Street Talk: Reading the economic tea leaves
Consumer confidence in Michigan is approaching record levels, begging the question: Has the state’s economy recovered?
Yes — and no, said Charles Ballard, Michigan State University professor of economics and director of MSU’s quarterly State of the State Survey.
In the spring survey, released last week, 60 percent of residents rated their financial situations as good or excellent, marking the best response since 2002, when the highest-ever mark of 66 percent was recorded. Further, 69 percent believe they’ll be better off a year from now — just off the high of 72 percent in 1999.
Those numbers jibe with a robust employment picture. Some 450,000 jobs have been added since Michigan’s economy bottomed out in early 2010, and the state’s unemployment rate finally drew even with the national rate this spring.
But Michigan is still 400,000 jobs below its peak level reached in 2000, Ballard said, and the distribution of income is much more unequal than a few decades ago.
“Is Michigan’s economy back? This is a classic case of a glass that is half full and half empty,” Ballard said. “Although the state’s economy has made big strides in the past six years, the losses of the first decade of this century were huge and continue to resonate.”
So is the glass half full or half empty? There are clues.
Instead of riding the economic wave, Gov. Rick Snyder’s approval ratings dropped in the spring. Just 36 percent rated Snyder’s performance as “excellent” or “good,” down slightly from 38 percent from the last survey in fall 2014.
Ballard offered three theories on the guv’s sliding approval ratings.
“The first is a permanent effect: Snyder is a self-described nerd. He’s not a media rock star, nor does he try to be. His technocratic approach has much to recommend it, but it does not generate a lot of excitement. Thus, his favorable ratings have never been extraordinarily high.”
It’s all about the timing, too.
“The second has to do with the timing of this particular survey. It was taken at a time of the debacle associated with the failure of the road-funding ballot initiative. The third is that the economic growth has been unbalanced, with much bigger gains at the top of the income scale than at the bottom. So it’s not necessarily surprising that his favorable ratings are only 22 percent among those with household incomes below $20,000, and only 31 percent among those with household incomes between $20,000 and $50,000.”
Ballard said that information is in direct contrast to President Barack Obama’s popularity. Obama’s approval ratings in Michigan improved to 40 percent from 35 percent in the last survey.
Many believe Obama is having a good year; his ratings have risen in several national polls after slumping in 2014.
“In addition,” Ballard said, “I think one reason why he gets more ‘excellent’ ratings than Snyder is that he is more telegenic. I think Obama excites people’s emotions more than Snyder does. But emotions can be excited in a negative way as well as a positive way.”
It’s also difficult to avoid the conclusion that race plays a factor, Ballard said. For the state as a whole, Obama received a “poor” rating from 33 percent. However, 38 percent of whites gave the president a poor rating, while only 7 percent of blacks did.
The telephone survey of 966 Michigan adults was conducted between March 26 and June 22. The margin of error is 3.15 percent.
The State of the State Survey is designed to systematically monitor the public mood on important issues statewide. The survey has been conducted since 1994 by the Institute for Public Policy and Social Research. IPPSR is a unit of MSU’s College of Social Science.
A taxing effort
A Grand Rapids businessman was in Washington, D.C., last week to testify before the Senate Committee on Small Business and Entrepreneurship, and he gave lawmakers an earful on what life is like running a small business.
As principal and co-founder of Mathison|Mathison Architects in Grand Rapids, Tom Mathison described the arduous process he endures on a weekly basis just to be compliant with the U.S. tax code.
“Unlike larger corporations which have in-house accountants, benefits coordinators, attorneys, personnel administrators, etc., at their disposal, small businesses often are at a loss to keep up with, implement, afford, or even understand the overwhelming regulatory and paperwork demands of the federal government and tax code,” Mathison said during his testimony.
He pointed to near-term fixes that could greatly ease tax compliance, such as Committee Chairman David Vitter’s recently introduced legislation, the Small Business Tax Compliance Relief Act. He applauded the Louisiana Republican’s bill and welcomed some of the key changes it would make: allowing the self-employed to fully deduct the cost of their health insurance; increasing cash accounting thresholds; and requiring IRS to establish small-business review panels.
Mathison went on to quantify what a serious problem tax complexity has become, citing a National Small Business Association taxation survey that shows one-third of small-business owners spend more than 80 hours per year dealing with federal taxes — two full work weeks.
“More than half of NSBA members have fewer than five employees, forcing most of us to hire outside help. At Mathison | Mathison Architects, that amounts to thousands of dollars each year, not to mention the significant time I personally spend each week on federal tax compliance — time and money that would be better spent growing my firm and hiring new employees,” he said.
A West Michigan designer has his work on display at the Smithsonian’s National Museum of American History as part of the new American Enterprise exhibition.
An original design from Jonathan Barrera Mikulich, co-founder and director of brand strategies at Vias Latino Market Consultants, is part of the major installation that chronicles the history of events and individuals that have shaped business in the United States. The exhibition opened to the public July 1 in Washington, D.C., and will be on display for the next 20 years.
“It is truly an honor,” said Mikulich. “Being selected for participation in the Smithsonian is quite a thrill I never would have imagined.”
Originally developed for his online blog and consultancy Latino Branding Power, the design, “¡Lotería, Lotería!: Latinos are Winning in Social Media,” is an infographic that references facts and figures about how the national Latino population has embraced mobile technology and social media.
“While the data emphasizes Latino use of social media, the design of the infographic is inspired by the game Loteria, a popular pastime from Mexico,” said Mikulich. “It is similar to Bingo and uses images of characters and objects instead of letters and numbers. Many images have become iconic and are often parodied and referenced in contemporary Mexican art and culture.”
The infographic is part of the advertising business display regarding Latino marketing. The display features examples of how targeted marketing and technology changed the way advertisers connected with new demographics during the latter part of the 20th century and into the 21st century.
“To be considered among some of the iconic marketing campaigns of our time is a significant recognition,” he said. “I hope the exhibition will shine a light on the contributions of individuals within our communities as they relate to their contributions overall to American culture, society and economy.”