The Michigan Association of United Ways reports that in 2017 43 percent of Michigan households were unable to pay for necessities. Up six percent from 2010 when the Michigan economy was just starting to grow after the Great Recession.

How can that be? In an economy that President Trump calls the best American economy ever (it isn’t, but it is a strong economy) more Michigan households can’t afford to pay for housing, child care, food, transportation, health care, a cell phone and taxes.

The simple answer is too many of us work in low-paying jobs with little or no benefits. As the report notes: “Low-wage jobs dominate the employment landscape, with 61 percent of all jobs in Michigan paying less than $20 per hour.” More exact for lower-paid workers wages and benefits are growing slower than the cost of paying for basic necessities.

To be an ALICE (Asset Limited, Income Constrained, Employed) household in Michigan income needs to be below $61,272 for a family of four (two adults with one infant and one preschooler) and $21,036 for a single adult. The ALICE calculations are cost of living adjusted and based on household size.

In 2017 1,664,606 Michigan households were ALICE households compared to 1,569,992 in 2010. ALICE is an all Michigan problem. There are no counties in the state with less than 30 percent ALICE households. The range is from a low of 30 percent in Eaton County to 61 percent in Lake County. Not only is ALICE geographically diverse she also is prevalent by age, race and ethnicity.

What the ALICE data make clear is that this is a structural problem and an all Michigan problem. We are not going to grow our way out of far too many Michigan household unable to pay for the basics. And a low unemployment rate will not drive wages, benefits and hours worked up enough to substantially dent the proportion of ALICE households.

To substantially reduce the ALICE rate we need a new economic strategy in Michigan. One that starts with making raising household income for all the state’s economic mission. Income––not employment or growth––needs to become the focus of economic policy making.

Increasing education attainment is the best way to increase wages and benefits. With every step up the education attainment ladder people work more and earn more. With a four-year degree being the most reliable path to the middle class. Michigan Future lays out it’s education agenda in our Improving student outcomes from education, birth to college  report.

The reality is that even with higher education attainment there still will be lots of low-pay, low- benefit jobs in Michigan. That is a structural reality of today’s economy. So you also need a shared prosperity agenda. We lay out our policy recommendations in our Sharing prosperity with those not participating in the high-wage knowledge-based economy report.

That report identifies three basic challenges that Michigan must address to increase income of those not participating in the high wage economy:

• Help people get back to work through a case management system that provides income supports and services designed to remove whatever barriers are keeping people from working
• Raise employment earnings for those in lower-paid work by some combination of employer mandates and/or an expanded safety net
• Criminal justice reform. Fewer sent to prison, those who are for less time, and removing barriers to work once they get out.

The first step though is to end the self congratulations among far too many of Michigan’s political and business elites who think just because the unemployment rate is low and they and corporate Michigan are doing well that the Michigan economy is a roaring success. It isn’t. The ALICE data should lead to our elites hearing alarm bells. Until they do––or we insist that they do––it is almost certain that a way too high proportion of Michigan households will continue to be unable to pay for necessities.

The post More Michigan households unable to pay for necessities appeared first on Michigan Future Inc..

Then-New York City Mayor Michael Bloomberg got it right when he wrote in a Financial Times column: “The most creative individuals want to live in places that protect personal freedoms, prize diversity and offer an abundance of cultural opportunities.”

Our research on the changing American economy has led us to conclude that the regions with the highest concentration of those with a four-year degree or more are going to be the places where high-wage, high-growth enterprises concentrate. Not low-tax, small government, so-called business-friendly regions.

When it comes to economic development strategy, Harvard economist Edward Glaeser, in Triumph of the City, concludes: “The bottom up nature of urban innovation suggests that the best economic development policy may be to attract smart people and get out of the way.” So the foundation of economic development should be creating regions, anchored by vibrant central cities, where smart people want to live and work.

Since the publication of our report, “A Path to Good-paying Careers for all Michiganders,” two high-profile corporate location decisions have made even clearer the importance of quality of place to future economic well-being. First, Amazon decided that neither metro Detroit or metro Grand Rapids had the talent or the transit to make the list of the 20 finalists for their 50,000 high-paid jobs HQ2. Michigan’s two big metros weren’t not worthy of consideration because neither Detroit or Grand Rapids has the talent concentrations needed by knowledge-based service companies.

On the positive side, Ford decided to center their transition to mobility in downtown Detroit. Ford has learned the lesson that far too many Michigan business leaders and policymakers have not: that creating places where young talent wants to live and work is essential to economic success. They have learned that what matters most to their economic survival is talent, and that their biggest competitive threats are located where young professionals are concentrating.

This also is a prime lesson to be learned from our recently published metro Minneapolis case study “Regional Collaboration Matters.” Metro Minneapolis is doing a far better job than metro Detroit and metro Grand Rapids in retaining and attracting young professionals. They have, for decades, made creating a place where people want to live and work an economic development priority, and placed an emphasis on the cities of Minneapolis and St. Paul. The payoff is that on every measure of economic well-being––including the proportion of adults who work and household income––they are a national leader, while metro Detroit––even being the North American home of one of the world’s great industries––is now a national laggard as is metro Grand Rapids.

And largely because of the success of metro Minneapolis, Minnesota is the Great Lakes region’s best performer, by far, on every measure of individual and household economic well-being.

One might ask, “But what does quality of place have to do with good-paying careers for all?” The answer is that talent is mobile, and increasingly, where they go, high-wage knowledge-based enterprises follow. Where you have concentrations of high-wage workers you get increased demand for local services. Their spending power ripples through the region’s economy via increased demand for retail, hospitality, construction and other locally provided goods and services. In the past, that regional demand in Michigan was driven by high-wage manufacturing workers; today, it’s driven by high-wage professionals and managers.

Michigan lags the nation in having communities that are powerful talent attractors. We are in desperate need of a placemaking vision that allows all of its regions to develop and implement their own strategies to be places where people want to live, work and play. And it needs to make sure that metro Detroit and metro Grand Rapids are able to compete with talent magnets like Chicago and Minneapolis.

In our new report, “A path to good-paying careers for all Michiganders: Creating places across Michigan where people want to live and work,” available now, we spell out why placemaking is so critical, and what we believe are the most impactful state policies to improve the attractiveness of communities across the state.

When The New York Times wrote about Ford’s purchase of the long-abandoned Detroit train station, the article’s subtitle jumped out at us: “By renovating a symbol of the city’s decline, the company hopes to create a magnet for the talent needed to prevail in the next automotive era.” Ford gets that talented people are concentrating in vibrant, dense communities. We need to foster those communities to succeed in the global era. It’s time the rest of Michigan’s business, community, and political leaders start acting on that same lesson.

Photo credit: Susan Montgomery/Shutterstock.com.

The post Why placemaking is critical for Michigan’s prosperity appeared first on Michigan Future Inc..

The first from Carole Valade, editor of the Grand Rapids Business Journal, entitled Michigan: a state of impoverishment. Citing data from (1) the Gallup-Healthways’ latest State of American Well-Being report that ranks Michigan in the bottom 10, (2) the Michigan Department of Technology, Management & Budget’s Winter 2015 Michigan Economic and Workforce Indicators and Insights data on Michigan continued loss of residents ages 22 to 34 with a bachelor’s degree or higher and (3) the 2015 Kids Count in Michigan data book which showed a 35 percent increase in child poverty over the last six years, Valade concludes:

No matter how many positive proclamations Snyder makes, the state will remain in the bottom 10 without an orchestrated effort to affect education; it is the most effective method to declare war on poverty.

The second editorial comes from the Grand Rapids Press entitled Here’s how we can fight child poverty in West Michigan. Citing the Kids Count data, they write:

We must have a constructive dialogue within our community about how to address the issue of poverty. Far too often, words like “entitlement” and “hand-out” are used to make political arguments, but they fail to grasp the crippling burden of abject poverty. West Michigan’s elected officials in Lansing, most of whom are part of the Republican majority, must continue to find ways to fund programs that benefit and help the poor in our region and state. This includes bolstering the Supplemental Nutrition Assistance Program (SNAP); more money for early childhood education; increasing access to healthcare; allocating more funds for job training; and streamlining human services programs aimed at helping low-income residents.

Exactly! Michigan policy makers need to understand that Michigan––no matter the welcome decline in the unemployment rate––is still a state with huge economic challenges. That we are closer to the bottom than the top on almost all measures of economic well being. And that to reverse that we need more  public investments in education, the safety net and making our communities places where people want to work and live.

The post Michigan impoverished appeared first on Michigan Future Inc..