Editorial

Regard employment rates with caution

August 28, 2015
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Month-end employment rates are likely to give politicians an excuse to imagine there is some credit due them rather than the Michigan employers creating jobs.

Despite the number assigned to the “rate,” the Business Journal finds less to cheer and more reason for concern. Two growing issues are likely to silence any cheer for the employment rates, and both are unsettling in regard to economic growth and continued philanthropic beneficence.

First, the unemployment rate does not count “discouraged workers” (also referred to as “missing workers”), estimated by the Economic Policy Institute think tank on Aug. 7 to be 3.4 million nationally — and generally thought to be a higher percentage among workers in Michigan.

Almost half of these workers with weak job opportunities are 55-64 years old, and the nearly same-size, second-largest group is 45- to 54-year-olds. The Heritage Foundation studies found the drop in state unemployment rates across the nation is the same percentage as the number of now discouraged workers, no longer counted in the unemployment rate formula.

Second, employers are coming up short on applicants for a growing number of jobs.

Workforce solutions agency West Michigan Works! announced its assistance with the third round of annual funding to employers from the Michigan Strategic Fund, providing $20 million in Skilled Trades Training Fund grant money for training programs at community colleges for new or existing employees.

The grant funding is a short-term solution for what may become a long-term trend but assists employers with immediate needs. Continued business prosperity, however, predicts a continued issue that stymies long-term growth. The West Michigan region has long held a reputation for its skilled labor force, an attribute economic development groups have long touted. That, too, is threatened.

The Business Journal notes another direct correlation: Workers age 45-64 are the foundation of philanthropic contributions supporting every agency or cultural group from United Way to Opera Grand Rapids. West Michigan’s legacy of giving is as gravely threatened as the ability of businesses to continue growth. Further, as the Heritage Foundation notes, it is worrisome that many of those discouraged workers are increasingly turning to early retirement and the available Social Security benefits and social safety nets.

The large number of “discouraged” workers is an unused asset that must be tapped to create a high-performing regional economy and lifestyle.

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