The Detroit News
Michigan's unemployment rate in August hit a level not seen in nearly 14 years, as the stagnating job market spurred tens of thousands of working-age men and women to quit the state.
Massive auto buyouts and a sharp decline in residential construction were cited as factors for the state's jobless rate reaching 7.4 percent last month. That's the highest unemployment rate since September 1993, according to data released Wednesday by the Michigan Department of Labor & Economic Growth.
Last month, 28,000 jobs were lost in Michigan, bringing the total number of livelihoods lost since this time last year to 96,000. Since August 2006, employment in Michigan has dropped by 2 percent, even while the national rate of employment increased by 0.8 percent.
Economists say the increasing number of lost jobs and vanished residents is just the latest indication that the state of Michigan has come to a troubled crossroads.
Detroit automakers have cut tens of thousands of jobs in the past two years. Now, national contract talks between the United Auto Workers and General Motors Corp. have stretched into their sixth day of overtime. The two sides are grappling over how to relieve the automaker of $50 billion in retiree health care costs while balancing the union's concerns to save U.S. manufacturing jobs.
The state Legislature still has not found a way to craft a budget that deals with a $1.75 billion deficit, while declining property values, increasing foreclosures and a mounting list of unsold homes keep the regional housing market in a nosedive.
"We are at the bottom right now and people need to understand for the rest of America, it's not that way," said Gary Wolfram, an economist at Hillsdale College.
"The unemployment rate, the tax rate, the state of the auto industry -- these are big signs that we need to ask ourselves some very fundamental questions of how we are going to compete, and it's still not clear if we will make the necessary corrections."
The state jobless data show that people are dealing with these troubles by leaving the state. Michigan's pool of workers -- adults both employed and unemployed -- dropped by 16,000 in August and by 81,000 (1.6 percent), since a year ago, according to the state labor department.
"Michigan's labor force in 2007 has declined in six out of eight months," said Rick Waclawek, director of the department's bureau of labor market information and strategic initiatives.
GM, Ford Motor Co. and the now-independent Chrysler LLC have cut tens of thousands of jobs in recent years through buyouts and plant closings in a bid to better compete with foreign carmakers. Those cuts -- plus thousands more by auto parts maker Delphi Corp. -- continue to roil Michigan's economy, which depends far more on the manufacturing sector than other states.
Typical of the Michigan labor market this year, most job sectors saw little to no gains in August and a few losses, especially in the key auto manufacturing sector, which dropped 1,000 jobs last month and 20,000 in the past 12 months, according to the department.
Detroiter DeAnisha Beigh, 27, lost her job last year as a Detroit Public School cafeteria worker and hasn't found one since. This fall, she enrolled at Wayne County Community College.
"It's about as worse I've ever seen," Beigh said. "A lot of people are losing their homes and all kinds of people are talking about going back to family down south."
Like many in the region, Beigh's family first came to Detroit decades ago to seek manufacturing work. And now, like many, they've found those opportunities gone.
"Once my uncle retires from Ford, we don't have anyone in the plants anymore," Beigh said.
Caught in the carmakers' troubles has been the state's housing industry, which has lost 18,000 jobs in the past year. It's easy to see why. Permits for new housing construction in Metro Detroit are down more than 50 percent from a year ago, according to data released Wednesday by Housing Consultants Inc.
That's been the trend since January, reflecting the housing slowdown that started in 2005.
Metro area permits were down 53.8 percent from January through August, compared with the same period in 2006. Total permits declined from 5,526 for houses and condos to 2,551. Specifically:
Wayne County: 679 permits January through August, vs. 1,694 during that period last year; down 59.9 percent
Oakland County: 716 permits vs. 1,548; down 53.7 percent
Macomb County: 906 permits vs. 1,785; down 49.2 percent
Livingston County: 250 permits vs. 499; down 49.9 percent
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