Job creation cuts unemployment rate
LANSING — The unemployment rate in Michigan had a significant drop of 1.6 percent from September 2014 to September 2015, according to the Bureau of Labor Statistics.
The creation of additional jobs cut Michigan’s unemployment rate to 5 percent. That is less than the national average and 9.9 points below the state’s unemployment peak during the Great Recession.
One of the sectors leading the charge in job creation is manufacturing.
Manufacturing took a hard hit during the recession, but it now has its highest number of jobs since 2009, said Michelle Wein, a labor analyst for West Michigan at the Bureau of Labor Market Information and Strategic Initiatives in the Department of Technology, Management and Budget.
“It’s been nice to see the renewed growth in manufacturing because it’s such a big factor in the Michigan economy,” Wein said. “I think we’ve seen a resurgence in the western region in terms of firms that are locating there or opening up. There’s a lot of expansion of firms that were already there because the economy as a whole is doing better.”
Bruce Adair, chief operating officer at Lakeshore Advantage, an economic development group for West Michigan operating out of Zeeland, said almost every manufacturing company in the area is expanding and creating jobs.
Lakeshore Advantage uses a research instrument to survey 125 to 150 West Michigan companies. Adair said the preliminary numbers for 2015 report 79 percent of area employers are having difficulty recruiting skilled trades and engineering workers.
“We also ask companies how total company sales are going,” Adair said. “Eighty-four percent of the companies that are involved in the survey have increasing sales. The economy over here is running very hot.”
Additionally, 79 percent are planning to expand in the next three years. Adair said that could include real estate or technology expansions.
Andrew Such, the director of environmental and regulatory policy at the Michigan Manufacturers Association, said the state’s manufacturing sector is strong, first by reputation and second by the skilled workforce that reputation created.
“In the last couple of years we’ve added over 80,000 manufacturing jobs every year, and we don’t see any reason why that would slow down,” Such said.
The drop in joblessness is promising, but Paul Sicilian, an economics professor at Grand Valley State University, said people must understand all facets of the unemployment rate.
“Unemployment rates can be misleading,” Sicilian said. “They are driven by people getting jobs, but they also can be driven by people leaving the labor market altogether.
“Labor force participation and unemployment in Michigan has fallen a lot and hasn’t rebounded to where it was before the recession,” he said.
Sicilian said the labor force participation drop, alongside the drop in unemployment, shows that more people aren’t necessarily gaining jobs but may be less interested in filling openings. That creates the illusion that more people are being employed.
Companies that are leaving Michigan or downsizing also contribute to the unemployment rate, he said, as their employees are unlikely to find new jobs right away.
Sicilian said that, while it’s important to understand these elements of the unemployment rate, people must also note the number of jobs that have indeed been created in the state.
In addition to manufacturing, Sicilian said one of the fastest growing sectors is professional and business services.
Michael Rogers, the vice president of communications at the Small Business Association of Michigan, said one of the main complaints from small business organizations at a fall leadership summit in Northern Michigan was how hard it is to attract young, qualified workers.
The number of jobs in the professional and business sector, and many others like construction, is outpacing the workforce. Rogers said that’s a good sign for job seekers in the state, but not necessarily for employers.
“It’s a negative thing for small businesses — we don’t want to see high unemployment, but we also want access to good employees. We’re hearing from small businesses now, in many cases, that many of the qualified workers have already got jobs,” Rogers said.
Small businesses are now turning toward immigrants as a source for new workers, Rogers said, but filling these positions will not be easy.
“It’s tough because immigration policy is controlled on the federal level,” Rogers said. “There’s not much we can successfully do to get immigrants.”